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Germany to Put Renewable Surcharge on Industry's On-site Power

Germany to Put Renewable Surcharge on Industry's On-site Power

BERLIN, Jan 22 (Reuters) - Germany's cabinet backed a plan to make firms that produce their own power start paying charges to support renewable energy - from which they had been exempt - as part of a drive to spread the burden of financing green policies.

Economy Minister Sigmar Gabriel is looking to reform the way Germany supports its growing green industries that derive power from sources such as wind and sunshine, as costs have spiralled out of control, especially burdening private consumers and creating niches of non-payers.

A government spokesman said the cabinet in a session on Wednesday had approved Gabriel's plans.

The draft proposal, whose text was obtained by Reuters, calls for industry to pay 90 percent of the surcharge, currently at 6.24 cents per kilowatt hour, for new conventional power plants they build on manufacturing sites and for those planning to produce power from low-carbon green energy and combined heat power plants to pay 70 percent.

Until now, producers of power for their own industrial use had been exempted from paying the surcharge - which is funnelled to green energy producers under a feed-in tariff law that guarantees them above-market earnings.

The argument had been that this would protect industry's international competitiveness. As a result, industry had been raising the percentage of its own power provision to 25 percent of total requirements.

Other details emerging from the draft were planned cuts to feed-in tariffs to support wind turbines onshore in an industry that no longer needs start-up incentives but has grown into a mature sector supplying 8 percent of all power.

Under the plans, their payments would be cut by 1.59 percent per year for new wind turbines starting up, provided total additions to German wind capacity stayed below an annual cap of 2,600 megawatts.

If more than 2,600 MW were to be built, the pay-outs would be diminished by another 0.1 percentage points per 200 MW.

The planned cuts are being loudly opposed by coastal states in Germany's north, which do not house much industry and need the green power income to supplement farmers and businesses, as well as to generate employment. (Reporting by Markus Wacket, writing by Annika Breidthardt and Vera Eckert; editing by Mark Heinrich)