Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/265411
Authors: 
von Graevenitz, Kathrine
Rottner, Elisa
Year of Publication: 
2022
Series/Report no.: 
ZEW Discussion Papers No. 22-038
Publisher: 
ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung, Mannheim
Abstract: 
Climate policy often implies increasing energy prices. Due to incomplete regulation across the globe, concerns about their competitiveness and employment effects play an important role in the policy debate. Using micro-data on electricity network charges and the official 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 and therefore exogenous to manufacturing plants, while making up a substantial share of final electricity prices. Our estimates imply a negative own-price elasticity of electricity of -0.4 to -0.6 in the short-run: A one cent increase in average network charges leads to a decrease in electricity procurement of roughly 3 %. There is suggestive evidence that this elasticity of response is decreasing over time, in line with nonlinearly increasing marginal abatement costs. Generally, we do not find significant effects on revenues, investments or capital stocks.
Subjects: 
Network charges
Electricity Use
Firm Performance
Climate Policy
Manufacturing
JEL: 
D22
L60
Q41
Q48
Document Type: 
Working Paper

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