2023-11-09 18:34:52
After months of conflict, the partners of the ruling coalition in Berlin have agreed to regulate the price of electricity for industrial customers.
Three measures have been decided to lower the price of electricity for manufacturers in Germany. First of all, a significant reduction in the tax on electricity, from 1.537 cents per kWh today to 0.05 cents in 2024 and 2025, the minimum authorized by the European authorities. Its cost is estimated at 6 billion euros per year.
Some 3,500 large consumers such as steel, chlorine or paper producers will also benefit from additional advantages, thanks to a reform of the so-called “electricity price compensation” system, which partly covers the amount CO2 emissions certificates. This advantage will be extended, for an amount estimated at 3 billion euros to the State, financed by a special fundthe KTF, one of these funds which allow Berlin to hide its budgetary overruns, regularly denounced by purists of orthodoxy.
Finally, the 90 largest consumers will continue to benefit for five additional years from a third compensation tool of the indirect cost of CO2 emissions. “With all these measures, the price of electricity should drop to less than 6 cents per kW in 2025,” estimates the Ministry of the Economy. This is a considerable reduction compared to the average price of 22.3 cents in force for the industry at the end of 2022. These measures will cost Berlin 12 billion euros.
Rules of free competition
Even before the war in Ukraine, industrialists suffered from a competitive disadvantage on the price of electricity. The industrial kWh cost 16.42 cents on average at the end of 2021 in Germany compared to 8.82 cents in France. Only Italian, Dutch or Danish manufacturers had to pay equivalent prices.
“If we control prices, we lose money. But if we don’t control prices, we lose the industries of the future.”
The invasion of Ukraine further widened the gaps. According to the statistics office Destatis, the price of a kWh, which varied in a range of 10 to 15 cents between 2008 and 2021, suddenly rose above the 20 cents mark with the invasion of Ukraine in early 2022 .
Convinced that in the long term, Germany will return to cheap energy thanks to renewables (53% of electricity production last year), the Minister of the Economy Robert Habeck has been looking for transition solutions for months . “If we control prices, we lose money. But if we don’t supervise, we lose the industries of the future“, pleads the minister. He had to overcome the reluctance of his colleague from Finance, fearing to distort the rules of free competition.
The debates are not over yet. Parallel to these internal negotiations within the coalition in power in Berlin, discussions between Member States are continuing in Brussels with a view to reforming the electricity market. These discussions have been marked so far by strong tensions between French and Germans, whose models are antagonistic.
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