Industry  |  Publications  |  29.10.2012

Energy transition in Germany: is industry sharing the costs?

German industry, consuming 50% of national energy, is only sharing 25% of the costs of the German energy transition. This disparity is even larger for the most energy intensive industries which, consuming 18% of national energy, merely share 1% of the costs. A new study, published by Green Budget Germany on request of the German Greens in the Bundestag, reveals these facts and shows the dimension of the benefits for the carbon-intensive industry according to the current allocation.

The energy transition in Germany raises several questions. One of the most important is: Who is paying for the change? The carbon-intensive industry is complaining about the amount of its fees and the content of the Renewable-Energy-Act (EEG) which orders different additional charges for every used kWh. This law came into force in 2000 in order to promote renewable energies. With increasing energy costs during the last years, the additional charges rose too. However, the costs haven’t increased proportionally for consumers. Today SMEs and private households pay a much higher surcharge than large enterprises. For instance, private households, which have to pay an extra fee (3,6 Ct/kWh) stand in high contrast to the additional charge big companies have to pay (0,05Ct/kWh).

Although nearly half of electricity is consumed by industry, this sector pays a relatively small proportion of the costs of the energy transition. The exemptions and perks for carbon-intensive companies apply to about a quarter of the total net energy consumption in Germany. Exceptions in the law mean that in 2012 privileged companies will bear less than one percent of the cost burden under the Renewable-Energy-Act. The extra low charges are neither linked to the intensity of trade of the company nor to its competitive level. As a result, low energy costs reduce the incentive to increase energy efficiency. Also, the incentives for higher energy use even lead to incentivizing companies for wasting energy.

At the same time, in recent years an additional supply of wind and solar energy has significantly decreased prices at the energy stock market. In 2012, big sized companies will be able to save costs of 727 Million Euro. Hence, the development of renewable energies results in financial gains by industry. Consequently, the sector will save about 600 Million Euro only in 2012. In the period 2010 to 2012, the accumulated profit for carbon-intensive businesses achieves even 1.5 Billion Euro.

The text was adapted from the executive summary of the study.

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