ESSEN, Germany, Dec 7 (Reuters) – German gas market leader E.ON Ruhrgas on Tuesday said sales to customers would grow faster than the overall market in 2010 but stressed it needed better price concessions from origin countries to ensure future profitability.

In November, its parent company, the E.ON group (EONGn.DE: Quote, Profile, Research, Stock Buzz), said Ruhrgas would make a loss in the fourth quarter, when gas accounting years start under long-term contracts with producers such as Russia and Norway, which are under constant review.

Ruhrgas is tied into these contracts with the likes of Gazprom (GAZP.MM: Quote, Profile, Research, Stock Buzz) and Statoil (STL.OL: Quote, Profile, Research, Stock Buzz), which are linked to rising crude oil prices, while a global gas market glut and cheaper spot gas markets in Europe have squeezed its margins.

“Gas sales in 2010 are expected to outstrip those in 2009,” said Chief Executive Klaus Schaefer at a press briefing held at its Essen headquarters, citing market share gains in Sweden, Austria and Switzerland.

He pointed to a 13 percent year-on-year gain to 483 billion kilowatt hours achieved by Ruhrgas in the first three quarters.

Germany’s overall gas market stands to see sales grow 4 percent this year compared with 2009, he added, quoting data provided by energy industry research and based on economic recovery.

Last winter, Gazprom offered spot pricing elements to some big European clients that were hit by the disparity of spot and oil-indexed prices. But in August, it dismissed reports that it was renegotiating lower prices with Ruhrgas. [ID:nLDE67J0BM]

FRANKFURT (Reuters) – Germany is running far behind in a program to install power lines to help transmit renewable energy as red tape and protests drag progress to a snail’s pace.

Energy think-tank Dena last week tabled figures suggesting that the planned renewables boom can only happen if 3,600 km of new high voltage lines, or an addition of 10 percent to the existing lines, are built by 2020.

Only 90 km were laid in the past five years.

“The implementation is a disaster,” said Claudia Kemfert, head of energy, transport and environment at the DIW institute.

“The approval procedures have to be improved as much as acceptance by the public, but financing is also important,” she said.

New cables and pylons are necessary because Germany plans for a low-carbon future which mandates that at least 35 percent of power must come from renewable sources by 2020, double the current level.

To achieve this, new wind and solar installations are being installed but their power must be transported from far-flung corners to big cities and industry.

BONN, Germany, Nov 30 (Reuters) – Germany’s energy regulator Matthias Kurth on Tuesday said 37 out of 139 power grid expansion projects were currently behind schedule due to public opposition and long planning procedures.

Many of the 24 high priority projects identified last summer in a special law (Enlag) to speed them up faced significant delays, in some cases by several years, said Kurth, who is president of the Federal Network Agency.

“Reported investment data show that plans for new transmission grids and expansion of existing ones are lagging a long way behind initial planning,” Kurth said at the presentation of a monitoring report.

“The real problems do not lie in the lack of readiness by companies to invest.” he said.

“Instead, while most citzizens support a sustainable energy future, as soon as a new pylon is about to go up, local acceptance is lacking,” he said.

Kurth said his agency, called the Bundesnetzagentur, would support acceptance initiatives but it was ultimately a job for politicians and the industry.

He also said allowing investors higher returns to stimulate their interest — which would in theory fall under the brief of his agency — was no option as this would result in higher prices and would burden consumers.

FRANKFURT (Reuters) – Europe may not be able to sustain all its proposed gas supply pipelines but will need to build at least some soon to ensure security of supply in the latter half of this decade.

Scarred by the Russia-Ukraine gas row of 2009, which cut about a fifth of Europe’s supply in mid winter, major European gas consumers plan many pipelines to promising producing regions in central Asia, North Africa and the Middle East.

With China competing to woo producers, Europe will likely struggle to secure enough gas to fill all the new connections and would be unable to use it all if they do get filled.

“If every project that is discussed is built then there will be way too much supply, so I think the best projects will be developed and marginal ones delayed, or not built,” said Graham Freedman, a senior analyst at UK consultancy Wood Mackenzie.

“But I don’t think anybody doubts the fact that Europe is going to need more gas because domestic production is falling. It is going to be an importer for many years to come,” he said.

Wood Mackenzie forecasts that gas demand in the European Union, Turkey and former Yugoslav states could rise from 551 bcm in 2010 to 653 billion cubic metres in 2020.

Under what it says is a bullish demand scenario, this would leave a supply shortfall of 125 bcm by the end of the decade unless far more is produced at home or brought in from overseas.

BERLIN, Nov 9 (Reuters) – European gas suppliers and retail distributors are bogged down by sustained oversupply in the market while government policy favours renewable power sources, both of which they say make investment in infrastructure risky.

Panellists at the 350-strong European Autumn Gas Conference (EAGC) said suppliers in the region, the world’s largest importer, need to see a recovery in demand to take heart.

Stefan Judisch, chief executive of conference host RWE Supply & Trading (RWEG.DE: Quote, Profile, Research, Stock Buzz), spoke of “extraordinary challenges” including weak consumption in the wake of the financial crisis and new gas resources are coming on stream in the United States. These are triggering falls in European spot gas prices and a widening of oil-gas price spreads.

The International Energy Agency said on Tuesday global gas supply is likely to exceed demand for another 10 years. [ID:nLDE6A815R]

Meanwhile, European governments are subsidising increases in the supply of renewable energy to rival gas as a power source.

Germany is committed to supporting wind and solar power installations for the next 20 to 25 years to the tune of at least 160 billion euros ($222.6 billion), Judisch said.

