Germany must do more to reduce energy prices, say industry groups
Clean Energy Wire
Germany needs further measures to reduce energy prices in the long term, industry representatives said in response to the government cabinet’s agreement on new draft bills. The draft bills to reduce electricity grid fees in 2026 and lower electricity taxes were steps in the right direction, but energy-intensive industries urgently needed planning security, said the Steel Industry Association and the Chemical Industry Association (VCI) in separate responses.
The cabinet agreed to provide a subsidy worth 6.5 billion euros to finance transmission grid costs, as well as to permanently reduce electricity taxes to the EU minimum rate for over 600,000 companies in the manufacturing and agriculture sectors. Grid fees are added to electricity bills to ensure grid operators can manage the transport of electricity and cover investment costs that go towards expanding and modernising the electricity transmission infrastructure.
“Companies need planning security with regard to the electricity tax and the assurance that the lower grid fees will not suddenly rise again after 2026,” VCI wrote in a press release. The association’s head, Wolfgang Große Entrup, called for a swift introduction of the promised “industry power price” that is meant to offer energy-intensive companies electricity supply at a lower rate.
“We need a reliable and long-term reduction in grid fees,” said Kerstin Maria Rippel, head of the German Steel Association. “Annual individual decisions also mean annual uncertainty whether there will be a further extension and what form it will take.” Rippel said this uncertainty was “poison” at a time when businesses needed to make investments worth billions to transition to climate-friendly production.
The Association of Local Utilities (VKU) criticised that energy price cuts so far had focussed too much on natural gas and neglected the reduction of electricity prices. This course of action would be sending "contradicting messages," said VKU head Ingbert Liebing.
Germany’s new government parties pledged to reduce electricity prices in their coalition agreement. However, the coalition drew criticism when it unveiled its plans for largely leaving households and small businesses out in the cold. At the same time, price comparison website Verivox earlier this week said that developments in the gas market had allowed prices for new customers to fall to the lowest level so far in 2025, to 9 cents per kilowatt hour. "Especially customers that are still paying prices prevailing during the energy crisis in 2022 and 2023 should take a critical look at their current gas bill. Perhaps they're paying much more than necessary," said Verivox energy expert Thorsten Storck.
German industry has lobbied hard for many years at the national and EU level for lower electricity prices. The EU has strengthened its focus on industry competitiveness in recent years, with policy changes triggered by lacklustre growth, as well as the bloc’s independence drive fuelled by Russia’s weaponisation of energy following its war against Ukraine, and the bloc’s alienation from the US.
Separately, the cabinet also agreed to new rules to reduce the scope of reporting that businesses are required to do on their supply chains and sustainability, in a bid to cut bureaucracy. The move was welcomed by the energy industry, but met with criticism from climate group Germanwatch and certifier association TÜV.
