Germany is considering providing industry users with subsidies for offshore wind energy

According to a report in the business newspaper Handelsblatt, the German economy ministry is working on a proposal to subsidize offshore electricity for industry clients through an auction process. The goal of this idea is to protect businesses from growing expenses. In a collaborative report, a group of consulting businesses comprising Consentec, Enervis, Ecologic, and the Fraunhofer Institute for Systems and Innovation Research (ISI) recommended the use of auctions and so-called ‘contracts for difference.’

After that, the government would step in to pay the difference between the winning bids and the price of the power. On the other hand, the adoption of such a system might take some time, and its implementation in law might be possible “according to the findings of the consultation study, “not before 2024 at the earliest.” As a result, it is possible that the first bids will be held at some point in the range of “2024 to 2025.” On the other hand, since the offshore wind turbines have not yet been constructed, they will not begin operating until “The Handelsblatt estimates the year range to be 2029 to 2030.

As a result of the energy crisis, which is being fueled by Russia’s war against Ukraine, prices have skyrocketed for both commercial and private users. The government has established short-term assistance programs for businesses, although these programs are only temporary in nature. One of the most debatable aspects of Germany’s ongoing energy transition and the effects it is having on the country’s economy is the cost of electricity for businesses. The cost of power is frequently cited by business advocacy groups as a primary factor contributing to industries’ declining competitiveness.

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However, the overly general claims that have been made in this discussion have obscured the reality that there is not a single price for the purchase of electricity by industrial consumers, but rather an extraordinarily wide variety of pricing. The amount of power that enterprises require, when they require it, how they source it, and whether or not they compete with rivals in other countries are just some of the numerous elements that influence energy pricing. These prices are determined by a complicated system of taxes and levies.