Lower electricity prices are the key to Germany’s economic recovery, state premier says

Lowering electricity prices is the single most important step Germany must take to revive its struggling economy and maintain its position as an industrial powerhouse, Brandenburg state premier Dietmar Woidke told newspaper Die Welt. Strengthening Germany’s competitiveness is the federal government’s central task, the Social Democrat (SPD) politician said. “This will only succeed if we do everything to bring down energy prices quickly, especially electricity prices,” he argued. 

Germany's electricity prices are among the highest across Europe and, currently, subsidies are the only instrument to bring them down, Woidke said. “This is not sustainable.” He backed federal economy minister Katherina Reiche's call to reduce overall energy system costs, adding that resistance from groups benefitting from the current set-up is to be expected. “Many have become accustomed to high profits thanks to elevated prices,” he said. 

Woidke pointed at wind farm operators as an example, noting that they are entitled to 20 years of guaranteed remuneration for their investments irrespective of the turbines’ location or the capacity of local grids. “And if their electricity is not demanded or cannot be used, they still receive money,” the SPD state premier said, adding that this needs to stop.

The Eastern German state premiers comments come amid a wider debate about the future funding of Germany's energy transition and industry competitiveness amid decarbonisation, championed by federal economy minister Katherina Reiche. Critics have said that policy proposals coming from Reiche's ministry that could cut support and grid access priorities for renewable operators risk slowing the country's transition to clean energy sources. Brandenburg is one of Germany's leading wind power states, but also still has a large coal industry that is set to be shuttered in Germany's coal phase-out in 2038 at the latest. 

The Social Democrats, which act as a junior partner to chancellor Friedrich Merz’s conservative CDU/CSU alliance in the federal coalition government, had to appeal to workers in the energy transition, Woidke said, warning that the SPD are increasingly losing its traditional voter base to the far-right Alternative for Germany (AfD). “How can we keep energy-intensive industries in the country? How can we find a positive definition of combining climate action and economic growth? We are not giving answers to these questions at the moment,” he said.