Germany’s cheap, green energy keeps aluminium sector healthy

Renewables International

Today, I have some old news for you, but it is not widely known. Back in 2013, I reported on Dutch aluminum producer Aldel’s plans to file bankruptcy if it did not get a connection to the German grid (Dutch electricity is more expensive). Shortly thereafter, the firm did indeed file for bankruptcy.

But the story does not end there. In November, the firm announced that a connection to the German grid will be completed this year, and the firm aims to come out of bankruptcy at that time.

In February, Reuters reported that German aluminum producer Trimet took over a struggling competitor in France. The article also points out that a number of countries have struggling aluminum sectors, Germany not being one of them.

In researching this material, I also chanced upon a study (PDF) from April 2012 investigating the closure of an aluminum smelter in the UK, which has seen its aluminum sector dwindle in recent years. The only times Germany is mentioned in the study is in reference to power prices:

The most damaging of all additional energy costs are those that are imposed unilaterally, so that British energy-intensive industries pay costs that their rivals in other countries do not. With the addition of the most recent of these, the carbon price floor, total UK electricity costs in 2013 will be raised by 24 per cent for energy-intensive sectors.   To put this in perspective, German energy-intensive businesses will only be paying 16 per cent extra through government-added costs at the same time.  

And later:

… the mitigation measures the UK gives to energy-intensive companies, such as a 65 per cent rebate on the climate change levy that will rise to 80 per cent from next year, are still small fry compared to the other green costs they face here and the greater discounts other countries offer. Germany for instance provides energy-intensive firms with a rebate of 98.5 per cent of the cost of subsidising renewable energy on electricity bills. This allows the German government to pursue its green agenda but without the risk of overburdening valuable and vulnerable industries. Including all other costs, British companies will be paying 15 per cent more for their electricity compared to Germany in 2013.

Keep in mind that the paper was from April 2012, when the renewable energy surcharge in Germany was around 3.5 cents, compared to 6.2 cents today – meaning that the situation has even worsened since then from the perspective of power-intensive industry in the UK.

It is further evidence that the biggest power consumers in Germany are doing quite well during the Energiewende.

And incidentally, the Dutch had a major blackout today in the Amsterdam area. Though Reuters says a substation failed, we all know that renewables were the main problem. The Dutch have so much solar they can’t even count it.

Source: Renewables International. Reproduced with permission.