BERLIN (Reuters) - Germany's shift to renewable energies has to be reconciled with the need to integrate them with existing power plants, the chief executive of the country's biggest electricity producer, RWE (>> RWE AG), said on Tuesday.

"Utilities expect a functioning and fair market system," Peter Terium said at a high-level energy conference, in the presence of Economy Minister Sigmar Gabriel.

"More decentralised energy has to mean more than just the isolated, parallel operations of many power producers," Terium said. "We have to integrate the elements of the energy transition in a sensible way."

Renewable power has reached around a quarter of total production, thanks to generous support tariffs, which are paid independent of the traded wholesale market.

This has squeezed the generation margins of companies such as RWE and E.ON (>> E.ON SE), which operate increasingly loss-making fossil-fuels burning power stations.

(Reporting by Christoph Steitz and Vera Eckert)

Stocks treated in this article : RWE AG, E.ON SE