Construction costs are currently skyrocketing

We all thought that until recently. Then the war came. Who knows what will come next. And even if nothing happens, inflation is still embedded in the supply chain of many products. Producer prices are still significantly ahead of consumer prices. It is also clear that politics still has a lot planned. The spontaneous switch of entire supply chains from pipeline gas to liquefied gas is expensive. Moving away from gas is also costly; there are good reasons why, for example, only a few steel mills work with electricity instead of gas so far. In many cases, it is absolutely unclear how long the practical implementation will even take, e.g., power lines. A few kilometers from our construction site runs a 220 kV line that is to be replaced by a 380 kV line (line project 23 Herbertingen-WT). Currently, they are looking where the route can be built as close as possible to the existing one, where birds breed, etc. Planned commissioning is 2032, so in 10 years (and whether that will work, I dare to doubt). More lines are central if we switch everything to electricity and at the same time generate energy increasingly fluctuating.

Yes, the point is certainly valid. 2 thoughts on that: Producer prices can only be passed on to consumers if there is price-setting power.... I would doubt that for many companies beyond a certain level. But yes, pressure is still in the pipeline. The question is where the pressure releases. In the margins of the companies within the production chains or with the end consumers. On the topic of natural gas/gas. There is no energy source that has higher full costs per kilowatt-hour of electricity than natural gas...

On the topic of natural gas/gas. There is no energy source that has higher full costs per kilowatt hour of electricity than natural gas...

The question is where the pressure is released. In the margins of companies within the production chains or with the end customers.

The pure price consideration falls short, regardless of which specific price we set (I don't want to start that discussion here). When it comes to electricity, it is about aligning generation with demand. That is why there are base load power plants, peak load (plus intermediate stages) with different costs. Gas is not a base load technology but one for peak load. We have practically already phased out nuclear energy, and coal is supposed to be phased out soon. The resulting gap between the highly fluctuating and difficult-to-control wind and solar energy is filled by gas. Filling this gap otherwise would be considerably more expensive.

And it is typically German naivety to reduce gas only to electricity. The chemical industry needs gas and oil as raw materials. If these fail, all other products in the production chain also fail. And in many processes, gas is needed directly as a fuel; the same applies here. Of course, this is often replaceable, but that would be much more expensive.

The distinction between companies and consumers is again typically German ("Paritätische Versicherung"). Ultimately, the consumer always pays. A company is an organization whose goal and raison d'être is to make money. If the margin collapses, sooner or later the operation will be shut down.

Ultimately, the consumer always pays. A company is an organization whose goal and reason for existence is to make money. If the margin collapses, the business will sooner or later be shut down.