SWM boss angry: "The state caps the price of electricity with our money"

Created: 12/17/2022, 09:00

By: Matthew Schneider

SWM boss Florian Bieberbach: The electricity price cap will cost Stadtwerke München 330 million euros in the coming year.

© Marcus sleep

Numerous customers of Stadtwerke München are angry.

The prices have increased enormously.

In an interview, the SWM boss is now facing criticism.

Munich - Stadtwerke München will more than double its electricity prices in the new year - despite extensive in-house electricity generation capacities.

Many Munich residents have questions.

Florian Bieberbach, head of the Stadtwerke, faces them in an interview with the

.

Mr. Bieberbach, many people are angry: Stadtwerke München has been advertising electricity from green power plants for a long time, but are now raising the prices as if it came from gas.

We also get a lot of letters - and actually have problems explaining how the energy markets - and government interventions - work in reality.

With your power plant park, you generate more green electricity than your customers can consume.

Then why are you doubling your prices?

In today's electricity market, generating electricity and selling it to customers are fundamentally separate businesses.

In addition, according to German law, we are not yet allowed to sell the green electricity from our plants as green electricity to our sales department.

That's why we sell the electricity we generate and buy most of the electricity for our customers on the exchange.

The gas price there determines what the electricity costs – which is why prices on the stock exchange have literally exploded in the past two years.

With which you as a producer could also earn a lot of money in 2021 and 2022.

Why not use the profits?

We have only partially benefited from the high profits because we sell our green electricity generation up to three years in advance in order to finance the plants on a solid basis.

However, we assume that we will still see significant additional revenue this year.

Since December, however, the 90 percent levy by the state has been in effect.

SWM: Prices can be reduced again from April

What do you do with the rest of the money?

We made two decisions: First, we didn't want to report it as profit, we wanted to pass it on to the customers.

But because many wealthy people live in Munich, we have put 20 million into our heat fund, which supports low earners.

So it is not a little that reaches everyone, but a lot for those who need it.

Another ten million have gone into the district heating fund to speed up the switch from gas to district heating.

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But now you're going to lower the prices again from April.

Was the level of suffering really that great?

This is because the government is now not skimming off the additional proceeds from September, but only from December 2022.

With the profits we can lower the prices by a good ten cents again.

How much money is being skimmed off?

We assume that in 2023 alone we will have to hand over around 330 million euros to the federal government to finance the electricity price brake.

SMW boss: "Now that we would have made real money, it will be taken away from us"

So the state finances the electricity price brake with your profits?

Exactly.

From a PR point of view, this is of course a disaster: we have to raise the prices, which the state then caps – with our money.

They invested early, others relied on the big producers.

Seems like it wasn't worth it.

It's bitter because we also had difficult years financially with our investments in renewable energies and now that we've finally made real money, it's being taken away from us.

But from an overall Munich perspective, you also have to see it positively: Whether we would have lowered the prices internally or via the state cap is not important for our customers.

How many facilities do you own?

Here in the region we operate two wind power plants, 45 solar plants, six geothermal plants, 14 hydroelectric power plants and two biomass plants.

In addition, we are involved in various wind farms in Germany and Europe, others belong to us entirely, and there are three large solar systems.

The wind turbines in particular are distributed at favorable locations in Europe, for example in Norway, off Friesland and in the Irish Sea.

In total, we can produce 6.3 terawatt hours of electricity per year.

Stadtwerke München: What's next?

How much do your Munich customers consume?

The whole of Munich consumes almost seven terawatt hours.

Together with our conventional power plants, we generate around twelve terawatt hours.

But because they have an expiration date, and Isar II alone will be discontinued from April, we have already built up green electricity capacities so that there are no gaps.

In 2021 we took a big step with 100 new wind turbines.

What did the expansion cost Munich?

Our requirement was not to burden the customers with the expansion offensive.

So we financed it with loans and existing capital from SWM.

The systems work economically and are self-supporting. This is also reflected in the fact that we are still one of the cheapest electricity suppliers in Germany.

However, we have an offer in which a small group of customers voluntarily pays a surcharge for the expansion of green electricity generation in the region.

Let's go from sales to purchasing: They procure at shorter notice than other providers, so they took the price jumps in the summer with them.

Did you speculate?

We like to secure our power plants in the long term so that they are solidly financed – there were also years when electricity prices were low.

In purchasing, we are actually on the move at shorter notice in order to be able to react to the wholesale market.

If the prices only rise for months, that's bad, of course, because you don't have such good protection.

But we would also be in the pillory if prices were to fall again now and we had to tell our customers: You won't notice that for two years because we have been buying for such a long time.

What's next?

The term of the levy is initially limited to June 30, 2023.

It can be extended until April 30, 2024.

That's why we have to wait.

If we are allowed to keep our profits again, we will definitely be cheaper than other providers.