Increased gas prices and gas price brakes
vbw – Bavarian Industry Association
2023
The German government’s original gas price brake proposal followed a simple rule: industrial consumers with an annual consumption of more than 1.5 million kilowatt hours would receive 70% of their annual consumption for the price of 7ct/kWh – the remainder would be paid for at the respective market price. The gas price brake that was actually adopted at the end of 2022 is much more complex in its design than the original proposal – it includes various caps, different categories of business, and also exceptions.
In a study for the vbw – Bavarian Industry Association, Prognos investigates the impacts of these changes on Bavarian companies.
Firstly, our calculation shows that the restrictions and exemptions introduced for companies – at least in theory – have little effect in the individual sectors. This would only reduce entitlement to financial aid for very few companies.
Such quantitative analysis, however, does not take into consideration the various practical obstacles that may exist to claiming the gas price brake aid. A non-representative survey of ten companies – including smaller and larger companies, as well as companies that are both energy-intensive and less energy-intensive – showed that in practice, for certain companies there were major obstacles standing in the way of them claiming the gas price brake aid. As a result, larger, energy-intensive companies in particular, do not receive support in the amount provided for by law or decide to voluntarily waive aid payments, because the business risk posed by the associated obligations and evidence provision was too great.
The quantitative analysis was conducted on the basis of various statistics. With the help of the cost-structure survey, employees and turnover statistics by company size class, as well as information on the average gas consumption levels of the respective sectors and a forecast of the expected gas price, it was shown to what extent the different business classes are affected by the concrete design of the gas price brake. In the course of the investigations, a total of ten companies were surveyed, including smaller and larger ones and companies that are more or less energy intensive.
The study (vbw website, in German)
Project team: Dr Michael Böhmer, Jan Limbers, Johann Weiß, Eva Willer
Last update: 22.08.2023
Senior Project Manager
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