No decision this week
Traffic light needs more time for gas price brake
11/14/2022, 4:45 p.m
The traffic light government actually wanted to approve the draft laws on energy price brakes this week. But because details are still open, the schedule has burst. As planned, the topic should be on the table in the Federal Council at the beginning of December.
Due to many unresolved questions, the federal government is postponing the legislative decision on the gas and electricity price brake. “In view of the complexity and also the need for coordination, which we see in particular with the EU, there will probably no longer be a cabinet referral this week,” said deputy government spokeswoman Christiane Hoffmann in Berlin.
The government actually wanted to present the necessary draft laws this week and pass them on Friday. However, the goal remains that the entire project will then be finally approved by the Federal Council at the beginning of December, said Hoffmann. It must have passed the Bundestag by the end of November.
The gas and electricity price brakes provide for capped prices for a certain basic consumption and are the core of the relief for households and industry in the energy crisis. In the morning, the Federal Council decided on the so-called December aid in a special session. It is intended to serve as a bridge to the planned second stage, the actual gas price brake. Then, from March, 80 percent of the basic consumption of households and businesses will be capped at twelve cents per kilowatt hour.
The industry will then have to pay seven cents for 70 percent of consumption – this is planned for January. Then the electricity price brake should also take effect: tariffs for households would be limited to 40 cents per kilowatt hour. Industry then gets electricity for 13 cents, also for 70 percent of consumption. A total of up to 200 billion euros are available for the energy price brakes, which are to run until spring 2024.
Foundation sees gas price brake critical
At the same time, so-called random profits from electricity producers are to be skimmed off. This is intended to co-finance electricity and gas price brakes. According to government circles, the main problem here is that although the EU has specified framework conditions, implementation is extremely complex. Depending on the type of technology, certain revenues should be able to remain with the producers. Anything beyond that will be skimmed off. However, this requires an intervention in the energy market. The government has provided separate regulations for this in key points. She has already had to move away from the plan to collect retrospective proceeds since March. Most recently, it was planned that the levy should apply from November.
According to a study by the union-affiliated Hans Böckler Foundation, however, the gas price brake is also problematic: the authors warn that industrial companies could resell the subsidized gas. This could lead to these companies then cutting back on production and turning into gas traders. The consequence from the point of view of the scientists: “There is not only a risk of severe production declines in the energy-intensive sectors, but also far-reaching cascade effects.” As in the Corona crisis, the lack of relatively cheap components could lead to the standstill of entire production lines.