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High electricity cost drives German high-tech industry to Asia

February 24, 2021

By Paul Homewood



Siltronic boss Christoph von Plotho blames Germany’s high energy costs for the decision: “The high electricity price makes the location unattractive,” he said in an interview with the Handelsblatt. His company pays “less than half the electricity price” in Singapore.

The main cost driver in Germany is the green energy levy under the Renewable Energy Sources Act (EEG) which has cost energy consumers more than 30 billion euros last year.

Germany’s largest semiconductor producer Infineon told Handelsblatt that insecure power supply was also a major factor in reconsidering industrial production in Germany and Europe.

Chipmakers lament high taxes and levies on electricity in Germany

Several chip and semiconductor manufacturers have criticised high taxes and levies on electricity as a disadvantage for Germany as an industry location in global competition, reports business daily Handelsblatt. “The high electricity price makes the location unattractive,” Christoph von Plotho, head of chip supplier Siltronic, told Handelsblatt. Another main reason were high personnel costs in Germany.

At the same time, a spokesperson of Germany’s largest semiconductor producer Infineon told Handelsblatt that a secure power supply without fluctuations was also a major factor in keeping production in Germany and Europe.

The comments showed that the issue of high power costs extended beyond the traditional industry companies like chemical factories, to high tech sectors, writes Handelsblatt.

The reason for high power prices are taxes and levies on electricity, such as the renewables levy to finance the expansion of wind and solar energy. Many companies are partly or fully exempt from certain levies. In addition, the government has started to use state budget funds, such as revenues from the new CO2 price for transport and heating fuels, to help cap the levy and it plans to further decrease it over coming years.

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  1. Tim Spence permalink
    February 24, 2021 10:14 am

    So the problems were …. Energy costs too high, Personnel costs too high, and to cap it all an unstable energy supply.

    Destruction by Government.

    Abengoa also in big trouble in front of the judge and creditors for 8 Billion €, (again). Too big to fail.

  2. Mack permalink
    February 24, 2021 10:29 am

    Boris take note. Germany has already tried to turn itself into the ‘Saudi Arabia of wind’. Look what happens when you allow the ‘Windy Millers’ of the climate keleptocracy loose on a modern industrialised economy. It ain’t pretty.

    • Mack permalink
      February 24, 2021 10:31 am

      I meant ‘kleptocracy’. Should’ve just said thieves!

  3. JimW permalink
    February 24, 2021 11:23 am

    Germany is committing economic suicide.

    • Ben Vorlich permalink
      February 24, 2021 1:32 pm

      Being followed t the double by the UK, and the USA forming a orderly queue now.

  4. Thomas Carr permalink
    February 24, 2021 11:36 am

    It was only a matter of time. The self inflicted destruction of western economies by the imposition of expensive manufacturing inputs continues. Not even Germany with its greater efficiency can cope.
    More worrying is the economic illiteracy of MPs in many countries and the failure to understand the economic imperialism and political neurosis which guides China’s foreign policy .

  5. bluecat57 permalink
    February 24, 2021 12:20 pm

    Good thing they use clean energy in Asia.

    • February 24, 2021 12:43 pm

      I guess they was the coal and employees shower regularly.

    • It doesn't add up... permalink
      February 24, 2021 1:17 pm

      95% of Singaporean electricity comes from gas fired power stations. The average consumer cost is about 23 cents, or about 12.5p/kWh.

      • bluecat57 permalink
        February 25, 2021 3:06 am

        That was sarcasm. China uses dirty coal. Even more of it since they banned clean coal imports from Australia.
        Hong Kong and Singapore are far ahead of most Asian countries.
        I contend that if government and environmentalists just got out of the frickin’ way and let people produce energy in the way the consumer wants it, utilities would generate the energy that their consumers want to pay for. And if there were competition in the energy production market then “clean” companies could compete with “dirty” companies and I’m betting “clean” companies would win.

    • It doesn't add up... permalink
      February 24, 2021 3:53 pm

      Singapore gets its gas by pipeline from both Malaysia and Indonesia, and has greatly expanded its LNG terminal (now 11mtpa capacity) that gives it access to gas from many different countries. Lots of competition. The downside is that includes China as a fellow importer. The upside is they can take advantage of the spat between China and Australia to offer a market to the latter.

  6. dearieme permalink
    February 24, 2021 1:12 pm

    The bit of Asia mentioned is Singapore, which depends entirely on imports for generation, whereas Germany could still have had nukes but for its bonkers Kaiserin.

    Singapore is presumably a far better run country than Germany, and conceivably less corrupt too.

  7. February 24, 2021 1:26 pm

    The enthusiastic suicide of the West?

  8. February 24, 2021 2:17 pm

    And the irony of my daughter’s online Geography lesson from her school today; singing the praises of Freiburg as an environmentally superb city. 🙂
    Just as well that the Geography GCSE doesn’t have to consider economic issues!

  9. stevejay permalink
    February 28, 2021 8:39 pm

    I was reading recently about how Maurice Strong, when Head of ‘Ontario Hydro’, introduced green energy policies, with disasterous results. That was in 1992.
    It seems western leaders haven’t learnt anything from that and are all going down the same route. If they think it’s a vote winner they’ve got a massive shock to come.

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