Germany extends disputed renewable energy subsidies to industry

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Wind turbines on a wintry field in Dithmarschen, Germany. December 2010. [BlueRidgeKitties/Flickr]

The value of exemptions to green energy charges Germany grants heavy industry will rise to 5.1 billion in 2014 from last year's 4 billion euros, even though the exemptions are subject to an anti-competition probe by the European Union.

Germany's Federal Office of Economics and Export Control announced the 2014 figures on Tuesday. Due to the probe no exemptions will be paid in 2015.

Around 2,000 German heavy energy users such as BASF and ThyssenKrupp have been exempt from a surcharge ordinary consumers have to pay, but face the possibility of having to pay back discounts should the EU rule they were unfair.

The European Union said Germany's industrial discounts on green surcharges might sometimes be justified to keep energy-intensive firms in Europe, but it had concerns that aspects of Germany's law distorted competition.

The European Commission is reassessing green subsidies as technologies such as onshore wind and solar power become more competitive with conventional energy forms (see background).

The Commission has also promised to analyse the impact of energy costs on industry.

Germany is undergoing Europe's deepest energy transformation as it exits nuclear energy. The biggest task facing the new government is a reform of the law on renewable energy.

European Union antitrust chief Almunia is due to visit Berlin next Monday to meet Economy Minister Sigmar Gabriel.

Germany has signalled it would be prepared to restrict the subsidies to an extent, but has made clear it wants to shield its industry from high power costs to help keep it competitive. 

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Comments

Mike Parr's picture

25% of German industry generates power on-site (to varying degrees). A significant amount of this is on-site RES. Companies do not get the EEG for this (since they self-consume). Examples: VW generates its won power (to the extent that it accounts for 1% of German power generation), BMW has the ambition to go 100% green with on-site power. Do these generators have to "pay back their discounts"?

My guess is that the proposals by Siggy (pay 70% of the normal EEG levy) will get watered down somewhat. In any case, German industry is voting with its feet and going down the on-site power route - raising the issue: for that portion of power why should they pay an EEG levy on that