Germany is considering setting a limit for the electricity cost for the industrial sector until 2030
“Electricity costs are falling, but in the coming years they will remain two or three times their pre-war level in Ukraine,” Economics Minister Robert Habeck said.
Berlin is studying stabilizing electricity prices until 2030 for the most energy-consuming industries by subsidizing their expenditures, after this sector was affected by high costs, according to a plan that was revealed Friday, but it does not have consensus.
A working document issued by the German federal Ministry of Economy and Climate confirmed that the pricing plan stipulates fixing the tariff of about 80% of the electricity of the companies that use the most energy and operate at the international level at 6 Euro cents per kilowatt-hour.
This plan aims to preserve the competitiveness of the vital sectors of the largest economy in Europe, such as chemicals, paper, glass and steel, which are sectors that are threatened by moving abroad due to high energy prices in Germany, according to the ministry.
Germany was greatly affected by the rise in energy prices following the outbreak of the war in Ukraine because part of its economic model was based on cheap Russian gas supplies, which were halted by the conflict.
Last year, the German Chancellor Olaf Scholz set a limit on energy costs for individuals and companies, which is supposed to be applied until mid-2024.
Measures taken by Berlin to curb rising gas and electricity prices, which were at the heart of a 200 billion Euro plan approved by the government last year, have fueled criticism from some of its European partners, who denounced unfair competition.
Habeck defended the new plan, stressing that it will provide a period of stability for the industrial sectors most vulnerable to threats, as these sectors are forced to make huge investments to reduce carbon emissions.
His project is being criticized within the government itself, as Liberal Finance Minister Christian Lindner this week called the idea “not smart” and expressed concern about “expensive subsidies”.
“The economy should not depend on long-term support,” said Chancellor Olaf Scholz.
The entire plan will cost between “25 and 30 billion Euros,” according to the economy ministry, which proposes deducting this amount from the 200 billion Euros released last year.
The limit for electricity prices for companies is currently set at 13 Euro Cents, double the fixed tariff price included in the ministry’s plan.
The average cost of electricity for non-residential units was 18 Euro cents per kilowatt-hour, excluding taxes, in the second half of 2022, compared to less than 10 Euro cents before 2021, according to the German statistics agency.