European Commissioner for Energy Kadri Simson (Center) believes that Estonia, like Germany, could provide financial support its energy-intensive industries. The European Commission however, does not allow companies to receive price reductions directly.
The parliamentary group of Germany's Social Democrats (SPD) has proposed a cap of €50 per megawatt-hour (MWh) on electricity prices for industry. European Commissioner for Energy Kadri Simson (Center) Simson is set to meet with German state leaders this week.
The European Commission has come up with a number of proposals, which would allow large energy consumers to buy electricity at more predictable prices in the future, Simson said.
"For example, new renewable energy projects could benefit from a fixed-price agreement that provides a predictable price corridor for new generation capacity for years, or even decades to come. Many energy-intensive companies have opted for long-term power sales contracts, which also give them the knowledge regarding what their electricity prices will be," said Simson.
If Germany is planning to design a special scheme for its industry, Simson said that would also be possible, provided the European Commission gives state aid approval.
"In recent years, the Commission has granted various state aid authorizations to ensure that European industry stays in Europe and does not leave for countries where cheap energy sources are available wholesale. The latest of these was granted to German industry a month ago, in early August, to compensate for the additional costs of Germany's own emissions trading scheme, on top of which the German state is able to support energy-intensive companies with €6.5 billion until the end of the decade," said Simson.
The Estonian government has said that the state will not provide compensation to help cover energy costs this winter. According to Simson, the Estonian government would also be able to support its consumers if necessary, however, the Commission does not recommend it do so directly. It also has to work in parallel to help the country's industry make the switch from fossil fuels to renewable energy.
"This is one of the state aid conditions imposed by the Commission on the German government," Simson said.
The commissioner added that the decision on state aid taken in August does not allow companies to receive rebates directly. They are instead first required to pay emission taxes, with the costs offset at a later point in time.
Editor: Michael Cole