Merkel defends costly switch out of nuclear power

Oct 16, 2012 6:13am

BERLIN (AP) — German Chancellor Angela Merkel on Tuesday defended her government's decision to phase out nuclear power and switch to renewable energies within a decade, but acknowledged the need to overhaul and speed up the transition plan.

Business leaders have criticized the way the switchover has been managed, saying the costs are spiraling and hurting some companies.

"We have achieved a lot but we are far from being where we should stand," Merkel told a gathering of the German Employers Association.

The country's grid operators this week said a surcharge on households' electricity prices financing the expansion of renewable energies will increase by 47 percent on the year in January. A typical family of four will have to pay about €250 ($324) per year on top of their bill, but many large companies are exempt from the surcharge to safeguard their competitiveness.

The surcharge is used to guarantee producers of wind, solar or biomass power a long-term above-market rate for their electricity output, making sure their investments are profitable.