Germany’s energy policy: a safe gamble with the loss of industryAndré Schmitt
In recent years, the energy transition in Germany has become an ambitious goal that promises many benefits on paper. But while the government proudly proclaims that more and more renewable energies are being integrated into the power grid, the downside of this development threatens to engulf German industry.
The nuclear phase-out and the promotion of renewable energies are well-intentioned steps to reduce CO2 emissions and to protect the climate, but at first glance, mathematically a total disaster, but who cares? In addition, the possible consequences for the energy-intensive industry were obviously not sufficiently considered during the implementation, if you look at it benevolently. This omission has now proved disastrous for the competitiveness and stability of Germany as an industrial location.
Rising electricity prices due to the energy transition are hitting energy-intensive industry particularly hard. Companies in the steel, chemical and automotive sectors are already facing enormous financial burdens. While policymakers turn a blind eye to this problem, German industry suffers from a competitive disadvantage compared with countries with lower energy costs. The result is a creeping loss of jobs and a dwindling industrial base that once formed the backbone of the German economy.
The policy’s supposed solution lies in subsidies and exemptions for the affected industries. But that is merely a drop in the bucket. Instead of addressing the fundamental structural problems, short-term measures are being taken that are hardly sustainable and ultimately pass on the costs to the taxpayer.
The energy transition in Germany also shows an alarming degree of lack of planning and coordination. The integration of renewables into the grid has not been sufficiently advanced, and the stability of the power grid is on shaky ground. Power outages and bottlenecks are occurring more and more frequently, which can have devastating effects on energy-intensive industries in particular.
The political ignorance of the real challenges facing the industry is worrying. It seems as if the government is closing its eyes to the fact that energy policy and industrial policy must go hand in hand to ensure a successful and sustainable economy in the long term.
It is high time for a critical analysis and a fundamental overhaul of German energy policy. The future of German industry is at stake, and a comprehensive strategy is needed that takes into account both climate protection and industrial competitiveness. Otherwise, Germany will lose not only its industrial strength but also its economic foundation in the coming years. It is time for those responsible to wake up from their slumber and seriously address the looming threat to Germany’s industry and prosperity.