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Germany throws weight behind energy transition to defend its turf

FILE PHOTO: U.S. Secretary of State Blinken meets with German Economy Minister Habeck in Washington

By Vera Eckert

FRANKFURT (Reuters) -Germany has identified three core measures including financial support to boost energy transition technologies while scaling up green power production and its transmission to defend its home turf, Economy Minister Robert Habeck said on Tuesday,

"We must strengthen production capacities for renewable energies in Germany and Europe," he said at a press conference.

"This is important for the success of the energy transition and to secure jobs and value creation."

Habeck said the three core measures were financial support for investments, hedging tools and subsidising innovation. The country would also tweak tax provisions to enable the speedy rollout of wind and solar power at the national level and in possible cooperation with European projects, he said.

He said the latest plans go hand in hand with the European Commission's Feb. 1 proposal for allowing increased levels of state aid.

Beyond defence, they were also confronting global competition and allowing competition with other economies such as the United States, which has proposed tax credit incentives for renewable resources, for manufacturing.

State bank KfW would be involved, but Habeck stressed the state's role was that of a temporary enabler to win investors' confidence, not of a long-term shareholder.

Berlin's goal is to generate at least 80% of electricity from the wind and sun by 2030, a target that is more pressing after the drop in Russian fossil fuel exports to Germany last year. The share was 49.6% in 2022.

To get there, 57 gigawatts (GW) of new onshore wind turbines, 22 GW offshore turbines and 150 GW of photovoltaic capacity must be built, a paper outlining key measures said.

Joerg Ebel, president of Germany's solar industry group BSW, said that while Germany had become a big buyer of solar technologies, it had fallen behind in production facilities.

"It is highly urgent for us to recover lost territory in solar components very quickly," he said, adding that strengthening Germany's position did not mean excluding imports or participation by others.

Hermann Albers, president of industry group WindEnergie, said the new beginning must make up for a decade lost to what he called the "misdirected course" of previous governments.

(Reporting by Vera Eckert, editing by Rachel More, Emelia Sithole-Matarise and Bernadette Baum)