Energy Transition

Arguments and Positions

The chemical-pharmaceutical industry supports the political goal of the energy transition (Energiewende) to make energy supplies climate-friendly, reliable and affordable. The industry actively contributes to greenhouse gas cuts. However, it is critical of the cost development in the Energiewende, particularly for electricity: Irrespective of burden-easing measures for highly energy-intensive companies, the chemical industry is currently paying, inter alia, over 1.2 billion euros p.a. in EEG charge (EEG-Umlage). This amount is likely to rise, as the EEG charge should further go up - especially with the decided faster expansion of renewable energies and extra tendering under the "act collectively amending energy legislation" (Energiesammelgesetz).

Compensation for price increase is needed

Moreover, an acceleration of the coal phase-out to 2038 - as recommended by the Commission on Growth, Structural Change and Employment - brings higher electricity exchange prices. This is because of gas power plants now becoming the marginal power plant, instead of less costly coal power. Compensation for this cost increase and reliable supplies are essential for the international competitiveness of energy-intensive industries.

Furthermore, effective impulses are lacking for limiting the costs of the expansion of renewables and for the market integration of renewable energies. Especially grid fees and further charges are rising due to the costs of grid expansion and stabilisation and further blocks of costs such as the capacity reserve and the brown coal reserve, redispatch measures and temporary reductions or shutdowns (Abregelung) of plants for renewables due to grid bottlenecks. This development weakens the competitiveness of energy-intensive companies without any additional benefit for climate protection.

Some provisions of the Energiesammelgesetz adopted in December 2018 (in particular, those on the passing on to third parties of electricity relieved from the EEG charge) cause legal uncertainty. This considerably increases bureaucracy in filing applications for the "special compensation rule" (besondere Ausgleichsregelung). Such conditions hamper innovation.

Electricity consumption will climb

Electricity is going to become ever more important in the future - for example, for the digitalisation and electrification of industrial processes and for electro-mobility. Also, the "decarbonisation" of chemistry gives a stronger role to renewable electricity. However, technol-ogies with lower CO2 emissions can become established only if competitive prices for the required electricity are guaranteed in the long term - while the EEG charge causes an artificial cost increase in electricity consumption. Therefore, burden-easing from the EEG charge is vital for energy-intensive companies.

THE VCI IS CALLING FOR THE FOLLOWING

  • Reduce the costs of the Energiewende to a minimum
    The costs for the expansion of renewables and the appertaining infrastructure must be limited by putting the funding of the EEG charge on a new footing. New laws should not bring further burdens which then necessitate relief measures for energy-intensive plants. The planned CO2 pricing within national emission trading is a negative example for this.
  • Make up for rising electricity prices in a way compliant with state aid legislation
    The extra costs of a faster "coal phase out" could total up to a high double-digit euro amount. Due to competitive pressure, the energy-intensive industry responds sensitively to price increases. Therefore, regarding the expected cost increase in electricity purchasing, the German federal government should negotiate with the EU Commission a compensation that is compliant with state aid legislation.

For questions or suggestions, please feel free to contact us.

Contacts

Jenna Juliane Schulte

E-Mail: j.schulte@vci.de