Berlin For weeks, companies have been struggling with the persistently high electricity and gas prices. When looking for solutions, they rely on rapid political support. The “dramatic rise” in prices will become an “existential burden” for many companies, said Christian Seyfert, managing director of the Association of Industrial Energy and Power Industries (VIK), the Handelsblatt.
In some companies, production is already being cut back because it is no longer profitable due to the high costs. This applies in particular to the basic industry and therefore has an impact on various value chains.
“The executive federal government must take short-term measures as quickly as possible,” he demanded. In doing so, she could orientate herself on the help and relief in the energy sector decided in 2020 in the course of the corona pandemic. At that time, for example, there were reductions in network charges for industry.
In addition to the short-term measures, Seyfert is convinced that medium-term solutions must be found, which the future federal government should take care of. For the VIK, a reform of the electricity market design is the focus.
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In Germany, a high proportion of the electricity price consists of legally defined charges and levies. These include, for example, the fees for the use of the networks and the levy under the Renewable Energy Sources Act (EEG). The electricity prices in this country are among the highest in Europe due to the high levies and taxes. This applies equally to private households and commercial electricity consumers.
Topic in the coalition negotiations
Among other things, the VIK calls for the EEG surcharge to be abolished and for the electricity tax to be reduced from the current 2.05 cents per kilowatt hour to the European minimum level of 0.05 cents. Compensation for the additional electricity costs caused by emissions trading must also be guaranteed over the long term.
The issue is also on the agenda of the coalition negotiations that began on Wednesday. Abolishing the EEG surcharge is considered to be capable of consensus among the potential coalition partners; However, it is currently not foreseeable whether further relief will be decided.
In addition, the VIK calls for producers of electricity from renewable sources to share more of the costs. In times of high electricity prices on the exchange, direct marketers of electricity from renewable sources generated revenues that exceeded the long-term marginal costs of their systems and the guaranteed feed-in tariff, criticized the association.
The companies united in the VIK are particularly affected by the current situation. They are energy-intensive and use large amounts of natural gas and electricity. The approximately 300 member companies of the VIK represent around 80 percent of industrial energy consumption in Germany.
In the long term, the electricity market design must be further developed in such a way that, with a high proportion of renewables, the exchange price “does not depend as dramatically as it is now” on the high fuel prices, the VIK demands.
Germany warns of market intervention
The EU energy ministers only dealt with this topic on Tuesday. However, they did not agree on a common strategy.
Spain had called for the price of electricity and gas to be capped: consumers should only pay the average price of what electricity production with different energy sources costs. The high gas price level is driving up electricity prices because gas is used to generate electricity.
Germany and eight other countries issued a letter warning against intervening in the market. It says that competition is good for innovation and security of supply. He also delivers the best prices for consumers. “We shouldn’t stir up excessive expectations of short-term options for action at EU level,” said German State Secretary Andreas Feicht. “We cannot influence the world market prices for gas, oil and coal.”
If the EU artificially lowers the price of electricity, it would no longer be worthwhile for the operators of gas-fired power plants to start their systems, said the Luxembourg energy minister Claude Turmes. The ships that are supposed to bring liquefied natural gas to Europe would then rather turn off and unload their cargo in Asia.
Jörg Selbach-Röntgen, managing director of the gas wholesaler MET Germany, recommends collecting solutions for gas consumers in distress from the industry. Those who have not secured themselves in time are in front of a pile of broken glass in view of the volatility and the persistently high gas price level, said Selbach-Röntgen to the Handelsblatt.
And if the supplier of an industrial customer fails, “the industrial customer has a massive problem”. He would have to buy much more expensive. “In this case, the state could put up a protective shield by assuming part of the price change risk,” recommends the head of MET Germany.
Survey shows stress
How much the strained price situation is affecting the economic situation of energy-intensive companies is shown by a survey by the industrial association for hot-dip galvanizing available to the Handelsblatt. 85 percent of the surveyed managing directors of galvanizing plants stated that the increased energy and raw material prices represented a very high or high burden for their company.
“The current barely calculable price developments create high planning risks for companies in the hot-dip galvanizing industry. We call on politicians to take all steps to defuse the situation, ”said Martin Kopf, chairman of the hot-dip galvanizing industry association. This includes, in particular, a more industry-friendly energy policy.
The rising gas prices are putting the galvanizing plants under pressure. In addition, there are further cost burdens, for example due to the CO2 price, which is increased at the turn of the year.
(Photo: picture-alliance / ZB)
According to the survey, gas prices in particular represent a financial burden for more than 80 percent of galvanizing plants. The rising CO2 prices under the Fuel Emissions Trading Act (BEHG) cause additional costs. “As of January 1, 2022, the price of CO2 will rise further to 35 euros per ton. This will increase the cost pressure even more. We demand a revision of the SESTA from the new federal government and relief for the hot-dip galvanizing industry, ”said Kopf. “We need leeway for the transformation, we don’t have that at these prices.”
The industry does not benefit from the carbon leakage regulation, which relieves certain industries from part of the burden of the carbon price. The association criticizes rising costs not only creating insurmountable hurdles for climate protection investments in galvanizing plants. They also made the entire energy turnaround more expensive, since hot-dip galvanized steel is used to expand power lines, in wind turbine construction or as a substructure for solar modules.
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