German Industry Wants Others to Pay for Energiewende Costs

Germany has been an industrial powerhouse since it rebuilt its manufacturing capacity after the Second World War. Now, because of yet another ideological misventure called “The Energiewende”, it risks losing its industrial competitiveness once more. And it wants everyone to split the bill.

In 2020, when the German EU presidency was upon us, German energy-intensive industries raised their voices in lobbying. Metal-processing industries[1] as well as other energy-intensive companies[2] called for what they call “A European power price for industry.” It is, in essence, just that: a common electricity price for industrial power users in EU.

As a reason for this, the industries state that power prices in Germany are too high and fluctuating. This is, of course, a direct result of German energy policy of closing nuclear power and adding renewables with the help of significant feed-in-tariffs and other subsidies. The situation will likely only get worse as Germany closes the rest of their nuclear power plants prematurely in 2021 and 2022 and struggles to meet its emissions reduction targets by adding more variable renewable energy production.

Right now, German energy intensive industries are exempt from paying the EEG surcharge that is used to pay the tariffs for renewable energy producers. As Germany needs more and more of wind, solar and biomass to get to their emissions reduction targets, while simultaneously ensuring grid stability gets harder and costlier, the energy intensive industries are maybe seeing the writing on the wall: they will need to start chipping in sooner or later, increasing their energy costs further.

All of this would hurt German industrial competitiveness, jobs, perhaps push more investments into other EU countries with stable and low-cost electricity down the road. No wonder they suggest a common electricity price for EU industry.

Now, solidarity is one thing, but this is something the German government knowingly wanted, planned for, and meticulously implemented in their country. It is no accident, nor is it anyone else’s doing. You made your bed, now you lie on it. Or if you want things to be different, then you change them within Germany, not by exporting your problems to your neighbors.

Further, the Germans have been pushing their Energiewende and anti-nuclear agenda on everyone else for decades. They have systematically worked to get nuclear excluded from EU taxonomy on sustainable financing, Green New Deal and Covid-relief programs, making nuclear more expensive and discouraging anyone from investing in it and making decarbonization needlessly expensive for everyone. And now they want everyone to also pay for their domestic mess?

Other EU countries should perhaps go opposite direction and start serious nuclear programs, along with renewable energy programs most already have. Not only would this help keep EU on track to meet its climate targets, it might indirectly help Germany and other anti-nuclear countries in EU as well. The more we have low emissions energy supply, the lower prices for emissions credits in the emissions trading system (ETS) will be. As the EU agreed on tightening its emissions reduction targets to better comply with the Paris agreement we have signed, the ETS prices have skyrocketed from their 2020 levels in 2021. As Germany and other no-nuclear countries are bound to be more reliant on fossil fuels to keep their lights on and industry humming while they build-up their renewable energy sources, this can be good news for them as well.

ENDNOTE: I wrote this piece already back in 2020, but forgot to publish it anywhere so that’s why it is a bit dated in places. I did do some minor updates.

[1] https://www.cleanenergywire.org/news/german-metal-processing-industry-calls-common-european-industry-power-price

[2] https://www.cleanenergywire.org/news/german-energy-intensive-companies-call-europe-wide-industry-power-price