IHS study on the Energiewende examines consequences for economic strength & industry

Only a competitive Energiewende can drive forward growth and jobs

09. October 2013 | Pressemitteilung

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The study shows that the Energiewende is possible without excessive costs if the right course is set politically. Thus, the study substantiates the VCI’s central demands: the unrestrained expansion of renewable energies needs to be stopped, and exemption rules need to be maintained for energy-intensive industries. VCI President Kley is urging the incoming federal government to use the identified alternatives. He also speaks against „bans of thinking" regarding the energy mix.

VCI's president Karl-Ludwig Kley (2nd from right): The right course in energy politics must be set NOW! © VCI/BILDSCHÖN
VCI's president Karl-Ludwig Kley (2nd from right): The right course in energy politics must be set NOW! © VCI/BILDSCHÖN

Verband der Chemischen Industrie e. V. (VCI, the German chemical industry association) has called for a new course in the German energy policy, in order to preserve the competitiveness of Germany as a land of industry. VCI President Karl-Ludwig Kley presented in Berlin a topical study by the global information company IHS. According to this study, a massive loss in economic strength and negative developments in the labor market are threatening in Germany by 2030 if the expansion of renewable energies progresses without restraint, electricity prices continue to rise and exemptions for energy-intensive companies are given up. The IHS study was financed jointly by several companies and associations, including the VCI.

Kley urged those political parties which are currently finding out about the possibilities of forming a government: “No matter who signs the new coalition agreement – Germany’s industrial competitiveness needs to be preserved. This includes a cost stop in the Energiewende. The burden for the chemical industry from the Renewable Energy Sources Act alone will increase to over 1 billion euros in 2014, even with the existing exemption rules for energy-intensive chemical plants.” But the VCI President also pointed out: “The IHS study shows that the Energiewende is possible without excessive costs. This gives realistic alternatives to the politicians.”

The IHS study “The Challenge to Germany’s Global Competitiveness in a New Energy World” analyzes the economic impacts of two scenarios with different framework conditions in the energy policy: Firstly, in the “high-price scenario” the expansion of renewable energies continues like before and the exemptions for energy-intensive installations are removed. Secondly, in the “competitive energy scenario” the expansion of renewables advances at a more moderate pace and the existing industrial exemptions are maintained. The assumptions also include more changes to the mix of energy sources: natural gas, which causes fewer CO2 emissions than coal in energy generation, is given a more prominent role in electricity production.

The study concludes that affordable energy prices for all and, in particular, maintaining the existing exemptions for energy-intensive industries are key to preserving Germany’s competitiveness. In the conditions of the “competitive energy scenario”, Germany’s gross domestic product (GDP) to 2030 can be 6.2 percent – or 211 billion euros – higher than in the “high-price scenario”. With competitive conditions, IHS anticipates 1.3 million more jobs and also holds that residents could earn 1,590 euros more per year on average.

This growth effect is visible in all core sectors: The German chemical industry can maintain 40,000 more jobs and achieve a plus in sales of 36 billion euros by 2030, because of an additional 1.1 percentage points of annual output growth – as compared with the “high-price scenario”. Also in the downstream sectors like machinery and motor vehicles, growth could be much stronger and lead to more job creation.

Kley addressed the following demands to the incoming federal government – as five central elements of the energy policy: a fundamental reform of the Renewable Energy Sources Act (EEG), suspending the promotion of new plants for renewable energies as an immediate transitional measure until the EEG reform is implemented, a well-functioning project management for coordinating the Energiewende, and more openness toward technologies like the exploitation of local shale gas. Kley: “I am against bans on thinking. In a few decades from now, Germany might be happy to have own gas resources.” Furthermore, it is essential for the Energiewende to have a European orientation. Kley emphasized: “Germany is no island. Obviously, this holds true for the Energiewende too. We need a European solution if we want to combine climate protection and an affordable Energiewende in a way that really makes sense.”

© IHS

Please find volume 1 of the IHS study “The Challenge to Germany’s Global Competitiveness in a New Energy World” (PDF, 20 pages in English), the charts showed during the press conference (only in German, sorry) and the full statement of VCI's president Karl-Ludwig Kley (only in German, sorry) in the download section at the top ot this page. Also available at the same place: a set of photos of the press conference in high resolution.

For all questions regarding the content otf the IHS study please turn to:

The VCI represents the politico-economic interests of some 1,650 German chemical companies and German subsidiaries of foreign businesses. For this purpose, the VCI is in contact with politicians, public authorities, other industries, science and media. The VCI stands for over 90 percent of the chemical industry in Germany. In 2012 the German chemical industry realized sales of more than 186 billion euros and employed ca. 434,000 staff.

HS Inc. (NYSE: IHS; www.ihs.com) is the leading source of information, insight and analytics in critical areas that shape today’s global economic and business landscape. Businesses and governments in more than 165 countries around the globe rely on the comprehensive content, expert independent analysis and flexible delivery methods of IHS to make decisions and develop strategies. IHS has been in business since 1959 and is committed to sustainable, profitable growth. With global headquarters in Denver, Colorado, USA and German offices in Frankfurt, Dusseldorf, and Munich, IHS currently employs approximately 8,000 people in 31 countries around the world. IHS has acquired more than 60 companies in the last decade including companies with world-leading expertise in macroeconomics and energy.

Contact: VCI Press Dept., Phone: +49 69 2556-1496, E-Mail: presse@vci.de

Please note: VCI news about the chemical industry is also available via Twitter: http://twitter.com/chemieverband

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