The Effect of Electricity Network Charges on German Manufacturing Plants

Kathrine Von Graevenitz (ZEW Mannheim)

November 16, 2020, 11:00–12:30


Room Zoom

Environment Economics Seminar


Climate policy often implies increasing electricity costs. Due to incomplete regulation across the globe, concerns about employment effects play an important role in the policy debate. Using micro data on network charges and the official plant census data for Germany we study the impact of rising electricity costs on plant performance in German Manufacturing. Electricity network charges are determined through regulation in Germany. Network charges make up a substantial share of final electricity prices and are largely exogenous to manufacturing plants. We find evidence of negative own-price elasticities for electricity and negative impacts on hours worked suggesting that higher electricity costs may reduce overall production. joint work with Elisa Rottner (also ZEW).