Energy-intensive industries call for energy transition cost “super cap”

Germany’s energy-intensive industries have called for an energy transition cost “super cap” for their businesses, Daniel Wetzel reports for newspaper Die Welt. Lobby group WVMetalle (the industry federation for metal-processing companies) said the end of coal in Germany could mean result in the merit-order effect favouring power generation by natural gas plants, increasing wholesale power prices by up to 50 percent and potentially forcing companies with high electricity consumption to relocate abroad. “This affects producers of paper, concrete, glass, but also the entire chemical and metal-processing industry, and steel, with hundreds of thousands of employees,” Wetzel writes. If granted by EU competition watchdogs, a super cap for energy-intensive industries would mean financial liabilities imposed by the state cannot exceed a given share of the company’s gross value added, the lobby group says. Any limit for specific industries would mean other consumers covering more of the Energiewende’s costs. Energy-intensive industries in Germany are already eligible for rebates on non-market power costs.

Energy-policy newsletter Tagesspiegel Background says the Federation of German Industries (BDI) has made similar demands, and wants power price caps included in the country’s coal exit commission’s final report. “Since there are many different projections of how a coal exit will affect power prices, far from every commission member shares the BDI’s view,” Tagesspiegel Background says. Think tank Agora Energiewende* predicts that while a coal exit would lead to power price spikes in the short-term, resolute renewables expansion could mean even lower industry prices within a relatively short time.