German Chancellor Angela Merkel (C) reacts during the commemoration of the new 380-kV high voltage power line between Schwerin and Hamburg, in Schwerin December 18, 2012.

BERLIN | Wed Dec 19, 2012 9:24am EST

BERLIN (Reuters) - German Chancellor Angela Merkel's cabinet agreed on Wednesday to accelerate the construction of 2,800 km of new high-voltage power lines to push forward the country's shift to renewable energy.

However, in a sign of the complexities of formulating energy policy in Europe's biggest power market, two of her ministers said they had failed to agree a common position on a proposed reform of Europe's system of permits to cut carbon emissions.

Under the nationwide grid plans, the new transmission lines will be completed within four years from a previously planned 10 years and cost about 10 billion euros ($13.21 billion).

The cabinet agreed to mainly prioritize the construction of lines to transport power from wind turbines near the coast and offshore to industrial areas in southern and western Germany.

Germany's ambitious switch to renewable power sources is the result of a major policy reversal from Merkel last year. After the Fukushima disaster in Japan, she decided to speed up the closure of nuclear plants.

One obstacle in achieving her targets, including a goal for renewable energy to account for 35 of German power production by 2020 from around 23 percent now - is the limited capacity and routing of existing grids.

In addition to the new lines, the draft law envisages expanding existing high voltage grid by about 1,500 km.

"(This agreement) shows that we are absolutely on time with our plans... This is a huge step in the expansion of the grid, a huge step for the switch to renewables," said Economy Minister Philipp Roesler.

In a bid to deal with strong local resistance to grid expansion, the planned law sets limits on the legal options opponents can pursue.

Another important contribution came from Germany's 16 federal states who signaled they would let the federal grid operator Bundesnetzagentur coordinate plans, rather than insisting on individual processing, which causes delays.

However, more needs to be done: Distribution grids that take power from high voltage networks served by big power stations and transport it to consumers must also be adapted to cope with an increasing number of wind and solar power installations.

CO2 PERMIT ROW

At a news conference to discuss progress on Germany's "green revolution", Roesler and Environment Minister Peter Altmaier said they were still at odds on EU plans to reform carbon emissions permits but vowed to talk again next year to try to find common ground.

The dispute between the ministers, who share responsibility for energy policy, has been a major factor in holding up any agreement on an EU proposal to withdraw some emissions permits from the market to stop a price slump.

Altmaier said he expected the European Commission to make a new proposal after the European Parliament had dealt with the subject in February.

"As soon as this proposal is on the table, the German government will take a view on it," said Altmaier.

Roesler also signaled a willingness to talk.

"We both have the goal that we want a well-functioning emissions certificate market," he told reporters.

Altmaier backs the EU proposed reform of the Emissions Trading Scheme (ETS), a main pillar of the bloc's efforts to cut CO2 emissions, but Roesler opposes meddling in the market.

Benchmark EU carbon prices were up 1.44 percent at 7.03 euros a metric ton at about 1150 GMT. ($1 = 0.7568 euros)

(Additional reporting by Markus Wacket, Vera Eckert; Writing by Madeline Chambers; Editing by Noah Barkin and David Cowell)

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LOS ANGELES | Thu Dec 20, 2012 8:36pm EST

LOS ANGELES (Reuters) - The administration of President Barack Obama plans to more than double the size of two marine sanctuaries off the northern California coast to guard the near pristine waters from oil drilling in a move that sidesteps potential hurdles in Congress, federal officials said on Thursday.

The proposed expansion would protect nutrient-rich Pacific Ocean waters off the coast north of San Francisco that are home to humpback whales, great white sharks and abundant fish stocks key to commercial fishing and tourism, officials said.

"This area is a national treasure, it needs and it deserves permanent protection from oil and gas exploration," said Representative Lynn Woolsey, a Democrat who represents Marin and Sonoma counties north of San Francisco.

"Believe me when I tell you that no one is going to vacation on the Sonoma coast if they are going to be looking at oil derricks," she said.

The protected zone covers nearly 2,800 square nautical miles, an area slightly bigger than the state of Delaware. From north to south, it ranges from the coast of the town of Point Arena to the waters beyond San Francisco's Golden Gate Bridge.

Amid widespread public opposition in California to offshore drilling, the oil industry says it has no active plans to exploit the designated area.

Woolsey, who is retiring after 10 terms in the U.S. House of Representatives, has pushed for the marine sanctuary expansion since 2004, but says Republican opposition in Congress was preventing its passage.

"The plain fact is that the Republican House majority will not debate or pass this bill," Woolsey said.

A House bill passed in 2008 did not get past the Democratic-controlled Senate that year.

Under pressure from Democratic leaders in Washington, the Obama administration's National Oceanic and Atmospheric Administration has proposed expanding two existing federal marine sanctuaries, Cordell Bank and Gulf of the Farallones.

The process will take up to two years as the agency hears from the public, officials said. The two existing sanctuaries cover over 1,800 nautical square miles, according to NOAA.

Tupper Hull, spokesman for the Western States Petroleum Association, said none of the oil companies in his organization have shown an interest in drilling in northern California.

"It's not an area where there is any expectation that additional energy is going to be brought to market," Hull said.

Several Republican members of Congress active on energy issues could not be reached for comment on the plan.

All of California's offshore oil production comes from 32 platforms off the southern coast of the state, and those derricks date from the late 1960s and early 1970s, Hull said. Drilling in federal waters off California produces only 54,000 barrels a day, compared to 1.3 million a day in the Gulf of Mexico, according to U.S. government figures.

The proposed waters to be protected in northern California has North America's most intense "upswelling" zone, where nutrient-rich water comes to the ocean surface and feeds many kinds of marine life, according to NOAA.

(Reporting By Alex Dobuzinskis; Editing by Cynthia Johnston and Todd Eastham)

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