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German Chancellor Olaf Scholz has emphasized the importance of increasing renewable energy production in order to lower electricity prices for Germany’s industrial sector, rather than relying on subsidies, as reported by Reuters on May 6. Scholz’s statement was in response to proposals by Germany’s economy ministry, led by Robert Habeck of the Greens, for a subsidized price of EUR0.06 (USD0.07) per kilowatt hour (kWh) until 2030. Habeck estimated that the proposed subsidy plan would cost between EUR25bn and 30bn in total. However, Finance Minister Christian Lindner, leader of the pro-business FDP, swiftly opposed the subsidy scheme, citing a lack of funding.
According to a study by Allianz Trade, German industry is expected to pay approximately 40% more for energy in 2023 than in 2021, prior to the energy crisis triggered by Russia’s invasion of Ukraine. Despite the legislation passed by Berlin worth around EUR100bn to cap electricity and gas prices for households and industry from January 2023, industrial companies still complain of high electricity prices that put them at a disadvantage compared to their counterparts in countries such as the US and China. To address this, Scholz believes that boosting power transmission networks and renewable power production is the best way to lower power prices and achieve climate targets. Germany plans to raise the share of renewables in total power output from 49.6% in 2022 to 80% in 2030, with an aim to reduce 65% of its carbon dioxide emissions by then compared to 1990 levels.
Sources:
https://renewablesnow.com/news/renewables-account-for-496-of-germanys-power-mix-in-2022-810330/
