German call to 'undo' energy privatisation amid Berlin vote
- 3 November 2013
- From the section Europe
Is the tide now turning against privatisation? In the 1990s, a wave of sell-offs swept away countless publicly owned enterprises (though privatisation's fans would say that "enterprise" was the wrong word to describe them).
Hard-pressed governments everywhere sold power stations and electricity grids to private companies. If the taxpayer could not afford the huge bills for investment and modernisation, then why not let capitalism bear the burden - and reap the benefits? So ran the argument.
But now the trend is being reversed in Germany. In a referendum in Hamburg a month ago, 51% voted to buy back the energy grid the city sold.
Church groups and environmental campaigners had pushed for the official, city-wide vote - and the voters in Germany's second-biggest city responded with a "yes", albeit by the narrowest of margins.
Now the capital, and Germany's biggest city, may well go the same way. Every lamp-post in Berlin seems to be plastered with posters urging the citizenry to vote for two things:
- For Berlin to set up a public enterprise to trade in electricity from green sources and sell it to residents
- For the city government to open the way for the grid to be taken back into public ownership.
One of the driving forces is a group called Energietisch, or Energy Table - an assortment of activists and different green groups who became unhappy that Vattenfall, the current provider, was not supplying enough electricity from non-coal, non-nuclear power stations.
"We want to found a utility that produces renewable energy in Berlin, and we want the power grid to be brought back under public control," Energietisch says.
One of the ironies of this is that Vattenfall is actually owned by a government - the Swedish government - though it does behave in the market like other, private electricity companies.
Energietisch said it wanted the public authorities to get the grid back from Vattenfall because "the profits from the grid [150m euros, or £130m/$200m, last year] now go to the pockets of a Swedish nuclear and coal firm".
Dr Stefan Taschner of Energietisch told the BBC that privatisation had not worked: "The consumer was promised falling prices, better quality and a more customer-oriented service but none of this was ever delivered."
But there are doubters who argue that owning an electricity grid is not a sure-fire way to print money.
Apart from anyone else, the city authorities are not that keen. Berlin has a debt of 60bn euros (£50bn; $80bn) and the Berlin government says that buying back the grid will only add to that - big-time.
Berlin has already bought back its water supply and the city authorities fear that adding electricity would just be too big a financial undertaking.
The Berlin Chamber of Industry and Commerce (IHK) takes a similar view. Its head, Jan Eder, said: "It's a lot of money that Berlin doesn't have just lying around."
But there has been a sea-change in attitudes towards public ownership in Germany. Part of the reason is that electricity prices have risen steeply to finance the switch of the country from nuclear to solar and wind power.
Even Chancellor Angela Merkel, who ordered the change, called this re-engineering of the economy a "Herculean task".
New wind farms are being built in the North Sea to replace closed nuclear power stations, often in the south of the country. New locations for power stations mean new routes for cables and pylons.
And all that means lots of money - coming from extra on the bills of ordinary consumers.
As news magazine Der Spiegel commented: "Germany's aggressive and reckless expansion of wind and solar power has come with a hefty price tag for consumers, and the costs often fall disproportionately on the poor."
On top of that, rather than solar and wind replacing nuclear, it has more often been coal - and that was not the way it was meant to be.
In this discontented atmosphere of rising prices and unfulfilled hopes, myriad groups across Germany have been planning to retake control of the system.
According to the German association of public utilities, more than 70 new publicly run services have started in the last six years. Public operators have taken over more than 200 projects to supply energy to local people.
It is what the association calls a "re-municipalisation" because, as it put it, "the idea of the state has not lived up to its promise".
The citizens of Berlin will decide whether they agree. A "yes" vote would not bind the city to buy the grid back but it would force it to start preparing the way for that to happen, and it would mean a new publicly owned company offering green energy.
Perhaps significantly, when the wave of privatisations of public utilities swept Germany, two cities resisted: Munich and Frankfurt, the country's two prominent hubs of capitalism.
Were they right to resist a political fashion or just timid? That's what the rest of Germany is now asking.