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Germany seeks industrial power price of EUR 50-100/MWh


09 Mar 2023 14:31

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Isaac Bah


09 Mar 2023 14:31

(Montel) Germany will seek electricity prices of EUR 50-100/MWh for industrial consumers to safeguard the country’s competitiveness, economy minister Robert Habeck said on Thursday.

An industrial power price was “urgently needed”, Habeck said upon the presentation of a report on the state of Germany’s energy security a year on from the supply shocks that sent prices hurtling in the wake of Russia’s war on Ukraine.  

Habeck proposed introducing a two-tiered approach anchored to the expansion of low-cost renewable energy. 

Firstly, the government would “significantly expand” possibilities for companies to install solar panels or wind turbines on their premises or in the immediate vicinity for their own use, Habeck said. 

Secondly, the government would simplify arrangements to line up power purchase agreements (PPAs) between companies and the operators of renewable energy installations elsewhere. 

Favourable electricity prices for industry could only proceed in conjunction with renewable energy growth, Habeck said, urging companies to invest in their own “competitive advantage”. 

Offshore wind growth

Habeck noted the cost of renewable energy in Germany varied between roughly EUR 50-100/MWh, depending upon location. 

He flagged some form of support for industry to bridge a period before large volumes of offshore wind were likely to start coming online from 2028. 

The economy ministry has been working on plans to link industrial power prices to the cost of offshore wind, although they are only expected to come to fruition by the end of the decade. 

The benchmark front-year contract for German power hit EUR 1,050/MWh at its peak last year, more than 20 times the average spot prices of the last decade. The contract was last seen trading at EUR 134.50/MWh, which remains high by historical standards.

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