German Official Pours Cold Water on Greek Solar Dream

A senior German official dampened Greek hopes of selling massive quantities of solar power to Germany, saying Berlin would bolster its own renewable energy production before considering any imports.

Sun-baked Greece last year unveiled a plan to become Europe's solar energy powerhouse, attracting up to 20 billion euros of investment in the decades to come to boost its recession-hit economy and help cut its huge debt.

"Project Helios", named after the Greek god of the sun, involves handing over public land to investors to multiply Greek solar power production by about 50 times, from 206 megawatts (MW) in 2010 to 2.2 gigawatts (GW) by 2020 and up to 10 GW by 2050.

Greece hopes to sell most of this to central European countries, particularly Germany which plans to replace its nuclear power capacity with renewable energy sources.

But Germany wants to first develop its own solar capacity before considering any imports, deputy energy minister Juergen Becker told a conference in Athens.

"We can't consider imports of electricity from renewables as anything more than a useful supplement to the expansion of our own renewable potential," Becker said.

Importing solar power may become an option for Germany in the longer run, but Berlin did not want Helios to replace Germany's expansion, he told a panel discussion involving Greek Energy Minister George Papaconstantinou and EU Energy Commissioner Guenther Oettinger.

Before selling any electricity to Germany, Greece would also need to drastically cut the guaranteed prices it pays solar power producers down to the German level, which is currently half that of Greece, Becker said.

Selling to Germany at Greek prices "would set (energy) costs for (German) consumers soaring ... any financial support from Germany (for Greece) would have to come from other sources," said Becker.

Germany has recently cut its own guaranteed prices to solar power producers to stem a flow of solar power projects that were encouraged by a previous, more generous set of subsidies.

Greece regards clean energy as one of the few positives in its uncompetitive economy, which is going through its longest and deepest postwar recession as a result of a debt crisis.

The cash-strapped country needs foreign investors to finance Helios, which includes leasing state land, free of any administrative or legal burdens, to investors to install solar panels.

Solar power accounts for just a negligible part of Greece's electricity production. Renewables, mostly wind, currently cover about 8 percent of total power demand in Greece. (Reporting by Harry Papachristou; Editing by Helen Massy-Beresford)

SOURCE: http://www.reuters.com/article/2012/04/03/greece-germany-solar-idUSL6E8F31T820120403