By Jeevan Vasagar in Berlin
Germany’s exports would have been €15bn higher last year if its industry
had not paid a premium for electricity compared with international
competitors, according to an analysis published on Thursday.
Despite Germany’s strong export performance in recent years, Europe’s
biggest economy has been dented by the nation’s costly shift to renewable
energy, IHS consultants said in a report.
They found that the energy price differential between Germany and its five
leading trade partners cost the nation’s manufacturing sector €52bn in net
export losses for the six-year period from 2008 to 2013.
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The figure was calculated by linking changes in the net volume of German
manufacturing exports to changes in energy costs, using an economic model
that accounted for other variables such as exchange rates
Almost 60 per cent of the total loss (or €30bn) came in energy-intensive
industries: paper, chemicals and pharmaceuticals, non-metallic mineral
products and basic metals.
Smaller companies were disproportionately affected, the analysis found.
Unlike heavy energy users such as BASF and ThyssenKrupp, small companies
are not eligible for exemptions from the energy bill surcharges that cover
the costs of the move to clean energy.
The report also looked at investment decisions and found that direct
investment abroad had accelerated over time at the expense of domestic
investment. Energy cost was an important driver of this shift, said IHS.
Of the €12.3bn of foreign direct investment by Germany’s chemical industry
between 1995 and 2013, €9.7bn was said to be attributable to “Germany’s
energy price disadvantage”.
BASF, the world’s biggest chemical maker by sales, said this week that it
would invest the majority of its capital expenditure over the next five
years outside Europe, compared with a third of total capex during 2009-13.
Kurt Bock, BASF chief executive, said this week: “In Europe, we have the
most expensive energy and we are not prepared to exploit the energy
resources we have, such as shale gas.”
Reforming the Energiewende sustainable economy policy, to slow the pace of
renewables development while expanding the role of gas, would enable
Germany to reduce costs, said the IHS report.
It estimated that 20bn cubic metres of shale gas production per year was
possible in Germany by 2030 – the equivalent of a quarter of current gas
consumption.
Daniel Yergin, of IHS, said: “We’ve come to the conclusion – and you won’t
know for sure until you drill – that Germany has the potential to have
significant shale gas resources, which would help reduce costs; help make
Germany more competitive.”
The German government has acknowledged the need to reform Germany’s energy
shift. Ministers have outlined proposals to cut the costs of subsidies by
focusing on cheaper means of clean energy generation.
But the ruling coalition opposes fracking. The coalition agreement calls
for a moratorium on unconventional gas generation until there are
sufficient data to show there is no adverse impact on water quality.
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