Consumers to lose out to energy-guzzlers

Dozens of German energy-guzzling companies have applied for special exemption from grid charges, meaning that private consumers will end up paying more for their electricity.

Consumers to lose out to energy-guzzlers
Photo: DPA

According to a report in the Frankfurter Rundschau newspaper, the Economics Ministry has revealed that 159 large companies have applied for a special exemption from grid charges up until December 2, way more than was announced by the various industry associations.

The new exemptions for intensive energy-consuming companies were brought in – almost without anyone noticing – by the German government during the summer. It was only revealed last month that this would increase electricity bills for everyone else.

The grid charges are meant to cover the maintenance and extension of Germany’s power grid, which has to be adjusted followed the government’s decision to shut down its nuclear power stations by 2022.

According to the exemption, companies that use more than 10 million kilowatt hours per year will not have to pay.

Following an initial report by the newspaper about the special exemption, industry associations denied that it would have any impact on consumers, since only around 20 companies would apply. That statement has now been revealed as untrue.

Green Party MP Ingrid Nestle, who made the official information request to the ministry, was incensed by the discrepancy. “The industry is trying to manipulate us with false numbers,” she said.

It is unclear how much the exemptions will cost private consumers, but the Economics Ministry estimates that it will come to at least €231 million – an increase of 0.75 cents per kWh, between €26 and €40 per year for a three-person household.

Nestle is particularly angered by the surreptitious nature of the deal. “We need a transparent discussion about exempting energy-intensive industries, not midnight deals with lobby groups,” she said.

She also called for the “brazen gift” to the energy-guzzling companies to be taken back.

The Local/bk

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.


German consumer prices set to rise steeply amid war in Ukraine

Russia's war in Ukraine is slowing down the economy and accelerating inflation in Germany, the Ifo Institute has claimed.

German consumer prices set to rise steeply amid war in Ukraine

According to the Munich-based economics institute, inflation is expected to rise from 5.1 to 6.1 percent in March. This would be the steepest rise in consumer prices since 1982.

Over the past few months, consumers in Germany have already had to battle with huge hikes in energy costs, fuel prices and increases in the price of other everyday commodities.


With Russia and Ukraine representing major suppliers of wheat and grain, further price rises in the food market are also expected, putting an additional strain on tight incomes. 

At the same time, the ongoing conflict is set to put a dampener on the country’s annual growth forecasts. 

“We only expect growth of between 2.2 and 3.1 percent this year,” Ifo’s head of economic research Timo Wollmershäuser said on Wednesday. 

Due to the increase in the cost of living, consumers in Germany could lose around €6 billion in purchasing power by the end of March alone.

With public life in Germany returning to normal and manufacturers’ order books filling up, a significant rebound in the economy was expected this year. 

But the war “is dampening the economy through significantly higher commodity prices, sanctions, increasing supply bottlenecks for raw materials and intermediate products as well as increased economic uncertainty”, Wollmershäuser said.

Because of the current uncertainly, the Ifo Institute calculated two separate forecasts for the upcoming year.

In the optimistic scenario, the price of oil falls gradually from the current €101 per barrel to €82 by the end of the year, and the price of natural gas falls in parallel.

In the pessimistic scenario, the oil price rises to €140 per barrel by May and only then falls to €122 by the end of the year.

Energy costs have a particularly strong impact on private consumer spending.

They could rise between 3.7 and 5 percent, depending on the developments in Ukraine, sanctions on Russia and the German government’s ability to source its energy. 

On Wednesday, German media reported that the government was in the process of thrashing out an additional set of measures designed to support consumers with their rising energy costs.

The hotly debated measures are expected to be finalised on Wednesday evening and could include increased subsidies, a mobility allowance, a fuel rebate and a child bonus for families. 

READ ALSO: KEY POINTS: Germany’s proposals for future energy price relief

In one piece of positive news, the number of unemployed people in Germany should fall to below 2.3 million, according to the Ifo Institute.

However, short-time work, known as Kurzarbeit in German, is likely to increase significantly in the pessimistic scenario.