Federal Finance Minister Christian Lindner has reservations about a state-subsidized lower electricity price for industry. Relying on direct state aid is “economically unwise” and contradicts the principles of the social market economy, wrote the FDP politician in a guest article for the “Handelsblatt” published on Tuesday. He is therefore “very critical” of the industrial electricity price proposed by the SPD and the Greens.
Greens and SPD support an industrial electricity price. Economic State Secretary Patrick Graichen had announced a concept for the current week. The ministry announced on Tuesday that it was still being worked on. “I can’t say exactly when the concept will be presented at the moment.”
Industrial electricity for 5 or 6 cents per kilowatt hour
Even before the energy crisis, the German economy had complained that the comparatively high electricity prices in the Federal Republic were a locational disadvantage. In addition, international competition is becoming fiercer, for example because the USA is promoting industrial settlements with subsidies. Cheaper industrial electricity is to be financed with tax money.
It is still unclear how much industrial electricity will cost in Germany. Graichen had spoken of 5 or 6 cents per kilowatt hour. For comparison: Many private consumers now pay well over 30 cents.
“One thing is clear: energy prices must remain affordable for both private electricity customers and industry. However, extremely expensive subsidies are the wrong approach for several reasons,” explained Lindner. So there are problems with distributive justice. “The privilege of industrial companies could probably only be implemented at the expense of other electricity consumers and taxpayers, for example private households or trade.” In addition, there is no scope for such subsidies in the already tight budget.
Lindner prefers investment cost subsidies
Lindner also warned against false price signals. “For example, the affected companies would have no incentive over ten years to react to prices and to start electricity-intensive processes, for example when electricity is readily available and cheap.” In addition, it is difficult to decide who exactly should benefit from an industrial electricity price.
Instead, the Minister of Finance called for investment cost subsidies. A reform of electricity and energy taxes should also be considered. “In this way we would relieve all electricity customers without directly intervening in the market.” Linder also wrote that he was working on a legislative package that would provide incentives for innovation and renewal.
Chancellor Olaf Scholz expressed skepticism at a May rally of the German Trade Union Confederation (DGB) on Monday in Koblenz. The SPD politician emphasized that cheap electricity is important. In the long run, however, it is not possible “to subsidize everything that takes place in normal economic activity,” said Scholz. Where there is already a lot of wind power and solar energy, one could theoretically calculate an electricity price of 7 or 8 cents without subsidies. You have to do that for the whole of Germany. To do this, one must ensure that the electricity also comes to the south and west of Germany through national power lines.
The priority is the cheap production of electricity, emphasized Scholz. “And then you can see what you can adjust for the transition phase. But I’m in favor of taking a close look at it first.”
The association “The Family Entrepreneurs” explained that an expansion of the electricity supply would have been more economical with a longer term of the German nuclear power plants. “Because of the immense costs, only a fraction of the industry should be considered, which would result in dramatic distortions of competition to the detriment of medium-sized companies and industrial family businesses,” warned President Marie-Christine Ostermann.
The boss of the industrial union IG BCE, Michael Vassiliadis, warned against the exodus of companies. “We are calling for a uniform industrial electricity price to prevent this,” Vassiliadis told the news portal “The Pioneer”. “In return, companies must commit to climate-friendly transformation, location and employment guarantees.” Successful companies should also share in the costs of an industrial electricity price.
