News
18 Oct 2021, 13:21
Benjamin Wehrmann

First German officials call for support payments amid energy price hike as industry’s worries grow

Tagesspiegel Background / Welt am Sonntag / Frankfurter Allgemeine Zeitung / Die Welt

The energy price hike across Europe is causing further worries among German officials and company leaders, with the first politicians openly calling for support payments to help poorer households weather the surge in costs. Conservative interior minister Horst Seehofer (CDU) said the responsible ministries would have to “quickly develop measures” to help struggling households “also in the short run,” energy policy newsletter Tagesspiegel Background reported. In an interview with Welt am Sonntag, Bavaria’s state premier said that “we should provide heating allowances and lower energy taxes as a short-term response to exploding energy prices.” He said the environmentally friendly policies should not come at the expense of social cohesion. Wolfgang Tiefensee, Social Democrat  economy minister of central German state of Thuringia, called for one-off payments, Frankfurter Allgemeine Zeitung reported. "These support payments could be tied to housing allowances in a quick and uncomplicated way," Tiefensee said. In the same article, Rainer Dulger, head of the Confederation of German Employers’ Associations (BDA), said the energy crisis gives reason to ponder longer run times for the country’s coal-fired power plants. "If we discover that the exit schedule has been too ambitious and renewable energy sources will only be safely available later" then alternatives should be discussed openly, Dulger said. The BDA head also stressed that he considers the decision to leave nuclear power earlier than coal wrong as companies would depend on affordable energy. “What is happening at the moment is a cause for concern,” he added. Saxony’s energy minister Wolfram Günther of the Green Party argued that the slow pace of renewables expansion is partly to blame for the energy price crisis. “We wouldn’t be seeing these high prices if we had an adequate speed” in building new wind turbines and solar panels, Günther said. Consumer protection organisation vzbv calculated that the higher prices will significantly increase the average household energy bill, newspaper Die Welt reported. In a flat of 100 square metres, consumers would pay about 980 instead of 770 euros per year for natural gas for heating and warm water. However, customers, of course, could influence the prices they pay by choosing cheaper providers or consuming less thanks to better insulated buildings.

Prices for gas and electricity have reached new record levels in Europe in recent months due to a wide range of reasons. Economic recovery in many countries around the world after the coronavirus pandemic’s effects have subsided has let demand spike, while renewable power output has been low and gas storages lower than usual after the past cold winter season. Higher prices in the European emissions trading system ETS have also contributed to higher overall costs for energy.

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