Industrial electricity price could save companies billions

18.07.2025

Source: E & M powernews

A new calculation by the German Economic Institute (IW) aims to show how much companies could save if an industrial electricity price were introduced.

For many companies, the high price of electricity in Germany is a disadvantage for their location. The German government wants to relieve companies of high electricity costs with an industrial electricity price. However, it is still unclear exactly what form this should take. New calculations by the German Economic Institute (IW) should show how much companies could save.

The EU gave the green light at the end of June: The industrial electricity price may be reduced - based on the exchange electricity price - to up to 5 cents per kilowatt hour, affect a maximum of half of a company's annual consumption and run for three years. The measure is also limited in time: Subsidies may only be granted for a maximum of three years per company and must expire by the end of 2030 at the latest (we reported).

Only companies that have a high demand for electricity for their production and whose industry is also heavily involved in international trade may benefit from the electricity price subsidies. This dual requirement is intended to ensure that only companies that have come under particularly strong pressure due to high energy prices in global competition are supported.

Relief would be highest in 2025

IW calculations currently indicate a relief of four billion euros over three years. According to the IW researchers, this is based on the current future prices on the electricity exchange - prices are expected to fall in the coming years - and the continuation of electricity price compensation in its current form. Companies would therefore save the most money in the current year: companies would pay €1.5 billion less for their electricity supply, with savings of €1.4 billion in 2026. In 2027, the amount will ultimately fall to 1.1 billion euros.

According to the IW, the industrial electricity price is therefore an effective, short-term relief for companies. And the costs for the state are also manageable. However: "The measure is not a long-term perspective for competitive electricity prices, three years are insignificant in the strategic planning of companies," said IW economist Andreas Fischer. "It is important to make the German electricity supply more efficient overall in order to reduce costs in the long term."

In Germany, the chemical and steel industries, for example, are large and energy-intensive sectors that are under pressure due to high energy costs. According to the Federal Statistical Office, the production of energy-intensive industries has fallen almost continuously since the beginning of 2022 and has developed significantly weaker than the industry as a whole. According to the Federal Office, the five industrial sectors with the highest energy consumption employed just under one million people in 2021.

Author: Heidi Roider