Germany has among the highest electricity prices in Europe, but tax relief for manufacturers doesn’t help the digital economy
The German digital association, Bitkom, has called for cheaper electricity for service providers and other non-manufacturing companies such as data centres and network operators.
Bitkom argues that the reduced electricity tax planned for manufacturing firms should be extended to IT and telecoms companies. “The very high electricity costs compared to the rest of Europe means that being located in the country is a disadvantage for many companies in the digital economy,” Bitkom’s President, Dr Ralf Wintergerst, says.
Industrial energy costs
Industrial electricity prices vary greatly within Europe. At the end of 2022, industrial customers in Germany with a power consumption of 5MW, including data centres on that scale, paid an average of 24.6 cents per kWh.
A comparable data centre in France was charged 13.5 cents, 16 cents in Sweden and 18 cents in the Netherlands.
The association claims that electricity costs account for up to 50% of the total operating costs for data centres although they have increased their energy efficiency by a factor of 6 in recent years.
Broadband and mobile
Broadband and mobile also suffer from higher electricity costs in Germany too. Wintergerst continues, “It is incomprehensible that the manufacturing industry should be have tax relief, but not the service-oriented digital economy.
“High electricity costs endanger locations, investments and jobs in the digital economy. Germany must become a cost-competitive location for future technologies such as AI or quantum computing. Reducing the operating costs for data centres and networks strengthens Germany’s digital sovereignty.”
There’s more info about Bitkom’s campaign (in German) here.