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Effective and fast reduction of electricity prices for all consumers

Federal Association of Small and Medium-Sized Businesses promotes new electricity price model of Siempelkamp Foundry - This could be a blueprint for all of Europe

Pressemitteilung | Reading time: min

The Siempelkamp Foundry is leading the way and many other medium-sized companies in Germany are calling on the German government to adjust the electricity market design in the short term in order to effectively curb the high electricity prices. The experts of the German Association of Small and Medium-Sized Enterprises (BVMW) see the model of an electricity price brake developed by the member company Siempelkamp Giesserei as a quick and uncomplicated solution, which they are now specifically presenting to politicians. "The model of an electricity price brake combines the requirements of an immediate reduction of electricity prices for all consumers, the preservation of the incentive for energy savings as well as the impulse for an increased expansion of renewable energies in the best possible way and can be applied not only in Germany but throughout Europe," explains BVMW Chairman Markus Jerger.

Aim of the model: decoupling the electricity price from the gas price

The new electricity price model envisages adapting the existing merit order system for electricity trading by decoupling the electricity price from the gas price. Although only a small amount of electricity is generated in Germany with the help of gas, the expensive raw material is currently causing extreme price increases for electricity. If the prices for expensive gas-generated electricity are capped by government regulations, this dependence will be prevented. According to the model, however, the costs for this cap should not be borne by the state but should be financed through a levy that is borne equally by all electricity consumers. The fixed level of the cap can also create an incentive to save energy and ensure that electricity production from renewable energies remains lucrative. Compared to other proposed solutions, this model can be implemented throughout Europe within a few weeks, is easy to realize legally and lowers the electricity price directly.

Medium-sized companies are demanding a remedy for the high electricity prices NOW

The high electricity prices are becoming more and more of a problem for the entire SME sector. Companies are forced to raise prices, cut back on production or, in the worst case, even reduce staff. "We small and medium-sized enterprises have been waiting for months for a solution to combat this cost spiral from the politicians. We can no longer afford to wait any longer. We are very disappointed that an instrument to combat this inflation and recession-driving situation will possibly only be introduced in 2023", explains Dirk Howe, Managing Director of Siempelkamp Giesserei and member of the Federal Economic Senate of the BVMW. Therefore, the foundry, together with the other member companies of the BVMW, appeals for the immediate introduction of its own electricity price model in order to reduce electricity prices rapidly and sustainably. Several energy and economic experts have already analyzed the new electricity price model and found it to be quick and easy to implement. As a long-term solution, the Siempelkamp Foundry advocates the introduction of an industrial electricity price as a long-term solution: "In order to stop further energy price explosions and to promote stability in the market economy, we need this means," explains Howe and adds: "This is the only way to maintain industrial competitiveness in the long term and to effectively relieve consumers."

Schematic representation of the current and new electricity price model:

Figure 1: Current electricity price model Figure 2: Proposed new electricity price model.

Effects of the new electricity price model

Advantages of an adapted electricity market design

- Significant and rapid relief effect for all electricity customers

- No fundamental change to the existing electricity market model necessary

- Positive impact on forward and OTC contracts

- No use of tax revenues necessary

- Effective location and future protection


1 The proposed import levy will contribute to a drastic and sustainable reduction in the purchase costs for electricity. This will make the purchase of energy more predictable again. Consumers will thus be directly relieved of energy costs and at the same time benefit from the inflation-busting effect. In contrast to the gas levy, which would have created additional burdens, this is a relief levy. 2.

2 The model continues to promote renewable energy suppliers, as the selling price to be achieved with this model will still be far above the production costs for wind, solar or biomass, thus maintaining the savings effect for electricity consumers.

Long detailed discussions on how to effectively skim off excess and windfall profits are avoided. Profits are maintained with the proposed model, but distorting excess profits are effectively limited. The energy wholesalers regulate the additional costs caused by imports themselves and do not pass them on to the consumers.

About Siempelkamp

Siempelkamp is a globally active group of companies with the business units Machine and Plant Engineering, Casting Technology as well as Engineering and Service. Approximately 3,000 employees worldwide ensure that the Siempelkamp Group is among the world leaders with its technologies.

The Siempelkamp Foundry in Krefeld specializes in the production of hand-formed large castings of up to 320 tons made of cast iron with nodular graphite. With a casting volume of 50,000 tons per year and 375 employees, it is one of the largest hand-forming foundries in the world. The comprehensive and customer-oriented service package includes the entire production process from design, calculations, pattern making, molding and casting to mechanical processing, packaging and transport.

About the BVMW association

The medium-sized business. BVMW e.V. is the largest politically independent and cross-sectoral interest association of small and medium-sized enterprises. Within the framework of the SME alliance, the umbrella organization BVMW also politically represents more than 30 associations of SMEs with a total of 900,000 members.

Company Info

Siempelkamp Giesserei GmbH

Siempelkampstr. 45
47803 Krefeld
Germany

Telephone: +49 2151 894-0

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