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Germany's infrastructure woes: Who should foot the bill?

38 0
23.04.2024

The chemical company BASF is one of Germany's industrial powerhouses. Operating worldwide, it has around 230 production sites and almost 112,000 employees. A third of them work at its German headquarters in Ludwigshafen, an hour's drive south of Frankfurt am Main. "It is the largest chemical plant in the world," says CEO Martin Brudermüller.

But it is also a plant in trouble. "In 2023, we made money everywhere else in the world, but in Ludwigshafen, we lost €1.5 billion ($1.6 billion)," the BASF CEO reported at an event organized by the Market Economy Foundation in Berlin in March. Rising energy costs and climate change regulations have been the main reasons for the company's difficulties.

The demand for electricity in manufacturing is expected to increase dramatically, but it is unclear where the energy will come from. "We have to shut down our highly efficient gas-fired power plants in Ludwigshafen," lamented Brudermüller, who must find alternatives. "If I have to, I'll even build wind turbines in the North Sea."

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The company has already invested in a wind farm off the Dutch coast. But in January 2024, German grid operators doubled their prices for the use of the power lines. It now costs more to transmit electricity to Ludwigshafen than it does to produce it in the North Sea.

Power grid operators need the money to expand their energy infrastructure. To date, around 14,000 kilometers (8699 miles) of new high-voltage lines have been planned, with thousands more kilometers to be added in the foreseeable future. But billions in state subsidies are no longer available after the........

© Deutsche Welle


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