Chancellor Angela Merkel warned this week that spiralling costs in Germany for developing renewable energy sources could damage the country’s economic competitiveness and need to be scaled back.

The German leader has come in for criticism for not elaborating on how her government intends to tackle the situation, which is becoming a hot topic, with a forthcoming election looming and households feeling the pressure from increasingly expensive energy bills.
Angela Merkel
Speaking at an energy conference in Berlin, Ms. Merkel said she still supports further expansion of renewable energy such as wind and solar power to reduce carbon dioxide emissions. But she said the costs need to be contained as global rivals are benefiting from lower energy prices.

Utility executives welcomed her recognition, but criticized her for remaining vague on specifics. The Wall Street Journal quotes Rolf Martin Schmitz, executive board member and deputy chief executive at RWE (FWB: RWE) as Ms. Merkel’s plans remain “pretty hazy”.

Many European companies are also concerned that high electricity costs at home are becoming increasingly unsustainable, particularly as their US rivals benefit from lower energy prices resulting from the shale gas boom.

On Monday, Germany biggest energy industry group said that the next government must make overhauling energy policy a top priority.

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