analysis
Should the state subsidize the price of electricity for industry? The traffic light coalition is also arguing about this. The fact is: In hardly any other country do companies pay more for electricity than in Germany.
A state-capped electricity price for industry: Opinions are divided on the idea, including in business. Representatives of energy-intensive industries such as Germany’s second-largest steel company, Salzgitter, or the Association of the Chemical Industry consider it indispensable.
The association wants a price of between four and six cents per kilowatt hour – a fraction of what industrial electricity currently costs: companies that need a lot of energy – such as the chemical industry – had to pay more than 18 cents last year, according to an evaluation by the Federal Association of Energy and Water Management shell out per kilowatt hour. Medium-sized industrial companies, for example in mechanical engineering, pay significantly more.
Worry about the location
According to evaluations, electricity in Germany is one of the most expensive in the world. In 2021, German industry was at the top of the European comparison when it came to electricity prices. In Sweden it cost
Megawatt hours not even half as much.
Clemens Fuest, President of the Munich ifo Institute, therefore says: “Basically, I think it’s good that politicians are thinking about the competitiveness of industry and electricity costs. However, we have to be careful not to pile up too many regulations that contradict, and don’t organize the whole thing in an overly planned economy.”
And again the traffic light argues
The Green Minister for Economic Affairs, Robert Habeck, wants to present exactly what a state-subsidized industrial electricity price cap could look like this week. The government is seething. Because Finance Minister Christian Lindner (FDP) is against it, Chancellor Olaf Scholz (SPD) is also slowing down. The co-chairman of the SPD, Lars Klingbeil, on the other hand, urges a rapid introduction: “The industrial electricity price must come within the next twelve months,” said Klingbeil in the br.
Habeck considers the step necessary because otherwise industrial companies could turn their backs on Germany. Abroad, for example in the USA, not only much cheaper energy prices beckon, but also additional subsidies for green industries.
The lid would help the chemical industry
Wolfgang Große Entrup, General Manager of the German Chemical Industry Association, also says: “A cap on electricity prices will help us to stop the exodus of energy-intensive sectors and to further push the transformation towards climate neutrality.”
Robert Halver from Bader Bank, on the other hand, thinks it is wrong for the state to give industry money when it comes to electricity prices. Not only because it ultimately happens at the taxpayer’s expense: “If everyone just subsidizes and we do it too, then America will say, OK, we’ll do that more. Then we’re in a subsidy competition that we can’t even win. “
Politicians want to provide a solution, but many believe it is part of the problem. Because, among other things, the move away from nuclear energy has reduced the supply of electricity in Germany. “I would have liked to see that we would have relied on nuclear power for a few more years, until we had found alternatives,” says Halver.
Enough incentives to save energy?
Ifo boss Fuest also believes that the nuclear phase-out should perhaps have been reconsidered. In any case, if you want to keep Germany attractive as an industrial location, you have to change something: “In my view, it is more important for politicians to work on the supply, increase the energy supply, instead of reducing the energy supply and then covering up the consequences of the shortage with state subsidies. “
That is contradictory and counterproductive. From his point of view, a possible price cap adds another aspect: the incentive to save energy could be lost.