Bloomberg News

Germany to Work With France on Resolving Diverging Power Prices

July 02, 2013

France and Germany need to resolve differences over power prices paid by industry as the two countries battle to keep their factories competitive, according to a German minister.

“It’s a problem that has to be addressed,” Environment Minister Peter Altmaier said at a press conference today in Paris following meetings with his counterpart Delphine Batho. “We will work on a solution.”

French industrial groups have complained in recent months that their competitive edge of affordable electricity compared with rivals in other countries has been whittled away. U.S. companies benefit from cheaper natural gas from shale while Germany grants businesses fiscal breaks on electricity costs.

While France’s biggest industrial power users have long-term supply deals with Electricite de France SA (EDF), operator of the country’s 58 nuclear reactors, some energy-intensive industries in Germany such as steel plants don’t pay subsidies for wind and solar power being rapidly deployed across the country. French factory owners pay for renewables, although the contribution is capped for the biggest power users.

“We both have every interest in protecting industrial jobs in France and Germany,” Altmaier said. “Sometimes there is debate between French and Germany companies. We have to know precisely what are their competitive conditions.”

France and Germany should work towards harmonizing energy laws and better cooperation between renewables companies, the German minister said, citing traditional rivals Alstom SA and Siemens AG. (SIE)

France is working to preserve its system of long-term power supply contracts for industry, Batho said. Electricity costs for French factories are a “priority,” she has said.

The two countries are big power traders. For the first year ever, France was a net importer of power from its neighbor every month in 2012 as German solar output more than doubled and its coal-fired production was competitive thanks to lower prices of U.S. exports freed up by the shale-gas boom, according to the French grid operator Reseau de Transport d’Electricite.

To contact the reporter on this story: Tara Patel in Paris at tpatel2@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net


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