“Electricity prices are falling, but in the coming years they will remain two to three times their pre-war level in Ukraine,” Economics Minister Robert Habek explained to the press.
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 Ministry of Economy and Climate confirmed that the pricing plan requires fixing the tariff of about 80 percent of the electricity of the companies that use the most energy and operating at the international level, at 6 cents per kilowatt-hour. This plan aims to maintain (capacity) 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.
“Electricity prices are going down, but in the coming years they will remain two or three times their pre-war level in Ukraine,” Economy Minister Robert Habek told the press.
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 government of German Chancellor Olaf Scholz set a ceiling on energy prices 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. 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,” Chancellor Olaf Scholz said.
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 ceiling for electricity prices for companies is currently set at 13 cents, double the fixed tariff price included in the ministry’s plan.
The average electricity price for non-residential units was 18 cents per kilowatt-hour, excluding taxes, in the second half of 2022, compared to less than 10 cents before 2021, according to statistics agency Destatis.
