High energy prices bring about “first signs of deindustrialisation” in Germany – RWE head

The head of Germany’s largest energy company, RWE, has warned that high prices for energy due to limited supply threaten the continued existence of the country’s industrial foundation. “We see the first signs of deindustrialisation,” RWE CEO Markus Krebber told the tabloid Bild Zeitung. “Germany’s wealth is based on strong industry,” Krebber said, arguing that high energy prices increasingly lead companies to relocate and create new jobs elsewhere. “We don’t have as much energy as we need (…) this gap leads to high prices and thus to justified concerns about competitiveness.” Krebber said the right answer would be to “massively invest in green energy sources,” arguing that “the will and the money is there.” The only thing holding investments in renewable sources back are the surrounding regulatory conditions that create hurdles to renewable power expansion rather than incentivising it, he argued.

Germany has been a net-exporter of electricity for several years, including during the recent energy crisis of 2022. The closure of the country’s three remaining nuclear power plants in mid-April 2023 drew criticism from opposition parties for potentially leading to higher power prices. However, price spikes did not materialise in the immediate aftermath. The government has drawn up proposals to ensure affordable energy prices for industrial customers and earlier this week introduced a scheme for “climate contracts” worth billions of euros in funding to support companies in decarbonising and increasing energy efficiency.