Kurt Bock: Electricity Grid Fees Put Jobs at Risk

11.11.2013 -

BASF chief executive Kurt Bock said German jobs could be lost if the chemicals giant has to start paying electricity grid fees to shift the burden of funding a renewable energy infrastructure to large companies.

"If politicians burden us with such a fee, then there is a danger that production will be transferred somewhere else," Bock told German weekly magazine Der Spiegel. "We need to decide, do we want to secure jobs or do we want a so-called fair burden sharing."

Bock said BASF should remain exempt from the Government's proposal because the company had invested in its own power stations, reducing its use of the electricity grid.

"If you're only driving your car on your own back yard, why should you help pay for the national road network," Bock told the paper.

Without the grid exemption BASF would have additional costs of €400 million ($533.98 million) running its Ludwigshafen headquarters, Bock told the magazine.

"This sort of magnitude means that the competitiveness of the location would be under threat," Bock told the paper. Electricity is already twice as expensive in Germany as it is in the U.S., Bock told the paper.

Since 2011, Germany exempted large chemicals, metals, glass and building materials companies from paying electricity grid fees as a way to help its industry remain competitive despite having to put up with some of the highest power prices in Europe.

The European Commission however expressed concern this exemption could amount to state aid, while a German court ruled there was no legal basis for the special treatment.

Companies that use more than 8 gigawatt hours (GWh) of power for at least 8,000 hours will from next year have to pay 10% of the grid fees. That will rise to 15% for those using 7,500 hours and 20% for 7,000 hours. Currently companies using more than 7,000 hours are completely exempt, benefiting around 200 companies.

Germany's energy policy of exiting nuclear power generation and investing heavily into renewables, which require government subsidies to operate profitably, would cost Germany 150 to €350 billion ($446.42 billion) by 2030, German industry association BDI said last year.