German utilities support coronavirus rescue package but warn of growing impacts

Utilities association BDEW says it welcomes the German government's rescue package in response to the coronavirus crisis. The package allows small businesses to suspend payments for energy supplies until the end of June in the event of economic difficulties caused by the pandemic, among other measures. Many large and small utilities had already declared they would suspend cut-offs for private households during the crisis, said BDEW. The association, however, warned that it could significantly affect the power and water industry's liquidity if many companies suspend payments for several months. The demand for energy has already declined significantly in Germany, said BDEW, adding that "the current crisis is also an enormous challenge for the energy industry itself." The industry association said utilities would be "disproportionately burdened" as they would not only have to cover the costs of unpaid electricity but also the taxes, duties, levies and grid fees which make up 77 percent of German electricity bills. BDEW proposed that customers with payment difficulties should be protected through existing systems and state aid programmes or a fund solution. In critical cases, such a fund could be used to settle bills directly with the utilities in order to maintain liquidity in the energy system.

The extensive suspension of Germany’s industrial production to slow the spread of coronavirus will have a substantial impact on the country's energy consumption, BDEW recently said. Industrial customers account for 40 to 45 percent of Germany’s electricity and natural gas consumption, but measures to contain the virus, collapsing supply chains and withering demand at home and abroad are expected to lead to a sharp decline in power consumption.