German power pricing benefits mills, hurts fabricators: WSM

The power pricing scheme as envisaged by the German government favours big groups, but puts small and medium-sized fabricators at a disadvantage. According to fabricators association WSM, its typical member company next year will have twice the power costs of a steel mill.

The government’s recent package to alleviate manufacturing industries from their electricity costs only supports big energy consumers, WSM states. “For WSM’s 5,000 plus member companies, it is a slap in the face,” says the federation’s managing director, Christian Vietmeyer. “Goliath is profiting, while David is left behind.”

According to calculations by WSM, the reduction of grid fees and taxes will see big groups pay a power price of €0.08.3 ($0.09.1) per kilowatt hour in 2024, whereas the cost for medium-sized steel fabricating companies will be €0.16.3/kwh, Kallanish notes.

This outcome is absurd in so far as “many companies of our industry make components that are relevant for the energy transition, used in wind power plants, electric vehicles and railways,” Vietmeyer points out. With twice the power costs for steel-working companies as opposed to steelmaking mills, “you cannot prepare progress”, he adds. “It is nothing short of ridiculous that policymakers are trying to paint their energy price package as a positive feat.”

The higher costs will keep discouraging companies from producing in Germany and may instead drive them abroad, if they have that option. Comparing international prices, WSM states that power for German domestic producers costs 2.5 times as much as in France, 2.4 times as much as in China, and 3.3 times as much as in the USA. “It is foreseeable that we will lose our competitiveness in the international comparison,” Vietmeyer concludes.

Christian Koehl Germany