Page 9 - EurOil Week 07 2023

EurOil POLICY EurOil

Fewer businesses to take advantage

of German energy subsidy plan than

expected

GERMAN FEWER than expected German companies are contracts last year and will need the government’s
likely to make use of the government’s winter cap to pay the difference,” Otto told Reuters.
Businesses complain energy cost relief programme due to declining The ban on dividend payments could deter
that the process is spot prices for gas and electricity and the com- large blue-chip companies from applying,
overly bureaucratic. plicated application process, Reuters reported on although their size may help them lock in com-
February 10. paratively low energy costs. Smaller and medi-
As a part of a EUR200bn relief package um-sized businesses told Reuters that their costs
approved in 2021, the government had allocated were currently under the EUR70 per MWh cap
EUR83bn ($89bn) for energy price caps this set for industrial users.
year, but because the cap only kicks in when spot Responding to the news agency, the economy
prices reach a certain level, many companies ministry said it was hard to project how many
that have already signed high-price contracts companies would benefit from the cap as the
will not benefit from the scheme. Additionally, invitation for applications is still open. The sup-
the application process for the relief programme port programme will continue until April 2024,
is described as “bureaucratic,” with companies meaning that funds not drawn this year could be
having to estimate their annual power con- used to shield companies and households alike
sumption and profits, provide details on how from high energy costs next winter.
the funds would be used, ban bonus payments The scheme provides relief equal to about
to managers and dividends, and retain jobs in 70% of a company’s basic energy consumption
Germany. in 2021, with bills covering the remainder to be
The head of the VEA industrial energy con- paid at market prices. However, Reuters noted
sumers group estimates that only 20% of its 4,500 that some companies were operating at reduced
members will take advantage of the subsidiary. capacity that year because of COVID-19 restric-
“These are firms that signed high-price tions. ™

Week 07 16•February•2023 www. NEWSBASE .com P9