Journal of Energy Markets

Risk.net

The German Energiewende: is the manufacturing sector at risk?

Hubertus Bardt and Hanno Kempermann

ABSTRACT

The abandonment of nuclear power and the new focus on renewable energy sources represent a fundamental change in the structure of Germany's electricity supply. In the wake of this change in energy policy (which is widely referred to as the energy turnaround), prices immediately started to rise and further increases are to be expected in the years ahead. In the case of the manufacturing sector, this cost burden has been mitigated by exempting the energy-intensive sectors that are most affected. However, this causes high levels of uncertainty for large electricity consumers as their current exceptional status may be called into question at some point in the future. Moreover, the price and cost effects of the German energy policy are not only restricted to energy-intensive enterprises. While the metal production industry, parts of the chemical industry and others have to deal with higher price risks, other industries are closely linked to these electricity consumers in complex value chains. Large segments of the manufacturing sector work closely with energy-intensive companies. These dense networks particularly bear fruit in the joint development of innovations, one of German industry's main competitive advantages. This strength of the German economy may turn into a risk if the future of electricity-intensive industries is hampered by rising national energy prices. A potential relocation of energy-intensive companies to other countries would thus also weaken the competitiveness of other areas of German industry. These risks need to be compared with the new market opportunities provided by the energy turnaround. The industry sees such opportunities especially in renewable energies and techniques for improving energy efficiency.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here