Energiewende Reshapes German Industry: Costs, Investments, and Renewable Growth
The Energiewende, Germany's transition to renewable energy, is reshaping the country's industrial landscape. While some energy-intensive firms face challenges, others are investing heavily, and consumers may see reduced electricity costs.
Aldel, a Dutch aluminum firm, recently declared bankruptcy due to its inability to connect to the German grid for cheaper electricity. Meanwhile, shale gas production in Germany is unlikely to lower gas prices for consumers, instead boosting profits for gas companies.
The Energiewende, however, has made German energy-intensive industry more competitive. Large power users, such as BASF, the world's largest chemicals firm, will pay 35 percent less for their electricity next year compared to those in France. BASF has invested 10 billion euros at its headquarters in Germany, while Norsk Hydro announced a 130 million euro investment in a new production line.
Energy makes up only around two percent of total expenses for small and medium-sized enterprises (SMEs) in Germany. Despite this, a proposal to charge energy-intensive firms an extra 1.2 cents per kilowatt-hour has been criticized by BASF's CEO, who claims a 60 million euro annual loss if the firm had to pay the full charge for renewable electricity. French steel subsidiary ArcelorMittal planned to close its plant due to high electricity costs but halted those plans.
In a positive development, ENOVA is set to acquire and develop several wind parks in Germany by 2027 and 2028, including repowering projects in Niedersachsen, Schleswig-Holstein, Brandenburg, and Nordrhein-Westfalen with a total capacity of almost 330 MW, and new projects in Niedersachsen and Nordrhein-Westfalen with around 170 MW.
The Energiewende's impact on German industry is complex. While some firms struggle with costs, others invest heavily, attracted by cheaper electricity. Consumers may also benefit from reduced electricity costs. Meanwhile, renewable energy projects continue to develop, driving Germany's transition to a greener future.
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