Germany reportedly promises cheap electricity to Intel


We all knew that European solidarity was just a stage behind which the reality of national business took precedence. But in the last few hours, information from the German media has lifted the veil on the means used by the German authorities to ensure that Fab Intel would be established on its territory. At the beginning of the year, we had confirmation that Intel had chosen the Magdeburg site in return for a substantial EU grant (topped up by Germany). But the German media outlet Handelsblatt claims that the support for the establishment of this FAB goes much further, and concerns the price of electricity that would be supplied for the first 10 years of the site’s operation. Of course, this agreement is obviously well “hidden”, as objectively it is rather difficult to defend. In the first place, it amounts to unfair competition, but above all, it contrasts with the rising energy prices facing German citizens.

Intel électricité allemagne
Germany is worried about the competitiveness of its industry in the face of rising electricity prices…Intel not.

How to set up an energy-intensive industry in a Germany under electrical stress?

The German government is aware of the risks of exposing such an agreement, and officially, it doesn’t exist. Factually, Intel would have asked Berlin for state aid when electricity prices exceeded a certain threshold, but Germany replied categorically no. However, some German media have pointed out the existence of a clause that was snatched away after a final push. It allows Intel to ask for help if electricity prices rise too much… It’s a “speech clause” that has been agreed, allowing German politicians to answer the tough questions with maximum creativity.

The media that raised the wolf therefore decided to put the question directly to Udo Philips, German State Secretary at the Federal Ministry of Economics and Climate Action. His answer is a great moment of contortionism, of which politicians have the secret:

“With regard to guaranteeing future electricity prices, it is agreed that the federal government is prepared to enter into discussions with the company to seek solutions and examine support options. “

If electricity prices rise sharply, Intel can again turn to the federal government and ask for additional state aid. Officially, nothing is certain. Intel is currently in talks with several local energy suppliers. The objective: the group wants to agree on purchase guarantees to ensure an average electricity price of ten cents per kilowatt-hour for 20 years. It should also be borne in mind that the aid will enable the major companies in German industry to already have a certain level of price protection to prevent relocation. The Intel Fab, in addition to the issue raised here, would also fall within this framework.

Intel’s future fab in Magdeburg will use the latest technology in high-intensity extreme ultraviolet (EUV) lithography. It’s hard to imagine that Intel didn’t “manage” this issue before making its choice.