Energiewende – What is it costing German companies?

Tuesday 3 May 2016


The investments needed between now and 2030 for Germany’s energy transition, Energiewende, are estimated at EUR 200 billion. And German electricity consumers will pay dearly.

Germany will need to invest around EUR 372 billion in its energy supply between now and 2030. This includes EUR 250 billion for electricity production and EUR 115 billion for the grid. About EUR 200 billion will be used to connect to Energiewende. These figures come from BDI, Germany’s equivalent of the Confederation of Swedish Enterprise.

According to Dennis Rendschmidt, acting head of energy and climate issues at BDI, households and industry account for more than two thirds of the cost of the law on renewable energy, the so-called EEG (Erneuerbaren Energien Gesetz). The full cost for EEG is expected to be around EUR 22 billion.

On the other hand, Energiewende is expected to give German companies the opportunity to sell electricity products equivalent to SEK 70 billion a year by 2020 in the so-called “first mover advantage.”

German companies today pay a high price for electricity, 12.58 cents per kWh. But there are exceptions. Of the approximately 45,000 industrial enterprises in Germany, around 2,000 have energy costs exceeding 17 percent of their total costs. They will not be subject to EEG and will pay just 4.58 cents per kWh. (Source: The Association of German Chambers of Commerce and Industry, DIHK). 

DIHK, has around 3.6 million member companies. According to Dr Sebastian Bolay of DIHK, the attitudes to Energiewende vary greatly among different types of companies. Surveys of their member companies show this.

“The medium-sized companies are the ones feeling the pinch. There are exceptions that the biggest ones can take advantage of to avoid the high electricity prices, and the smallest ones don’t consume enough energy to be affected.”

Service companies such as data centres are also affected by the high energy prices. They are not eligible for exceptions because they are not counted as industrial.

“Unfortunately it is easy for them to move out of Sweden,” says Dr Sebastian Bolay.

According to Dennis Rendschmidt, statistics show this energy intensive sector has already started to cut its investments in Germany because of uncertainty about the future energy supply.

Delivery reliability is, of course, an important issue for German companies.

“The large energy companies want a capacity market,” says Dennis Rendschmidt. “But everyone else thinks it’s too expansive.”

Another way for companies to handle the increasing electricity prices is to produce their own energy. According to Dr Sebastian Bolay, 20 percent of companies already have this type of solution in place. But in 2014 a tax was introduced on electricity production and it is holding back investments. 


What can Sweden learn from Germany’s Energiewende? Photo from the Swedish Embassy in Berlin. 

Author: Camilla Koebe