Government aid for companies that are particularly hard hit by high electricity prices has been discussed for weeks. The chancellor is skeptical. His SPD pushes. And the FDP is on the brakes.
With a push for a limited industrial electricity price of five cents per kilowatt hour, the SPD in the Bundestag wants to dispel Chancellor Olaf Scholz’s concerns about such state aid. The executive SPD parliamentary group board decided on Thursday in Erlangen, Bavaria, on a position paper that the entire parliamentary group is to decide on next Monday at their closed meeting in the presence of Scholz. According to this, the electricity price for selected companies is to be capped at five cents before taxes and surcharges for at least five years. The state is supposed to cover the difference to the average market electricity price, which is currently around 8.95 cents.
No reaction from the Chancellor
Group leader Rolf Mützenich made it clear in Erlangen that he hopes for an understanding with Scholz during the exam on Monday. “We don’t want to get the chancellor to change his mind, we want to do something together.” Mützenich emphasized that changes to the concept are still possible. The exam in Wiesbaden should then bring a “clear orientation” with a view to the upcoming budget deliberations in the Bundestag in the fall.
Scholz initially did not comment on the concept during a visit to Bavaria on Thursday. At an event in Geretsried, he merely pointed out the importance of energy costs for Germany as an investment location. “All investors are interested in whether there is enough affordable energy available locally,” he said.
The FDP immediately rejected the SPD concept. “The energy prices are too high for everyone and the Ministry of Economics should come up with solutions on how industry, people and companies could be relieved,” said parliamentary group leader Christoph Meyer of the editorial network Germany.
Five instead of six cents: SPD undercuts Habeck
The SPD, on the other hand, has the Greens on its side, whose leader Katharina Dröge welcomed the move. “I am very pleased that the SPD parliamentary group has backed Robert Habeck’s idea of the industrial electricity price,” she told the German Press Agency. Habeck proposed six cents per kilowatt hour and is now even undercut by the SPD parliamentary group leader.
The temporary state aid is intended to strengthen the competitiveness of the German economy in view of the currently comparatively high energy costs in Germany. Above all, companies that consume a lot of energy should be relieved. In addition, according to the ideas of the SPD faction leadership, there are the key sectors for a climate-friendly conversion of the German economy, for example producers of wind turbines, solar systems, batteries or heat pumps.
Electricity prices “poison” for investments
This is to ensure that the so-called transformation continues to pick up speed. In the position paper, the measure is therefore also somewhat awkwardly called the “transformation electricity price”. According to the concept, the high electricity costs are “poison for investment decisions” for Germany. They are “the central problem for international competitiveness in the transformation process on the way to climate neutrality”.
The subsidy is to be linked to location and employment guarantees by the companies. In addition, collective agreements or at least orientation towards collective agreements are required.
No permanent subsidy: Chancellor’s concerns already taken into account
Scholz had only expressed skepticism about an industrial electricity price last week. “We cannot and will not afford a debt-financed flash in the pan that will fuel inflation again, or a long-term subsidy of electricity prices with the watering can,” he said. “That would be economically wrong, fiscally unsound and would certainly create the wrong incentives.”
The SPD position paper now addresses this. It provides for a time limit of initially five years, during which the expansion of renewable energies is to be accelerated. After just two years, the price of five cents is to be reviewed and adjusted if necessary. After four years, a decision will then be made as to whether an extension of the period is necessary. In any case, the support should end as soon as enough electricity can be generated from renewable energies. “There cannot and must not be a permanent subsidy,” the paper says.
Source of money: Energy price brake fund
According to the ideas of the SPD parliamentary group leader, the “transformation electricity price” is to be financed via the economic stabilization fund – a special fund of the federal government, from which the energy price brakes are paid. However, this requires significantly less money than expected.
The FDP is still against touching this pot. “The Economic Stabilization Fund cannot be used as a fire brigade for the botched energy transition,” said Meyer.
Greens demand a complete package with an industrial electricity price in Meseberg
It is quite possible that the industrial electricity price will now also be an issue at the cabinet meeting at Schloss Meseberg near Berlin next Tuesday and Wednesday. The Greens parliamentary group leader Dröge demanded this on Monday: “I would actually like to have an overall economic policy package in Meseberg, which is then also able to adequately address the investment weaknesses of companies,” she said on RTL and ntv. “And I don’t really understand why the chancellor and the FDP are having such a hard time deciding on an industrial electricity price.”
I have been working in the news industry for over 6 years, first as a reporter and now as an editor. I have covered politics extensively, and my work has appeared in major newspapers and online news outlets around the world. In addition to my writing, I also contribute regularly to 24 Hours World.