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Wacker-Chemie boss Christian Hartel: "Our energy prices are far too high"

2023-04-03T16:08:26.510Z


How environmentally friendly can a chemical company work? Wacker boss Christian Hartel, in an interview about the future of the chemical industry in Germany.


How environmentally friendly can a chemical company work?

Wacker boss Christian Hartel, in an interview about the future of the chemical industry in Germany.

Munich – Christian Hartel (52) has been CEO of Wacker Chemie AG since May 2021.

The group, headquartered in Munich, employs around 16,000 people worldwide and relies on affordable energy for its chemical processes.

A conversation about the crisis year, the opportunities for Bavaria as a location and the question of how green a chemical company can work.

Mr. Hartel, winter is over, we have enough gas, prices are falling.

Was all the fear for nothing?

I do not think so.

The war of aggression in Ukraine gave us a completely new situation, nobody knew how the supply situation would develop.

That's why I think it was absolutely right to fill the gas storage tanks so quickly in order to secure Germany as best as possible.

How was the year 2022 for you as one of the largest energy consumers in Germany?

We consume 0.8 percent of German electricity and 0.5 percent of gas, making us one of the ten largest electricity buyers in the country.

For us as a polysilicon manufacturer, energy is a kind of raw material.

Of course, we clearly felt the high prices.

But we buy our energy strategically over different periods of time - that's why the price peaks in 2022 didn't have such a strong impact on us.

At peak times, electricity cost one euro per kilowatt hour, now it's ten cents.

So will it be easier this year?

Thanks to our purchasing strategy, energy costs will be around the same level as the previous year.

To protect ourselves, we have already bought 80 percent of our requirements for this year.

But: Compared to the international level, our energy prices are still far too high.

This is a great burden for our competitiveness.

The last nuclear power plants will be switched off in three weeks, critics warn that this will tend to increase electricity prices.

Is exiting a good idea right now?

In times when a good is scarce, it naturally helps if more kilowatt hours are generated.

A temporary continued operation would certainly have a positive impact on the price level.

But I wouldn't invest my money in the construction of new nuclear power plants: the electricity generated is simply far too expensive.

Wind and solar energy are by far the cheapest forms of generation, which is why we need to expand these quickly and massively.

A project that the traffic light policy is committed to.

Are you satisfied with the work of the government?

The outbreak of war was a catalyst for energy policy.

With the acceleration laws for the expansion of renewables and the grid infrastructure, we are definitely on the right track.

For me as an entrepreneur, however, politics of all stripes must be measured by whether enough energy is available at affordable prices.

A lot still has to happen for that.

For example fracking in Germany?

The more different forms of energy we have, the better it is for supply and prices.

Even before the crisis, electricity was more expensive than the chemical industry would like.

What speaks for the location Germany?

Our Burghausen site was founded because large amounts of cheap energy were available there through Chiemsee and Alz.

Alexander Wacker wanted to make something out of this more than 100 years ago.

He built the Alz Canal and hydroelectric power station in Burghausen.

Today, this idea is more modern than ever – we still use the power plant.

We have also built up a sophisticated production network there over the years: That means we use by-products from one process as starting material for another.

They continue their founding myth and build a total of 40 wind turbines in Burghausen.

We don't build the wind turbines ourselves, but we support the project by wanting to conclude a power purchase agreement for ten or 20 years.

Why are we doing this?

In order to halve our CO₂ emissions by 2030 as planned, we need to electrify the processes that burn carbon.

Already today, 70 percent of our processes are electric – an absolute top value in the chemical industry.

Currently, however, this is mainly coal-based electricity.

Exactly.

That's why we need a lot more green electricity.

The project in the state forests will be the largest wind farm in Bavaria.

There are thousands of wind turbines in northern Germany.

Are you angry with the state government for delaying construction of the South Link for so long?

Angry is the wrong term.

However, it is true that inexpensive wind power is being expanded rapidly in the north and the electricity has to be brought to the industrial centers in the south.

This is not possible without the routes - and we urgently need them.

Wacker in Burghausen already uses more electricity than the entire city of Munich.

Where will all the green electricity come from that is capable of base load?

The new wind farm alone can cover ten percent of the demand in the entire chemical triangle.

But in the transformation we have to move away from central structures towards decentralized generation and intelligent grids.

That's why we need the lines so that we can get electricity from anywhere: there's always wind somewhere in Europe.

But we will also have to think a lot more about storage.

Batteries, pump storage, hydrogen - there are many unanswered questions.

The key is decentralization: Take an e-car: With its battery storage you can supply a household for a week - and the car is left 23 hours a day, so it can serve as a buffer in the grid.

We'll soon have millions of them on the street.

And we also have to talk about incentives, i.e. flexible tariffs: Then electricity is five times as expensive in the evening as it is at noon when the sun is shining.

As a result, people can refuel cheaply and stabilize the network.

Doesn't the industry have to rethink too?

Because of the old conventional power plants, our systems are designed to run around the clock.

In the case of polysilicon in particular, there is no other way from a purely technical point of view.

However, we are considering whether flexible production could be feasible for new plants.

Hydrogen is a mega topic, but its use is largely unclear.

What about Wacker?

To date, we have been using gray hydrogen from natural gas to produce polysilicon.

In the future, we want to use green hydrogen from electrolysis, i.e. from green electricity.

That would still be too expensive.

What electricity costs do you expect in the coming years?

We have been advocating an industrial electricity price of four cents per kilowatt hour for years.

If we look at the production costs of renewables, this is possible.

If the solar power is produced in Spain, we are even talking about two cents.

Then hydrogen would also calculate in a completely different way.

To do this, however, we must first expand renewables.

Your mission to politics?

Yes.

But I'm less worried about the 1930s: if the expansion of renewables works, we'll automatically reach the desired price level.

But the challenge lies in the next few years, when prices will still be far too high.

Hence our clear demand to politicians: If we in Germany want to continue to be leaders in the chemical industry and many other industries worldwide, we need cheap electricity prices - and we need it now, otherwise we won't be able to achieve the transformation either.

In China, electricity sometimes costs just two cents, which is why industry leader BASF is relocating capacities there.

Do we have to fear the same with Wacker?

The most energy-intensive process at Wacker is polysilicon production.

We currently produce this in Burghausen, in Nünchritz in Saxony and in Tennessee in the USA.

These are highly complex compound systems that also need the right infrastructure.

It makes no sense for us to relocate these locations.

However, when we build new capacities, the question will arise as to where the energy costs are cheap and plannable.

In other fields you are heavily involved in China – how do you deal with the political risks?

We ourselves have been on site for 30 years and have 1600 employees.

Our risk strategy – if you will – is: we produce in China for China.

Why is that so important?

China is by far the largest chemical market in the world.

It is important for a global chemical company to be present in this market.

China dominates the photovoltaic market by a wide margin.

You are an important supplier.

Should we try to relocate the solar industry to Germany?

We already had a solar industry in the 2000s, which was also heavily promoted.

But you have to say: We in Germany have lost focus here, while other countries have recognized the opportunities.

Renewables are the central answer to climate change, so it would be right to establish a competitive solar industry in Germany and Europe again.

However, this will not be possible without state support.

Source: merkur

All news articles on 2023-04-03

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