June 17, 2020 / 8:49 AM / a month ago

German energy sector seeks lower duties to support $360 billion of investment

FRANKFURT (Reuters) - Germany’s stimulus package could trigger 320 billion euros ($361 billion) of investment in power generation, grids, electric charging and hydrogen by 2030 if there are accompanying cuts to tax and other duties, an energy lobby group said on Wednesday.

A study by consultancy EY on behalf of German utility companies association BDEW said the potential investments could create and maintain about 271,000 jobs in energy and related industries.

These include machine building, metals, electronics and green gas production from organic crops and green hydrogren, said BDEW, which represents 1,900 companies in power, gas, heat and water provision in Europe’s biggest economy.

“The study shows the scope of the contribution that we, as an industry, can offer,” said BDEW managing director Kerstin Andreae. “We are the sector that drives decarbonisation and energy transformation.”

The association said its members had performed well during the coronavirus pandemic, with no insolvencies in sight.

However, for the government’s recovery measures to work, taxes and surcharges on electricity needed to be lowered to help retail customers and industries that depend on cheaper power as a raw material, the association said.

The government is targeting a 65% share of green power in Germany’s energy mix by 2030 to meet climate goals.

The EEG surcharge, an expensive levy on electricity bills to support producers of renewable power, should be capped at 5 cents per kilowatt hour (kWh) for now and scrapped in the long run, the BDEW said.

It also said that the eco-tax on power consumption of 2.05 cents/kWh should be reduced to the EU minimum of 0.05 cents from next year.

To offset the resulting budget shortfalls, the government should widen and intensify mandatory pricing of carbon emissions for sectors such as heat and transport, the BDEW added.

Reporting by Vera Eckert; Editing by Thomas Seythal and David Goodman

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