Habeck announces industrial electricity price of six cents

Robert Habeck (Greens)

Initial reactions from the affected sectors to the Ministry’s proposal for a bridge electricity price were positive.

(Photo: IMAGO/photothek)

Berlin Federal Minister of Economics Robert Habeck (Greens) wants to help industrial sectors such as chemicals, steel, metal, glass and paper with a “bridging electricity price”. He should have a height of six cents per kilowatt hour. This emerges from a working paper from the ministry, which is available to the Handelsblatt. The subsidized electricity price is to apply until 2030.

The group of recipients is clearly limited, the paper says: “Only energy-intensive industrial companies that are in international competition, including new transformation industries, should benefit from the bridge electricity price”. The paper refers to the special equalization regulation (BesAR) of the Renewable Energy Sources Act (EEG). This means that there is a “model that has been tried and tested over many years and has been coordinated across Europe” that has been continuously developed by various governments in the past and best captures the affected sectors.

The BesAR reduced the EEG surcharge for industrial companies. The prerequisite was that the companies could prove a certain energy cost intensity and a high trading intensity. An electricity volume of around 150 terawatt hours (TWh) was recorded by the BesAR. This corresponds to more than a quarter of the total electricity consumption in Germany. The EEG surcharge has not been levied since July 1, 2022. That’s why the BesAR no longer exists.

The paper goes on to say that savings incentives must be retained. That is why the bridge electricity price should only apply to 80 percent of consumption.

Companies have to adhere to tariffs and give location guarantees

According to the ministry, companies that want to take advantage of the bridge electricity price should make a “transformation commitment” to achieve climate neutrality by 2045. In addition, the subsidy is to be linked to an obligation to adhere to collective agreements and a location guarantee.
The Ministry of Economic Affairs calls for the bridge electricity price to be financed from the Economic Stabilization Fund. The financial requirement up to 2030 is estimated in the paper at 25 to 30 billion euros. However, the coalition partner FDP rejects this. Just a few days ago, Federal Finance Minister Christian Lindner (FDP) emphasized in a guest article for the Handelsblatt that he would not consider financing from the Economic Stabilization Fund.

Read more: Does Germany need a subsidized industrial electricity price?

Initial reactions from the affected sectors to the Ministry’s proposal for a bridge electricity price were positive. “As the steel industry, we are in the middle of the transformation to climate neutrality. In this phase of vulnerability, companies need support, ”said Kerstin Maria Rippel, General Manager of the Steel Industry Association, to the Handelsblatt.

Even if the end result is a market-based, non-subsidized solution, a transformation electricity price is urgently needed as a bridging solution for the transitional period. “We expressly welcome a concept that provides a feasible solution under state aid law as a basis for discussion,” she said.

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