Comments, assessments and developments on energy issues, supply and security in Germany:
BDEW warns that industrial electricity prices will affect pricing
The Federal Association of Energy and Water Industries (BDEW) demands that the proposals of the Federal Ministry of Economics for industrial electricity prices must not impair pricing on the energy markets. The Ministry had proposed that the subsidized amount of electricity should be limited to 80 percent for the industrial electricity price and that the market price should continue to apply for 20 percent. In addition, the companies should not pay an individual so-called bridge electricity price of a maximum of 6 cents, but are reimbursed the difference if the electricity prices on the exchange exceed 6 cents – based on the average annual electricity price on the exchange. “Now it must be checked carefully whether these approaches are sufficient to really avoid market distortions. In addition, the effects on the level of network charges must be taken into account,” said Kerstin Andreae, Chair of the BDEW Executive Board.
DIW: Industrial electricity prices are expensive and unfair
According to the German Institute for Economic Research (DIW), an industrial electricity price for energy-intensive companies is ecologically and economically wrong. “It is expensive and unfair to non-privileged companies and households, all of which have to pay high electricity prices,” said DIW energy expert Claudia Kemfert of the Funke media group. The best brake on electricity prices would be the faster expansion of renewable energies. Capping the price of industrial electricity creates false incentives and cements the use of fossil fuels. “Electricity is expensive, mainly because of the high proportion of fossil fuels,” said Kemfert. Subsidies also prevent the transformation towards more electricity savings, efficiency and the use of renewables. The industry would be helped more by reducing bureaucracy, quick special permits, better or a skilled worker program.
VDMA: Habeck’s proposal for industrial electricity price is “wrong way”
The Association of German Mechanical and Plant Engineering (VDMA) considers the industrial electricity price proposed by Federal Minister of Economics Robert Habeck (Greens) to be wrong. “There is no doubt that the electricity price for industry in this country is so high that international competitiveness suffers. However, a blanket, drastic subsidization of the electricity price for energy-intensive companies is a mistake,” said VDMA Managing Director Thilo Brodtmann. “Because a subsidy with the watering can, as planned for the coming years as a so-called bridge electricity price, burdens the federal finances and thus the economy, including mechanical and plant engineering, as well as the citizens.” The association also warns that the proposed industrial electricity price would have the wrong steering effect. “Free rider effects and misguided incentives – such as no longer investing in new energy-efficient technologies – must be prevented,” according to the VDMA.
Solar industry praises Habeck’s plans for solar expansion
The general manager of the German Solar Industry Association (BSW), Carsten Körnig, praised the strategy presented by Federal Minister Robert Habeck for accelerating the expansion of solar energy as “ambitious”. “We have high expectations, for example, of the new ‘collective building supply’ with solar power,” he said. Electricity production, for example in a community of owners, will then be possible “without becoming an electricity supplier, without having to organize a full supply for the consumers in the house at the same time and without complex bureaucracy or expensive additional metering technology”. Urgency is now required for the concrete implementation, “so that the solar turbo can develop the desired acceleration effect in this legislative period,” demanded Körnig. The expansion goals are “ambitious without question, but there is no alternative”. Now the “speed of light” is needed everywhere when expanding.
FDP parliamentary group leader rejects industrial electricity price
With sharp criticism, the FDP parliamentary group rejected the concept of Federal Minister of Economics Robert Habeck (Greens) for an industrial electricity price. “This green subsidy mania contradicts the market economy. Habeck’s populist industrial stream would be a debt-financed bureaucracy monster for people and companies,” said Christoph Meyer, deputy FDP parliamentary group leader, of the Funke media group. The FDP wanted “no industry on the state drip”. Instead, it is important to reduce electricity prices for everyone, for example by lowering the electricity tax.
Taxpayers’ Association criticizes proposal for industrial electricity price
The taxpayers’ association has criticized Federal Economics Minister Robert Habeck’s (Greens) concept for an industrial electricity price. “Politicians cannot, on the one hand, reduce the supply of electricity without a real need – key word nuclear phase-out – and on the other hand subsidize higher electricity prices and at the same time force citizens and companies into an electricity-intensive transformation with a view to heat generation, mobility and industrial production,” said Taxpayers’ Association President Reiner Holznagel Funke media group. “From a financial point of view, tax money that is not available cannot be planned twice or three times for subsidy offensives.” There is already a record for financial aid, so that you have to live “on credit” for years. Holznagel accused the government of not developing a strategy combining energy and economic policy.
DIHK is skeptical about Habeck’s concept for industrial electricity prices
The President of the German Chamber of Industry and Commerce (DIHK), Peter Adrian, reacted with skepticism to the concept for an industrial electricity price presented by Federal Minister of Economics Robert Habeck. “Many companies of different sizes and sectors are suffering from the high electricity prices. We therefore need a well-balanced overall concept for this very serious issue and not a quick fix,” Adrian told Handelsblatt.
VCI sees Habeck’s concept at an industry price as a clear “game changer”
The Association of the Chemical Industry (VCI) praises the plans of the Federal Ministry of Economics for the industrial electricity price. “Thumbs up. This is an important signal for our industry. What is important now is that the industrial electricity price comes quickly and unbureaucratically and that the birth defects of the electricity price brake are avoided during implementation. That would be a clear game changer for our international competitiveness,” said VCI CEO Wolfgang Grosse Entrup. The industrial electricity price helps the industry to secure production and industrial value creation and to master the transformation to climate neutrality even better. “The whole of Germany and Europe will benefit from this,” said Entrup. However, the industrial electricity price should not be a permanent solution, but only a bridge to the future. “We are one hundred percent committed to the market economy and are not friends of subsidies. But in this exceptional situation we see no other solution,” stressed Große Entrup.
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May 05, 2023 10:03 ET (14:03 GMT)