German Economy Minister Proposes Electricity Subsidies to Tackle High Energy Costs

German Economy Minister Robert Habeck has proposed subsidies to help stabilize electricity network fees amid rising energy costs. The measures aim to protect consumers and businesses from financial strain and support the transition to renewable energy. Challenges remain due to coalition instability and legislative hurdles.

German Economy Minister Robert Habeck has introduced a proposal for subsidies to stabilize electricity network fees, as both consumers and businesses struggle with rising energy costs. These costs have significantly impacted production and investments in the country.

Habeck's subsidies are envisioned as a short-term solution for 2025 and could be implemented through a 2024 supplementary budget. Currently, power network usage fees account for around 20% of consumer bills in Germany, and rising energy prices threaten the production and competitiveness of German companies.

With the need for grid improvements to support renewable energy, costs are expected to escalate, potentially reaching several hundred billion euros by 2045. Despite preparatory work being complete, the subsidy proposal encounters uncertain legislative prospects following the collapse of Germany's governing coalition.

(With inputs from agencies.)