Five cents for five years
SPD wants to warm up Scholz for industrial electricity
08/24/2023 02:38 am
High energy prices are depressing the German economy, but Scholz and the FDP are against a government cheap electricity tariff. The SPD now wants to convince the chancellor and proposes limiting the subsidy to five years.
With a concrete concept for an industrial electricity price, the SPD wants to dispel Chancellor Olaf Scholz’s concerns about such a state subsidy in the Bundestag. The executive committee of the parliamentary group wants to adopt a position paper this Thursday, according to which the electricity price before taxes and surcharges should be limited to five cents per kilowatt hour for at least five years for selected sectors. The state is supposed to cover the difference to the average market electricity price, which is currently around 8.95 cents. At the beginning of next week, the parliamentary group is to decide on the concept at its closed meeting in Wiesbaden. Scholz is also expected at the consultations in the Hessian capital. To prepare for the exam, the parliamentary group board will meet on Thursday in Erlangen, Bavaria.
With five cents, the concept of the SPD parliamentary group leader for what they call the “transformation electricity price” goes further than that of Economics Minister Robert Habeck, who proposed six cents. Given the high energy costs in Germany, the temporary subsidization is intended to strengthen the competitiveness of the German economy.
Above all, companies that consume a lot of energy should be relieved. In addition, there are the key sectors for a climate-friendly conversion of the German economy, for example producers of wind turbines, solar systems, batteries or heat pumps. This is to ensure that the transformation continues to gain momentum. According to the SPD position paper, the high electricity costs are “poison for investment decisions” for Germany. They are “the central problem for international competitiveness in the transformation process on the way to climate neutrality”. Claiming the prize is to be linked to location and employment guarantees by the companies. In addition, collective agreements or at least orientation towards collective agreements are required.
Chancellor criticizes false incentives
Scholz had only expressed skepticism about an industrial electricity price last week. “We cannot and will not afford a debt-financed flash in the pan that will fuel inflation again, or a long-term subsidy of electricity prices with the watering can,” he said. “That would be economically wrong, fiscally unsound and would certainly create the wrong incentives.”
The SPD position paper now addresses this. It provides for a time limit of initially five years, during which the expansion of renewable energies is to be accelerated. After just two years, the price of five cents is to be reviewed and adjusted if necessary. After four years, a decision will then be made as to whether an extension of the period is necessary. In any case, the support should end as soon as enough electricity can be generated from renewable energies. “Nobody wants permanent subsidies or a flash in the pan,” said SPD parliamentary group leader Rolf Mützenich to the newspapers of the Funke media group. “It’s about supporting our economy in a smart way and accelerating the expansion of renewables.”
According to the ideas of the SPD parliamentary group leader, the “transformation electricity price” is to be financed via the economic stabilization fund – a special fund of the federal government, from which the energy price brakes are paid. However, the costs for this are significantly lower than expected. The FDP rejects an industrial electricity price and an opening of the fund. Many countries, trade unions and business associations, on the other hand, have been calling for an industrial electricity price for a long time. Energy costs in Germany have risen massively as a result of the Russian attack on Ukraine, because Germany had to free itself from its dependency on cheap Russian gas supplies.