“We (as a gas industry) are on a slippery slope of anti-market regulation,” he said. “We are the derivative of the renewable market.”

BERLIN (Reuters) – The search for unconventional gas in Europe will not quickly generate new supplies to help the region cut its dependency on imports, an energy security expert at the International Energy Agency (IEA) said on Monday.

“Europe’s shale gas potential has to be better known and there is the issue of the projects’ acceptability,” said Didier Houssin, director of energy markets and security at the Paris-based IEA in conversation with Reuters at a conference.

“We are just at the exploration stage, so significant shale gas production would take time to be put on stream,” he said.

Germany’s North-Rhine Westphalia state government last week said it had awarded exploration licenses to ExxonMobil and nine other firms including from Australia and Canada to search for the so-called unconventional gas.

Exploration technology for shale gas has improved dramatically in recent years, causing a gas glut in North America with knock-on effects for the global market.

As the hunt for new resources becomes cheaper and more promising, European countries such as Poland, Germany and, outside the EU, Ukraine, are embarking on shale gas searches.

Houssin said this made sense — while the U.S. imported less liquefied natural gas (LNG), leaving more for others, Europe was overcoming the recession, and Asia, notably China, had an insatiable hunger for energy.

FRANKFURT/DUESSELDORF (Reuters) – Germany must press on with the pace of power transmission grid expansion or risk falling behind its newly decided strategy for a renewable energy future, the country’s energy regulator said on Monday.

“The current speed is too slow,” said the president of the Bundesnetzagentur (BnetzA), Matthias Kurth, in a telephone interview with Reuters.

“Planning and approval processes must be hurried,” he said.

German Chancellor Angela Merkel’s cabinet a week ago launched a broad energy plan for approval in parliament, which is meant to help meet ambitious goals for clean energy by 2050 while ensuring secure and competitively priced supply.

Some 80 percent of power must come from renewable energy sources by 2050.

A central element of green energy investments will be new high-voltage transmission networks, which can transport power from planned offshore wind parks in the North and Baltic Seas to southern consumption centers.

New grids, which can take 10 years from conception to reality, have so far materialized at a snail’s pace.

LONDON/FRANKURT (Reuters) – German wholesale power prices may fall due to rising renewable and extended nuclear capacity, but volatility increases and the legal environment is likely to prevent the drop to reach end users.

Helped by generous subsidies, renewable energy capacity has skryrocketed in Germany in past years.

Wind power capacity went to over 25 gigawatt (GW) today from 6 GW in 2000, while solar jumped tenfold between 2007 and 2009 to 10 GW and is forecast to hit 16 GW by the end of this year.

This renewable capacity increase adds up to around 30 average-sized coal-fired power plants.

On top of that are more than 20 GW of nuclear capacity that will remain on the grid after the government decided to extend the life-cycles of the country’s 17 nuclear reactors by an average 12 years.

The immediate impact of this decision for wholesale power prices was bearish.

Since the announcement of the plan to lengthen reactors’ lives, wholesale power prices for round-the-clock power delivered in 2011 have dropped some 2.5 percent and are struggling to find support.

FRANKFURT/MUNICH (Reuters) – German Chancellor Angela Merkel said she was confident a law extending the lives of nuclear power reactors could be passed without backing from the upper house of parliament, setting up a clash with opposition parties.

Merkel’s centre-right ruling coalition ended months of division on Sunday by agreeing the country’s 17 nuclear power plants should operate longer than planned, giving each reactor an average extension of about 12 years.

The deal, welcomed by utilities, came ahead of an energy plan due from the government this month, and addressed concerns in the coalition and industry over the fate of the plants, the last of which was due to shut by 2021.

“I am in good spirits that it would stand up against potential lawsuits,” Merkel told a news conference on Monday. “We believe we can get this into law without (upper house) approval.”

Not all laws need to be passed by the Bundesrat upper house, which represents the 16 federal states, and legal opinion is divided on whether the extension requires its approval.

Those who say a law on the extension does not need Bundesrat approval say it was not consulted when the phase out was first approved.

Shares in utilities E.ON closed up 1.8 percent at 23.34 euros, RWE ended up 1.8 percent at 54.21 and EnBW rose 4.9 percent to 37.70. Unlisted Swedish firm Vattenfall was the fourth large utility affected by the decision.

FRANKFURT/MUNICH (Reuters) – German Chancellor Angela Merkel said on Monday she was confident that a law to extend the lives of nuclear power reactors could be passed without backing from the upper house of parliament, setting up a clash with opposition parties.

Her center-right ruling coalition ended months of division late on Sunday by agreeing that the country’s 17 nuclear power plants should operate longer than planned, giving each reactor an average extension of about 12 years.

The deal comes ahead of a comprehensive energy plan due from the government this month and addresses concerns in the coalition and industry over the fate of the plants, the last of which was due to shut by 2021.

“I’m in good spirits that it would stand up against potential lawsuits,” Merkel told a news conference in Berlin. “We believe we can get this into law without (Bundesrat upper house) approval.”

Shares in utilities E.ON, RWE and EnBW rose on Monday. Sweden’s unlisted Vattenfall is the fourth big utility affected.

The opposition Social Democrats and the Greens parties immediately said they planned a legal challenge to Merkel’s attempts to sidestep the upper house which Merkel’s coalition controlled until a regional election defeat in May.

The German public strongly opposes building new nuclear power plants and there is a major protest planned for September 18 against the plan to extend their operating lifespan.