Germany’s Social Democrats propose industry power price of 5 cents

The parliamentary group of Germany’s Social Democrats (SPD) has presented its own concept for reducing power prices for energy-intensive industry – an idea so far rejected by chancellor Olaf Scholz (SPD), but also favoured by the Green-led economy and climate ministry, which tabled its own proposal earlier this year. The SPD's “transition electricity price” would limit prices to five cents per kilowatt-hour for selected industries, according to a position paper, which will be discussed during a party retreat next week. To address Scholz’s concerns, which mainly revolve around spending, the initiative would initially be limited to five years, be reviewed and adjusted if necessary after two, and end as soon as enough electricity can be generated with renewables, as this is set to bring prices down. “Nobody wants permanent subsidies,” SPD parliamentary group leader Rolf Mützenich told the Funke media group. “It's about supporting our economy wisely and accelerating the expansion of renewables.” Sectors which are considered central for the energy transition, such as producers of wind turbines, solar systems, batteries, or heat pumps, would also qualify for the subsidies.

Economy minister Robert Habeck (Green Party) proposed to introduce an industry power price of six cents per kilowatt-hour to shield energy-intensive industry from comparatively high costs in Germany and ensure it remains in the country. This would require 25-30 billion euros in state funds. The proposal was welcomed by industry as “a clear game changer”, but remains controversial among economists and policymakers – with both chancellor Scholz and finance minister Christian Lindner (FDP) repeatedly rejecting it.