Energy-intensive industries call for a radical cut

Thyssen Krupp Steel Works in Duisburg

Energy-intensive companies in particular are being put under pressure by the high electricity prices.

(Photo: dpa)

Berlin The energy-intensive industry fights for lower electricity prices. “In order to reconcile climate neutrality and international competitiveness, we propose the introduction of a green industrial electricity price as a transformation turbo for the energy-intensive basic industry,” Christian Hartel, CEO of Wacker Chemie AG, told the Handelsblatt.

People trust “the statements of the federal government in the coalition agreement that the economy gets competitive electricity prices,” said Volker Backs, managing director of the aluminum manufacturer Speira, the Handelsblatt.

The high electricity prices in Germany have been a serious competitive disadvantage for many industrial sectors for years. In a European comparison, German industrial companies pay very high electricity prices. This also applies to companies that enjoy certain discounts. These include, in particular, the special equalization regulation (BesAR) of the Renewable Energy Sources Act (EEG), peak compensation for electricity tax, reductions in network charges and the levy under the Combined Heat and Power Act (KWKG).

In practice, the thicket of exemptions and benefits poses major problems. Most perks have to be re-applied for year after year and fought hard for. Many regulations have also been under critical observation by the EU Commission for years, which suspects illegal state aid.

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Thresholds are changing under pressure from the Brussels authorities – entire sectors are then again exempted from certain concessions. For example, the question of whether the BesAR is granted or not can be decisive for the continued existence of a company.

Electricity price essential for many industries

Electricity is becoming increasingly important on the way to climate neutrality, and in many cases it can directly replace fossil fuels. In addition, large amounts of electricity are required to produce green hydrogen, which can always replace gas or oil where direct electricity use is not an option. The development of the electricity price is therefore essential for the future of entire sectors.

After all, there are signs of fundamental relief: the EEG surcharge will be completely eliminated on January 1, 2023, according to the coalition agreement. In the future, nobody will have to deal with the BesAR anymore. Many companies welcome this very much.

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But: Other allocations and the associated relief regulations remain in place. In the climate protection emergency program by Federal Minister of Economics Robert Habeck (Greens), it says that the surcharges linked to the BesAR would be converted into a separate law. The KWKG levy and the offshore grid levy are affected. Companies will therefore have to fight for exemption from these surcharges every year, as well as for relief in network charges and for peak compensation in the electricity tax.

The energy intensives demand a radical cut. An industrial electricity price should ensure permanently competitive electricity costs. This creates “the necessary planning security and competitiveness for the upcoming transformation investments in climate-neutral industrial processes,” said Wacker boss Hartel.

The head of the company relies on contracts for difference. The state commits itself to the companies to guarantee a certain electricity price, which is based on an index and on the industrial electricity prices in other countries. The state pays the difference to the actual costs. Companies would have the certainty of not having to bear higher electricity costs than their competitors inside and outside the EU.

Scholz: “My goal is an industrial electricity price of four cents”

In politics, industry has advocates. Just a few days ago, the Bavarian Prime Minister Markus Söder (SPD) spoke out in favor of an industrial electricity price in an interview with the Handelsblatt. “This is the simplest solution that will reliably help the industry and ensure lasting stability,” said Söder.

Chancellor Olaf Scholz (SPD) is also one of the advocates of this solution. “My goal is an industrial electricity price of four cents,” Scholz said in June last year. Four cents per kilowatt hour would be a liberating blow for most industrial companies. Currently, most companies pay multiples.

A model for a way of introducing an industrial electricity price that is practicable from the point of view of the companies concerned has been created under the umbrella of the Green Business Dialogue. The concept, presented in September last year, is intended to enable “needs-based power supply from green sources at internationally competitive prices” for the “electricity-intensive primary industry”. Here, too, contracts for difference are the linchpin.

The paper was drawn up by a specialist forum for economic dialogue, in which experts from several companies were involved. The Green Business Dialogue sees itself as a platform intended to ensure mutual understanding between companies and political decision-makers from the Greens. Green politician Thomas Gambke is the chairman.

The chances that the paper will also be of interest to Minister Habeck are not bad, the companies hope. The authors of the paper advertise in particular with the argument that the regulation they devised is compliant with EU state aid law. So far, the EU Commission has rejected an industrial electricity price.

More: The first companies are capitulating in the face of high gas and electricity prices.

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