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ENERGY

Berlin bids to put energy grid back in public hands

Berliners will vote on whether to take the city's electricity grid back into public hands in a referendum on November 3rd. Millions of letters have been sent out urging people to vote “yes”, but opponents believe it will increase Berlin's debt.

Berlin bids to put energy grid back in public hands
Photo: DPA

A citizens' initiative called Berliner Energietisch wants residents to have more say over the way Berlin's energy is managed and hopes to boost the city's move to clean electricity by founding its own public utility.

At the end of next year, the capital's 20-year contract with energy provider Vattenfall is due to expire. And the people behind the referendum see it as a chance to take the city grid back into public hands, redirect energy profits to Berlin and give citizens a chance to steer energy policy.

In letters sent out to Berlin's 2.4 million eligible voters at the start of this month, the group urged citizens to vote for an “affordable, ecological and democratic energy supply,” which it said would allow them a say on how the utility is run.

The initiative is also claims to have green credentials as it would attempt to abandon coal and nuclear sources and establish “decentralized, renewable energy plants in Berlin-Brandenburg” as part of the city's goal to switch to 100 percent renewable energy.

Although supported by left-wing parties including the opposition Greens, Pirate Party and the Left Party in the regional Berlin Senate, the ruling Social Democrat (SPD) Christian Democrat (CDU) coalition has come out against the plan and in early September recommended that citizens reject the move.

The city's rulers say the initiative is unnecessary, as they are already “pursuing a policy of decentralized energy supply, advancement of renewable energies and securing affordable energy prices.”

The bottom line, say the CDU, is that Berlin just does not have the money. The costs involved in buying back the city's grid, the party says, would put an unmanageable burden on an already over-strained budget.

Berlin-based economist and director of NGO Young Voices, Fred Roeder, told The Local the move could have “fatal effects on the competitiveness and credit rating of Berlin.”

“Berlin’s per capita debt is already higher than that of the bankrupt city of Detroit. After acquiring the energy grid for up to €3 billion, the public finances and credit rating of Berlin would be even worse than they already are,” said Roeder.

The bill for the grid license would increase the city's debt by around five percent, he said, and would push interest costs up by €100 million a year. “This illustrates how economically non-viable this initiative is and that the promised return on investment … won’t be realized.”

Regional business groups such as the Berlin branch of the IHK industry and trade association have also warned against the move, which they believe will be a further drain on resources which could instead go to help the city's entrepreneurs.

Citizens can kick-start referendums in Berlin if they collect signatures from at least seven percent of the city's eligible voters for a petition. The last time this happened was a public vote in 2011 on a motion demanding the partially privatized water works open its books to the public.

If this result is anything to go by, Berliners are generally staunchly in favour of having a greater say in the way their utilities are run. Back then an overwhelming 98.2 percent of the 678,000 voters who turned out said they wanted more transparency for the city's water contracts.

The referendum on November 3rd needs at least a 25 percent turn-out to be considered valid, meaning the initiative needs 630,000 residents to vote in favour for it to pass.

READ MORE: Water utility referendum a 'cold shower' for Berlin

The Local/jlb

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ENERGY

German government announces fresh relief package for high energy costs

With Russia's invasion in Ukraine exacerbating high energy and petrol prices, Germany is set to introduce a second relief package to limit the impact on consumers.

German government announces fresh relief package for high energy costs

The additional package of measures was announced by Economy and Climate Protection Minister Robert Habeck (Greens) on Sunday.

Speaking to DPA, Habeck said the wave of price increases throughout the energy sector were becoming increasingly difficult for households to bear.

“Extremely high heating costs, extremely high electricity prices, and extremely high fuel prices are putting a strain on households, and the lower the income, the more so,” he said. “The German government will therefore launch another relief package.”

The costs of heating and electricity have hit record highs in the past few months due to post-pandemic supply issues. 

This dramatic rise in prices has already prompted the government to introduce a range of measures to ease the burden on households, including abolishing the Renewable Energy Act (EEG) levy earlier than planned, offering grants to low-income households and increasing the commuter allowance. 

READ ALSO: EXPLAINED: What Germany’s relief package against rising prices means for you

But since Russia invaded neighbouring Ukraine on February 24th, the attack has been driving up energy prices further, Habeck explained.

He added that fears of supply shortages and speculation on the market were currently making the situation worse. 

How will the package work?

When defining the new relief measures, the Economics Ministry will use three criteria, Habeck revealed. 

Firstly, the measures must span all areas of the energy market, including heating costs, electricity and mobility. 

Heating is the area where households are under the most pressure. The ministry estimates that the gas bill for an average family in an unrenovated one-family house will rise by about €2,000 this year. 

Secondly, the package should include measures to help save energy, such as reducing car emissions or replacing gas heating systems.

Thirdly, market-based incentives should be used to ensure that people who use less energy also have lower costs. 

“The government will now put together the entire package quickly and constructively in a working process,” said Habeck.

Fuel subsidy

The three-point plan outlined by the Green Party politician are not the only relief proposals being considered by the government.

According to reports in German daily Bild, Finance Minister Christian Lindner (FPD) is allegedly considering introducing a state fuel subsidy for car drivers.

The amount of the subsidy – which hasn’t yet been defined – would be deducted from a driver’s bill when paying at the petrol station. 

The operator of the petrol station would then have to submit the receipts to the tax authorities later in order to claim the money back. 

Since the start of the war in Ukraine, fuel prices have risen dramatically in Germany: diesel has gone up by around 66 cents per litre, while a litre of E10 has gone up by around 45 cents.

READ ALSO: EXPLAINED: The everyday products getting more expensive in Germany

As well as support for consumers, the government is currently working on a credit assistance programme to assist German companies that have been hit hard by the EU sanctions against Russia.

As reported by Bild on Saturday, bridging aid is also being discussed for companies that can no longer manage the sharp rise in raw material prices.

In addition, an extension of the shorter working hours (Kurzarbeit) scheme beyond June 30th is allegedly being examined, as well as a further increase in the commuter allowance.

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