German economy ministry to unveil plan to support industry with lower electricity prices

Germany’s economy ministry is planning to present a plan for an industrial electricity price in the coming week, Tagesspiegel Background reports. Speaking in Berlin on Wednesday at an event organised by the IG Metall metalworkers' union, economy ministry state secretary Patrick Graichen said that, while non-energy-intensive sectors could live with current wholesale electricity prices of up to 15 cents per kilowatt-hour, energy-intensive industry could not and needed prices in the range of 5 to 6 cents per kilowatt-hour. "If we want to master the transformation [toward renewable energies] and if Germany is to continue to develop as a business location … we would be well advised to give companies a fair chance to carry out this development,” economy minister Robert Habeck told reporters during a press conference, Politico reported. “For me, this also includes an industrial electricity price.”

In reaction to the energy crisis and in an effort to prevent companies from relocating abroad and the loss of jobs, the state of Lower Saxony has proposed lowering the electricity price for energy-intensive companies nationwide to 7 cents per kilowatt-hour – a move that could cost up to 12 billion euros a year and necessitate the approval of the federal government and the EU. The Lower Saxony government, which is calling for the lower electricity price to be introduced on 1 January, 2024, said affected sectors that would benefit from lower electricity prices include the basic chemical industry, metal production and processing, paper, glass and ceramics. Lower electricity prices could also benefit newly established production facilities for batteries and battery cells, solar cells, wind turbines and related components for hydrogen production. Such energy subsidies would have to be dependent on a clear transformation strategy for the company and limited to a maximum of 10 years.

The Lower Saxony plan follows demands from the energy ministers of Germany’s 16 states that the federal government support energy-intensive industries with lower electricity prices and consider reducing the electricity tax to the European minimum.