Habeck: Hope for an end to the energy crisis

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During a visit to Sweden, Germany's Economics Minister Robert Habeck returns to his favorite topic: the energy transition. But there is headwind from the USA. Jens Thurau reports from Stockholm.

He tired, she full of energy: Economics Minister Robert Habeck and his Swedish colleague Ebba Busch

The German Minister for Economic Affairs and Climate Protection, Robert Habeck, seems a bit tired. 2022 was a tough first year as Vice Chancellor and Minister in the so-called traffic light coalition of SPD, Greens and FDP. The war in Ukraine brought extremely fast rising energy prices  and Germany freed itself from the heavy dependency on Russian oil and gas in record time. Habeck was dealing with this problem day and night, looking for alternatives to Russian supplies in Norway or Qatar, and had floating terminals built for liquid gas. And now, during a short visit to Sweden, he reports how hard this journey was.

Habeck: “Everyone pays a high price”

But Habeck also emphasizes that he was ultimately successful – or hopefully will be successful in the long term. In an interview with DW in Stockholm, Habeck said: “It is indisputable that we all pay a high price as a society. High inflation, high energy prices. And certainly there are also many fears and worries associated with it. But On the plus side, we've managed to do it without dramatic economic slumps, but maybe it's a bit early to say we've averted the energy crisis.”

Only no Russian gas: A floating terminal for liquid gas arrives in Brunsbüttel in Schleswig-Holstein

In Sweden's capital, Habeck is now standing somewhat exhausted next to his Swedish colleague Ebba Busch, who has only been in office for a few months and is bursting with energy. The 35-year-old party leader of the Swedish Christian Democrats explains to Habeck in brilliant English that she took Habeck as an example when designing her ministry. She is also responsible for industry, business and climate protection. And she is also Deputy Prime Minister, just like Habeck is Vice Chancellor in Berlin.

Sweden relies on nuclear power, Germany does not

She has just made it clear that Sweden is also relying on nuclear energy on the way to climate neutrality, unlike Germany. And Habeck is right in the middle of his favorite topic, the German path to the climate future, without coal, without nuclear power, but with lots of wind energy and solar power.

He actually started for that in December 2021, when the new Government in Berlin started work. But at the time, nobody could have guessed that the war would soon push every other topic into the background.

The last three German nuclear power plants are still online – here the Isar 2 nuclear power plant near Landshut in Bavaria

Nevertheless, Habeck is now talking to DW about the German way without coal and nuclear power: “Germany has actually always done very well with it when it had very ambitious plans. The expansion of renewable energies is picking up right now. And for the phases , where there is not enough renewable electricity, we need highly flexible power plants with large capacities. That's why we need hydrogen power plants.” In any case, new nuclear power plants are usually much too expensive.

A huge investment program in the USA< /h2>

So there are now other topics than the aggression policy of Russian President Vladimir Putin – topics that concern both Sweden and Germany. The problem with the unwieldy name Inflation Reduction Act (IRA): The US law provides massive subsidies of over 400 billion US dollars for the domestic economy, especially for climate-friendly future technologies. Some in Europe see this as protection for the US economy. Is it because Europe is falling behind in exactly these technologies? And is there a joint EU response to this?

Electric cars at Volkswagen in Wolfsburg: Join us soon Batteries from Sweden?

It is fitting that Sweden has just taken over the EU Council Presidency for six months. And that Ebba Busch promises her colleague Habeck that an answer to these questions will be the focus of the presidency. Habeck himself advocates tax breaks for European companies as a European reaction – that's roughly what the EU Commission is considering. “Here seems to me to be the outline of a very strong European answer to the IRA.” In principle, new technologies should only be subsidized in exceptional cases, Habeck adds. But since Europe is in danger of falling behind in central areas such as semiconductor or battery technology, a pragmatic decision must be made.

A Swedish battery factory in Germany – maybe

When visiting the battery manufacturer Northvolt, an hour's drive north-west of Stockholm, Habeck finds out what it means when a rough wind blows against the Europeans. Batteries for electric cars are built here on a large scale. Northvolt also wants to build a plant in Germany with 3,000 jobs. Habeck is very happy about that, because when  The location is Heide in Schleswig-Holstein, in the federal state from which the Green politician comes. And the structurally weak region can use every additional job. However, the Swedes are now rethinking their plan – because of the high energy prices in Germany and because of the US subsidy law.

Bureaucracy – danger for the energy transition?

For example, the law contains the provision that electric cars in the USA are only subsidized if they also contain batteries from US production. So no from Heide. Perhaps the start of construction for the plant in Germany will be postponed and Northvolt will instead accelerate the start of construction for a plant in the USA, which is also planned. Habeck explains to DW: “Northvolt decided to invest in Heide last fall. Then the Americans started their package. The company was not unimpressed.” Habeck adds that it has taken many talks with the Swedes since then to bring Germany back into play.

And so the Economics and Climate Minister is faced with new problems, even if the high energy prices are no longer the dominant topic in Germany. The war in Ukraine also continues. No time to rest. No wonder Habeck seems a bit tired.