Economists in Germany sceptical towards electricity and gas price cap – survey

There is low support for a gas and electricity price cap as a relief measure against high energy prices compared to other ways to shield households, a survey of economics professors at German-speaking universities conducted by the ifo found. While 83 percent of respondents are in favour of relief measures for households, only 14 percent support a gas and electricity price cap. In contrast, 68 percent support energy subsidies. Additionally, the vast majority are in favour of government measures to safeaguard all available energy sources, including nuclear power and coal, and add new ones while simultaneously providing energy saving incentives, according to the results. “The supply of electricity must be expanded and demand reduced. Demand will not fall as a result of the price cap on energy," says ifo researcher Niklas Potrafke.

Eighty-one percent of economists believe the government should increase the available energy by, for example, keeping Germany’s three remaining nuclear power plants running past 2022, the survey, which included 178 economy professors and ran between 27 September and 4 October, found. Additionally, more than two thirds support the construction of new LNG terminals, the expansion of transmission grids and the dismantling of regulation that complicate the implementation of renewable power projects. Ninety-four percent said they expect Germany to slide into recession as a result of the energy price crisis, the survey found.

After significant delivery reductions, Russian gas imports into Germany were completely halted in September, reducing available energy supply and skyrocketing gas and electricity prices. In order to protect households and businesses, the German government has adopted three relief packages with a combined worth of around 95 billion euros. Additionally, a 200-billion euro ‘defence shield’ was agreed on in late September.