Warnings issued over escalating electricity expenses and potential repercussions
In a bid to lower electricity prices for both consumers and industries, particularly in regions rich in wind and solar power, the German government is implementing a series of cost-reducing measures.
According to reports, Dietmar Woidke, Brandenburg's Minister President, has warned Bavaria's Minister President Markus Söder (CSU) about the threat of losing important parts of the industry due to high electricity prices. Woidke's concerns were outlined in a July letter, which was seen by the dpa.
One of the key measures being considered is the abolition of the gas storage levy by 2026. This move, expected to lower energy costs by around €10 billion annually for households and businesses, is subsidized by a €3.4 billion fund and supports accelerated investments in renewables like solar and wind.
The government also plans to lower electricity taxes and grid fees permanently for the manufacturing and agricultural sectors starting in 2026. This decision aims to directly reduce costs for industrial consumers.
To ensure grid stability with the increasing share of intermittent renewables, Germany is planning up to 20 GW of new gas-fired backup power plants equipped with advanced technologies. These plants will provide reliable supply and potentially prevent price spikes caused by supply-demand imbalances.
Simplifying and accelerating the expansion of renewable energy sources such as offshore wind and geothermal energy, as well as electricity grid infrastructure, is another proposed law. This should improve supply and reduce bottlenecks.
Moreover, efforts are being made to promote local energy sharing and the use of smart meters, which will help alleviate grid congestion and further reduce local electricity costs.
Brandenburg, a region that already generates more electricity from renewable sources than it consumes and exports it to other countries, is particularly affected by network charges that disadvantage its region. Woidke has called for these charges to be capped.
In a visit scheduled for Monday, Woidke will visit the Braunkohlekraftwerk Schwarze Pumpe power plant with Federal Minister of Economics Katharina Reiche. The purpose of the visit is not specified. The visit will take place at the Leag energy producer's plant in Spremberg, Lusatia region.
The coalition aims to ensure that the electricity tax decreases as much as possible for everyone. Woidke emphasizes the importance of companies in Germany holding their own in international competition, and electricity costs must decrease quickly to achieve this.
However, it is uncertain to what extent electricity suppliers will pass on the relief to customers. The visit and the measures outlined are part of the German government's broader energy policy, the Energiewende, which targets 80% renewable electricity by 2030, with a major increase in wind and solar capacity that is expected to push down market prices over time through increased supply.
- The government's plans to lower electricity taxes and grid fees permanently for the manufacturing and agricultural sectors starting in 2026 are aimed at directly reducing costs for industrial consumers, which could potentially help keep certain industries from migrating due to high electricity prices.
- In an attempt to simplify and accelerate the expansion of renewable energy sources, the government is looking at improving supply and reducing bottlenecks through simplifying and accelerating the expansion of renewable energy sources, such as offshore wind and geothermal energy, as well as electricity grid infrastructure.
