Berlin, August 10:

Rocketing oil prices and the push towards reductions in carbon dioxide emissions have triggered a wave of investment in renewable energy in Germany, helping to underpin a boom in alternative power in Europe’s biggest economy.

Until recently, the alternative energy business was largely dominated by small and medium sized companies. But with energy emerging as a key issue in the German elections slated for next month, a round of major investments in recent months has signalled a move by big power groups to broaden their energy mix by shifting to renewable power supplies.

With vast wind parks now spreading out from the land into the sea, Germany’s third biggest electricity group Swedish-owned Vattenfall Europe has announced plans to launch a 200-million euro ($247 million) study into the building of an offshore wind park in either the North or Baltic Sea.

“We believe that offshore parks can make a contribution that will transform wind energy from a subsidy receiver into a market-mature technology,” said Vattenfall Europe chief Klaus Rauscher.

Underscoring the boom that has been under way in renewable energy in Germany, alternative power sources now represent about 10 per cent of electricity generated in the country.

Germany is also starting to export its new wind technology with windpower engineering group RE Power Systems announcing earlier this year that it had won its first project order

in China.While giant German insurer Allianz said it was raising its stockholdings in renewable energy groups from 300 million euros to 500 million euros, US conglomerate General Electric chief Jeff Immelt set out plans in Munich for GE to double its revenue from sun and wind energy to 15 billion euros over the next five years.

Chancellor Gerhard Schroeder’s ruling Social Democrat-Green Party coalition has already begun phasing out nuclear power in the country and launching a push to build up renewable energy sources in Germany.

However, as a sign of the confidence in the renewable energy sector, investors do not appear to be particularly unsettled by the threat posed by a change of government in Berlin. But with the energy sector expecting ambitious carbon dioxide emission reduction targets in the future and a steep rise in the price for carbon dioxide trading certificates, Vattenfall also announced plans to build a 40-million euro coal-fired power station that does not give off any carbon dioxide. Underpinned by support from Germany’s ruling SPD-Greens coalition, wind energy has already overtaken hydroelectric power as the nation’s main source of renewable energy.

A government report has predicted that by 2025 the windparks rapidly appearing along Germany’s coastline will generate the same amount of energy as 20 nuclear reactors.

Schroeder’s coalition has also introduced a law compelling energy companies to buy power generated by renewable sources at a generous price. This has led to an explosion of wind turbines across the wind-swept countryside and a boom in the sales of wind generators.

Similarly, government support for renewable energy has helped to foster a boom in solar power with the country’s sun power industry having ambitions to become the world leader. Last year the world’s largest solar plant opened near Leipzig in eastern Germany. Last month global oil company Shell announced it was to build the world’s largest single-connected solar power station at a former military base in Bavaria in southern Germany.

After it is completed in March 2006, Shell’s 40-million euro solar plant would cover the electricity needs of about 3,300 households each year.