The war in Ukraine has drastically increased electricity costs for consumers and companies.
The Krefeld-based world market leader for hand-mould casting solutions, Siempelkamp Giesserei GmbH, is calling for the immediate introduction of a nationwide industrial electricity price at a low price level in view of ever increasing energy prices.
“For medium-sized industrial companies, the purchase of energy is currently developing into an expensive challenge through no fault of their own. The result is an inflationary spiral, which the customer has to pay first and the consumer in the end. Therefore, there is an urgent need for sustainable regulation in order to relieve the companies financially,” explains Dirk Howe, Managing Director of Siempelkamp Giesserei.
“Such an industrial electricity price was explicitly promised by the parties of the current federal government during last year’s election campaign. Now would be the best opportunity to keep the promise as unbureaucratically as possible. In addition to a fair and sensible distribution of the available energy quantities, an industrial price would be an important instrument to stop further energy price explosions and to promote market economy stability,” he added.
Introduction of an industrial electricity price would have several advantages
The situation of small and medium-sized industry is very tense due to the extreme price jumps for energy, raw materials and delivery costs. The purchase of electricity or materials has become hardly calculable for companies. Siempelkamp Foundry forecasts additional electricity costs in the seven-digit range for this year.
The war in Ukraine has drastically increased electricity costs for consumers and companies. Compared to the previous year, electricity prices have almost tripled. The IHK Koblenz calculated an example in a study published in March. Accordingly, a medium-sized company in the glass industry paid an average of 100 000 euros per month for its energy supply in 2015. Currently, five to six times as much is due for this on average.
Energy-intensive industrial sectors are particularly affected by this price jump. An example of this is the Siempelkamp Giesserei.
“We pass on the higher production prices due to the increased electricity costs to our customers. This works – at least temporarily – but only because we are very well positioned in the market. For smaller companies in the industry this is not so easy,” said Howe.
“We are at the top of long value chains. Our additional costs are passed on within diverse industries and sectors such as the energy, automotive, construction and consumer goods industries and then continue to increase. One-off relief packages for consumers are just a drop in the ocean,” complains Siempelkamp Foundry Managing Director Dr. Georg Geier.
“An industrial electricity price capped by government regulation could eliminate this problem in the long-term and reduce production costs significantly. Siempelkamp Foundry sees this efficient instrument as the best way to permanently maintain industrial competitiveness and to effectively relieve consumers. If green electricity were also primarily used for this industrial electricity, industry in Germany would additionally take a big step towards sustainability and the energy transition,” explains Geier.
“A reliable industrial electricity price is an important driver for the transformation of industry away from fossil fuels to electricity-based processes.”