Power shift begins to move German industry

Friday, 18 May 2012

Germany's third largest aluminium producer has filed for bankruptcy as trade groups call for affordable power supply equivalent to the nuclear capacity taken off the grid as a response to the Fukushima accident.

Aluminium product ready for shipping (Image: Voerde)

Voerde Aluminium announced its insolvency on 8 May due to lowering prices for aluminium combined with rising production costs. This was "an indicator of the gradual process of de-industrialization," said Ulrich Grillo, president of Germany's trade body for the metal industry, WirtschaftsVereinigung Metalle (WVM).

"Production of metals, particularly aluminum, is at risk in Germany due to high electricity prices that are no longer internationally competitive," said Grillo.

German users of over 20 GWh per year pay 11.95 euro cents per kWh, compared to 6.9 cents in France, according to energy.eu data for November 2011. Among the 27 EU countries only Cyprus, Italy, Malta and Slovakia have higher prices for heavy users of electricity.

WVM urged the German government to urgently implement measures to protect energy intensive industry from electricity costs and to incentivise metal businesses to reduce carbon dioxide emissions from their production processes. The industry should not suffer, said Grillo, because of "electricity price rises that result clearly from the state support system for renewable energies, and especially photovoltaics."

Subsidies have encouraged power companies and property owners to add about 25 GWe of solar capacity, mainly in the last five years. This produced 2.4% of Germany's power in the 12 months to February, according to statistics from the International Energy Agency (IEA), while the remaining 12 GWe of nuclear capacity gave 15.3%. By far the bulk of German power comes from fossil fuels, some 71%.

Power prices across Europe
Country	Domestic 3.5 GWh/y	Industrial 20 GWh/y
Germany	27.8	11.9
Czech Republic	15.4	10.7
Spain	21.5	10.4
Netherlands	22.2	10.6
UK	16.7	10.1
Finland	15.7	7.6
France	14.7	6.9
Source: energy.eu data for November 2011. Prices in euro cents are the end-user price inclusive of all duties except recoverable taxes

The IEA data also shows German power exports down by 0.9% in the year up to this February, and imports up by 7.7%.

Shortly after the Fukushima accident in March 2011, German leaders ordered closed the eight reactors that began operation in or before 1980. Industry responded by calling for fossil fuels to step in as their replacement. "As renewable energy sources do not provide continuous power... we should use both gas and coal for the job," said Utz Tillmann, spokesman for an energy intensive industry body and chief executive of the European Chemical Industry Council, said in April 2011

Grillo continued that theme this month, and concluded that energy-intensive industry could contribute to the success of the energy transition, but it "needs safe, clean and affordable electricity."

Researched and written
by World Nuclear News