The FDP parliamentary group deputy wants to relieve the burden on medium-sized businesses

2023-09-15 15:43:24

The pressure on the federal government to supply energy-intensive industries with cheaper electricity is increasing. For months, the SPD, Greens and FDP have been discussing relief in view of the comparatively high international energy prices. Federal Economics Minister Robert Habeck (Greens) had proposed a state-subsidized bridge electricity price that would be capped at 6 cents per kilowatt hour for 80 percent of historical consumption. The SPD parliamentary group even wants a limit of 5 cents per kilowatt hour.

The deputy FDP parliamentary group leader Lukas Köhler is now presenting new proposals in the FAZ: He would like to exempt small and medium-sized companies from taxes, levies and levies and significantly reduce their network fees. A new instrument is intended to serve this purpose: so-called own electricity PPAs. Medium-sized companies should have easier access to such “power purchase agreements” through standardized products, i.e. direct electricity supply contracts between power producers and industrial companies.

Probably a decision on Tuesday

The electricity purchased should then be treated for regulatory purposes like electricity that is produced and consumed on the company’s own factory premises – even if there is no direct power line between the power plant and the industrial customer. This eliminated the usual additional price components. “On the one hand, medium-sized businesses would also be supplied with cheap electricity, and on the other hand, more renewable systems and storage systems would be built,” says Köhler.

The term of the supply contracts should be limited to ten years. The FDP MP does not provide any information about the costs of the instrument. His proposal is to be decided on Tuesday in the FDP parliamentary group. Like Finance Minister Christian Lindner (FDP), Köhler also continues to insist on reducing the electricity tax from the current 2.05 to the minimum permitted under European law of 0.05 cents per kilowatt hour – a privilege that many energy-intensive companies already enjoy.

Would you prefer production-based funding?

Economics Minister Habeck’s ideas are not only met with criticism within the FDP. A new, as yet unpublished report by the think tank Epico and the consulting firm Aurora Energy raises doubts that wholesale electricity prices will actually fall to 6 cents by 2030 and that the bridge electricity price proposed by Habeck can expire that year. Even with a rapid expansion of renewables, analysts expect prices of between 8 and 11 cents. They also reiterate doubts about the compatibility of the Ministry of Economic Affairs’ plans with EU law.

Nina Bub and Michael Hinz (photos), Gau-Algesheim Published/Updated: , Recommendations: 16 Joachim Weimann Published/Updated: , Recommendations: 145 Christian Müßgens Published/Updated: , Recommendations: 6

According to the report, a bridge electricity price would not only have to be approved by the EU Commission in terms of state aid. It also goes beyond what is permissible as a “regulated price” according to the current electricity market design. “If the proposal from the Federal Ministry of Economics were implemented in this way, Germany could maneuver itself into a ‘toll problem’ again,” says Bernd Weber, Managing Director of Epico.

Weber also points out that the energy-intensive industry is already exempt from most government price components and would not benefit from Köhler’s proposals. To support the energy-intensive industry in the short term, Epico and Aurora are proposing production-based support with a fixed phase-out date, i.e. payments per ton of steel or glass produced. The funding could be auctioned economically efficiently. This would avoid interventions in the electricity market and provide incentives for flexibility and energy saving. CO2 differential contracts could serve as a model. Here the state protects industrial companies against fluctuating prices in European emissions trading and thus promotes climate-friendly investments.