Economic Policy and Infrastructure

The Energiewende in Germany

In-house power production in the automotive industry

In-house power production in the automotive industry

The automotive industry has long produced a large proportion of its electricity in its own power plants. This decentralized in-house production protects resources and supports energy transition. For one thing, resource-saving district heating is used predominantly. For another, the public grids are relieved, as electricity is produced where it is consumed. This means there is no need for additional grid capacity, which has been greatly burdened by the energy transition in any case. 

Lawmakers have nevertheless greatly increased the cost liability of in-house power production in recent years. As of 2014, the Renewable Energy Sources Act (EEG) provides that proportional EEG allocations must be paid for new power plants for in-house production. Following the amendment of the district heating law, industry has in fact received no more subsidies since the start of 2016. Even if this setback has only affected new plants so far, investments in expanding in-house production are already being questioned. If electricity from existing plants should have the EEG allocation applied as well in the future, then plant shutdowns are threatened – with all of the negative consequences for the industrial energy supply and for the energy transition. For operators in certain sectors, such burdens would mean a threat to their existence. 

In 2017, the EU Commission will likely rule on the existing regulations for in-house power production in Germany. It has approved protection for existing facilities, but demands that the regulation be adapted by the end of 2017. The EU Commission thereby expressed disapproval of the exemption of in-house power from the EEG allocation. German industry demands that the burdens for industrial in-house power production not be further increased. The Federal Economics Ministry also determined in a study that burdens on in-house power production could drastically reduce Germany’s competitiveness. A detrimental change would also be legally questionable, as investments that have already been made in in-house power plants should enjoy protection as existing facilities.

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