German government makes U-turn: Households may also get cheaper electricity after industry

High electricity prices for households and industry have long been an issue for politicians, not only in Germany. While Germany’s governing coalition recently announced plans to support industry with cheaper electricity, households were not included. Following public pressure, however, it now appears that the plans have changed quickly, and households could also get cheaper electricity.

According to Clean Energy Wire, Germany’s governing coalition is discussing a possible cut in electricity prices for households. It could do so by lowering the electricity tax to the minimum level set under EU rules. According to the news site, this U-turn comes just a few days after the government ruled out this option.

The reason appears to be public dissatisfaction with the planning of Germany’s budget, which was expected to include support for energy-intensive industry, while smaller businesses and households were initially not set to benefit from any relief.

According to the news site, however, the current government has committed to lowering electricity prices for everyone as part of its coalition agreement. The way to cheaper electricity for heavy industry was opened only recently by the EU itself, by easing state aid rules. The measure is intended to help revive industry, support it in competing with the United States and China, and keep it in Europe.

However, cutting electricity prices for German households will not come free: the government is apparently looking for ways to make savings to offset the lower tax revenue. According to the current chancellor, the government had budgeted for almost 6 billion euros in electricity tax revenue, and it will have to keep a close eye on the budget.