Economics Minister Habeck wants to introduce a cheaper industrial stream, Finance Minister Lindner is against it. It is often claimed that the costs in Germany are higher than anywhere else. Is that true?
Germany has a lot of industry – and that in turn has a huge energy requirement. This applies to aluminum works, manufacturers of building materials or the chemical industry. That alone consumes around ten percent of Germany’s electricity. And the industry association VCI complains that electricity prices have been significantly too high, especially since the energy crisis. “There’s no other way to put it: It’s three minutes to twelve,” says VCI Managing Director Wolfgang Große Entrup. “Our energy-intensive industry in Germany is simply no longer competitive.”
In other words: instead of in Germany, production will take place elsewhere – foreseeably at the expense of jobs, according to the warning. But where does Germany actually stand in terms of industrial electricity prices?
How have the prices developed?
According to the Federal Association of Energy and Water Management, the industrial electricity price in Germany is still higher than before the energy crisis as a result of the Russian attack on Ukraine. With taxes and surcharges, the price in 2021 was a good 21 cents per kilowatt hour; The average for 2023 so far is 26.5 cents. In the second half of 2022, the price was twice as high due to the acute energy crisis.
Where does Germany stand in a European comparison?
According to the European statistics authority Eurostat, the local industrial electricity price corresponds almost exactly to the EU average. In countries like Denmark, Italy or Belgium it is considerably higher in some cases. In Poland, Portugal or France the price is lower. France in particular plays a special role. Because there, the state-owned company EDF has to sell a considerable amount of electricity at regulated prices – from which many industrial companies benefit.
Is there even “the” Industrial electricity price?
No. Because the electricity price consists of many components. “There are the wholesale prices, which are relatively high in Germany as they are in all of Europe. But the companies also pay for the networks, they pay taxes, they pay surcharges,” explains Georg Zachmann, an energy expert at the Bruegel think tank in Brussels. “Or they’re exempt from levies and taxes. And that’s a pretty specific mix for each company.”
In general, one can say that the larger an energy-intensive company is, the more likely it is to benefit from various special regulations relating to electricity taxes, grid fees or the expensive European emissions trading system.
How does Germany fare globally?
Data from the International Energy Agency shows that Germany and Europe are comparatively expensive when it comes to industrial electricity – prices are about three times higher than in the USA or Canada and about a third higher than in Japan. But the same applies globally: Exact comparisons are difficult. However, consumers always have the power to choose energy providers regardless of where they are.
“If we look at the figures from the international energy agency or from Eurostat, then you really only get very, very rough average values,” says energy expert Zachmann. “And then they hide the fact that there can be huge differences between a large bakery and a steel mill. And we don’t have access to the relevant figures. And anyone who has access to these figures has no great interest in making them transparent. ”
This shows that there is no reliable comparative data on how much industrial companies around the world pay for their electricity. Which doesn’t exactly make the political debate about an industrial electricity price any easier.