VIENNA, Jan 30 (Reuters) - Germany's switch to renewable energy is bound to fail with consumer prices at a 15-year high while wholesale prices are languishing, the chief executive of Austrian energy group Verbund said.
Germany's market, due to its retreat from nuclear power after Japan's 2011 Fukushima disaster, was 'about to collapse', Wolfgang Anzengruber said, citing a lack of necessary investment that is compounding a broken pricing model.
'A very quick correction is needed,' he said at an industry event late on Tuesday, the Austria Press Agency reported.
Germany's strong support for renewable energy had broken its electricity market, analysts at investment bank Macquarie said last week.
They said there was a lack of incentives to build back-up power plants while cheap coal prices were discouraging the use of cleaner gas plants.
The issue is a hot topic ahead of elections in Germany this year as consumers grapple with soaring electricity prices.
Environment Minister Peter Altmaier said on Monday he planned to cut electricity prices for consumers just ahead of September's national elections by sharing the cost of the switch to renewables more evenly with companies.
Anzengruber said Austria could not escape the effects of energy policy in neighbouring Germany.
Shares in Verbund, which specialises in hydroelectric power, were downgraded by UBS on Tuesday to 'sell' from 'neutral' because of the collapse in wholesale electricity prices.
Verbund shares have fallen 14 percent this year despite a sharp rise in Austria's benchmark ATX index which has been buoyed by rising confidence in European financial markets.
(Reporting by Georgina Prodhan; editing by Jason Neely) Keywords: VERBUND GERMANY/
(firstname.lastname@example.org)(+431 5311 2256)(Reuters Messaging: email@example.com)
Copyright Thomson Reuters 2013. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.