Germany’s Chancellor Olaf Scholz has emphasized the importance of ramping up renewable power production rather than subsidies as the key to reducing electricity prices for the country’s energy-hungry industry. Scholz’s comments come in response to a plan proposed by Germany’s economy ministry for a subsidized electricity price of 6 cents per kilowatt-hour (kWh) until 2030.
Industrial companies in Germany have been complaining that electricity prices in the country are too high compared to other countries, putting Germany’s heavy industry at a disadvantage to other manufacturing centers such as the United States and China. However, Scholz believes that the solution to this problem lies in boosting power transmission networks and renewable power production.
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“There are regions already today where power production is as cheap as we want it to be so that industrial operations can prevail against global competition without subsidies,” Scholz said during a visit to a geothermal power plant in Kenya.
“We know today already that we will have lower power prices than today, once we reached our goal that renewable energies dominate electricity production in Germany,” he added.
Scholz’s stance is in opposition to the proposal put forward by Germany’s economy ministry, led by Robert Habeck of the Greens, which would cost between 25 billion euros ($28 billion) and 30 billion euros at current market prices. Scholz’s coalition government has pushed back against the subsidy scheme, citing budget constraints.
Scholz previously voiced skepticism about long-term subsidies, saying that they are not beneficial for the economy. Instead, he advocates for a transition to renewable energy sources as a more sustainable solution.
As Germany works towards its goal of renewable energies dominating electricity production, it is crucial that the country prioritizes investments in renewable power production and transmission networks. With a focus on renewable energy, Germany’s energy-hungry industry can remain competitive on the global stage without the need for long-term subsidies.
