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Germany: new incentives for the energy transition

Germany intends to allocate new subsidies to help its energy-intensive industry, helping energy-intensive companies to continue on the path of transition without losing competitiveness.

It is assumed that a “bridging electricity price” of six cents per kilowatt hour will be introduced in this decade for a “specifically defined” group of companies in German industry. To benefit from it, companies will have to implement a series of measures in favor of energy efficiency and commit to becoming carbon neutral by 2045. The beneficiary companies would be reimbursed for the difference compared to the average price of electricity on the stock exchange. The incentive will be financed through the resources of the Economic Stabilization Fund and should be applied to 80% of the company’s consumption. Incentives are estimated for around 4 billion a year.

From 2030, the Government plans to implement a “transitional electricity price” which will rely on mechanisms such as Contracts for Difference (CfD) and PPA contracts to purchase low-cost renewables.

“German industry […] is in the process of converting to the processes needed for climate-neutral production worldwide. We need to support it on this path,” said Economy Minister Robert Habeck.

Read also: Germany invests in hydrogen
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