The parliamentary group of ruling German social democratic party SPD has proposed a five-year €50/MWh industry power price before taxes and levies, according to a draft position paper seen by Argus.
The so-called "transformation power price" would apply to the full consumption of firms rather than a reference amount and be granted for power-intensive companies and key industrial transformation sectors such as the producers of batteries, wind turbines, solar modules and heat pumps. Initially it would be limited to five years, with the price level re-evaluated after two years and a potential extension examined after four years, if necessary.
The draft states that the country's economic stabilisation fund (WSF) would be used to finance the measure, but finance minister and chairman of coalition party FDP Christian Lindner earlier this year said funds could not be allocated from the WSF.
Alongside the industry power price, the SPD group proposed a contract for difference (CfD) pool for new renewable plants and said it wants to make power purchase agreements (PPAs) more easily accessible and examine to what extent measures such as state default guarantees could support this. Companies' procurement would continue to run through the market, meaning that if sellers secured day-ahead prices above the differential contract price, the buyers would receive the difference, and if the achieved prices were below the CfD price, the buyers would make up the difference. The state would step in only if one of the two sides could not deliver or became insolvent. The CfD pool would be available for households, as well as for energy-intensive industry, according to the paper.
And the paper suggests an "expansion bonus" for firms benefiting from the industry power price to incentivise them to invest in renewables and grid expansion in Germany. Regions can also support their businesses by positioning themselves as "front-runner regions", where faster approval processes would be possible through the designation of "go-to areas" and the availability of personnel. The CfD pool also could be used to accelerate regional expansion by giving residents near wind and solar plants priority access to cheap power from the pool.
The Green-led economic affairs and climate action ministry BMWK earlier this year proposed a €60/MWh industry power price for 80pc of consumption until 2030. But the principle of an industry power price was rejected by the finance ministry, with Lindner arguing that it would be "unfair" and that relying primarily on state aid is "economically unwise", instead pointing to corporate taxation as a "neutral instrument" to improve Germany's competitiveness.
