German industry power price within European average, France significantly lower – report

The electricity price for industry in Germany is within the European average, but the price in key competitive neighbouring markets such as France are “significantly lower,” according to a report by consultancy Prognos, commissioned by the Bavarian Industry Association (vbw). The analysts expect German industry power prices to fall considerably by 2030 from today’s high levels, which were also caused by the energy crisis. Gas prices for industrial consumers in Germany today are significantly higher than in Asia or America, but are still middling for Europe. The report says that while there is set to be a convergence of European and Asian gas prices by 2030, it will remain significantly cheaper in the Americas and also Turkey. “Compared to our competitors in America and Asia, the prices for electricity and gas are too high,” said vbw managing director Bertram Brossardt. “Even in a European comparison, our costs for electricity are too high to remain a competitive industrial location in the long term,” he said, and called for a speedy government decision to introduce power price support for industry.

The current German government is considering a plan to boost the international competitiveness of its prized heavy industry by subsidising electricity, but there is significant opposition within the ruling coalition. The power prices paid by industry are one of the most contentious aspects of Germany's energy transition and its economic impacts. Business lobby groups have routinely called the price of electricity a central threat to industrial competitiveness. Yet, sweeping claims in this debate hide the fact that there is no single power price for industrial consumers, but instead an exceptionally broad range of prices. Due to a complex system of taxes and levies, they depend on how much power companies need, when they need it, how they source it, whether they compete with rivals abroad, and many other factors.