German industries call for review of energy transition policy

German industries called for a review of a subsidy policy for the nation's ongoing energy transition on Thursday, three days ahead of a federal parliament election. Federation of German Industry (BDI), an umbrella group for 38 industry associations representing 100,000 businesses in Germany, urged German new government to abolish the current feed-in tariff which allows developers to sell electricity produced by solar, wind and other renewable energy in a fixed above-market price on priority basis. The privilege of renewable energy plant owners is guaranteed by EEG renewable law. The cost, however, is covered by consumers, who have to pay a surcharge in their bills. BDI claimed that the subsidy policy was not helpful for the health of power market which should be dominated by supply and demand. "We expect the next federal government to develop with all stakeholders a reliable road map for the urgently-needed reforms within the first 100 days," said BDI Director Markus Kerber in an interview with Handelsblatt newspaper. Germany has set an energy transition target that by 2050, 80 percent of electricity will be developed by renewable energy. With the surcharge for renewable energy, however, German consumers' electricity bills are among the highest in Europe. Also on Thursday, German HDE retailer association warned that rising energy prices had threatened retail sectors, as consumers held less disposable money in hand. "The next government needs a fresh start in the energy revolution. There should not be a long-term continuation of the fixed feed-in tariff. We need a market economy in the field of renewable energy," said HDE Chief Executive Stefan Genth in a statement, adding that the adjustment of renewable energy policy was necessary for retail sector to remain as an anchor of stability for German economy. Against the backdrop of a recession-trapped eurozone and a weak global growth, consumer spending is the main driving power of the Europe's largest economy. Private consumption is expected to grow by 1 percent in 2013 and help German economy to regain strength in 2014. German Chancellor Angela Merkel has faced various pressures for the policy of energy transition and has vowed a reform if she is re-elected. On Sunday, German voters will elect a new Bundestag, lower house of German parliament. The conservative union of Merkel's CDU and its Bavarian sister party CSU led in a poll on Thursday with a support rate of 38 percent, 10 percentage points higher than its main rival Social Democrats.