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High energy prices pose challenges and opportunities in Germany

January 1, 2023
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Why this is important to Wisconsin businesses: Wisconsin companies may be able to help German companies find energy-saving solutions.

Soaring energy prices continue to drive up inflation in Germany even as consumers fear the possibility of insufficient natural gas supplies for the winter.

Consumer prices in January were about 9% higher than a year earlier, according to Germany’s statistics office. The increase is attributed to high prices for energy and food, largely resulting from Russia’s attack on Ukraine.

Energy prices rose 23% and food prices were up 20% over their levels last year.

Prices remain elevated, even though the German government announced what it called a €200 billion ($218 billion USD) “defense shield” to help consumers and companies.

The temporary measure, in effect until 2024, includes a government subsidy covering part of the cost of electricity and natural gas for consumers and for small and midsize companies, as well as a series of measures to help companies directly affected by the Russian invasion or the subsequent sanctions against Russia.

Meanwhile, Germany called for a 20% reduction in natural gas consumption to make it through the winter, according to the Center for Global Energy Policy at Columbia University.

Germany was the largest European customer for natural gas from Russia, and those imports ended in August 2022. Even before the Ukraine invasion, natural gas supplies in storage in Germany were already at a historic low.

The government says it will promote renewable energy, develop liquefied natural gas terminals, and work with countries that could become alternative sources for natural gas.

In exchange, companies will have to make their production processes more energy efficient. That’s where Wisconsin manufacturers may be able to provide assistance. Wisconsin companies can help find solutions for carbon-neutral production, decreased energy use, and energy-saving automation.


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