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HeidelbergCement must adapt to higher electricity prices

Jun, 03 2011

HeidelbergCement AG and other big energy users in Germany's industrial heartland must adapt to higher electricity prices as the nation phases out nuclear power plants, the mayor of Heidelberg said.

"There will be a change in industry, and there must be a change," Mayor Eckart Wuerzner said in an interview at a meeting of the C40 cities group in Sao Paulo last night. "This will only cost jobs if we are not developing new economic structures."

Chancellor Angela Merkel plans to phase out atomic plants by 2022 following the accident at a nuclear plant in Japan. Germany will prevent blackouts by building natural gas-fired power stations and using more renewable energy, said Michael Geissler, chief executive officer of Berlin Energy Agency.

"We need 10 gigawatts of natural gas just in case the wind is not blowing," Geissler said at the C40 gathering. "Natural gas will be the biggest investment to make sure our capacity stays in line with demand."

Wuerzner, whose city is home to the world's third-biggest maker of cement and concrete, said it's "not acceptable" that power prices currently don't include some of the cost of burning fossil fuels, which scientists blame for damaging the climate.

"Some companies are very energy-intensive, and they're looking for the cheapest price," he said. "We're discussing how to buy as much clean energy as possible."

The mayor said 12 percent of the city's CO2 comes from industry. Households make 32 percent and vehicles 25 percent. His goal is to cut emissions 20 percent from 1987 levels by 2015. While solar energy plays a part, he's also keen on tapping geothermal energy from pools of hot water 4 kilometers underground and on insulation and efficiency programs.

Solar 'Too Expensive'

Wuerzner said he supports cuts to the feed-in tariff that guarantees above-market prices for solar energy.

"The solar industry is too expensive," he said. "If you subsidize inefficient solar cells, you won't have development of cheaper solar power. This is a tricky question when you're making a small turn to the feed-in tariff."

Geissler said gas-fired plants are cheaper than coal to build and are better paired with wind power, which fluctuates with breezes. Coal plants take longer to heat up and take off line than gas-powered generators.

The next biggest investment will be in wind power even though the country is the world's biggest market for solar cells, he said.

"When you have a wind farm erected 10 years ago like we have and then you put a new highly efficient tower in the same place, you can double capacity," he said. "There´s been fast advancements the past decade."

Source: Bloomberg

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