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Germany's Last Silicon Producer on the Verge of Closure due to High Electricity Prices

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Wojciech Zylm
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Germany's Last Silicon Producer on the Verge of Closure due to High Electricity Prices

Heinz Schimmelbusch, the CEO of raw materials company AMG, recently expressed that the future of RW Silicium, Germany's last remaining silicon producer, hangs in the balance. The escalating industrial electricity prices have rendered the energy-intensive production process of silicon metal significantly unprofitable. Unless changes occur, RW Silicium might cease operations by March 2024, a development that could have far-reaching implications.

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The Burden of High Electricity Prices

With electricity prices reaching levels deemed detrimental to the industry, RW Silicium's functioning has been severely hampered. The production of silicon, a crucial raw material for the high-tech industry, is notably energy-intensive. Silicon is used extensively in the manufacture of microchips and solar panels. However, the price of silicon has seen a significant drop from February 2023, now trading at approximately 7.7 euros per kilogram, according to Bloomberg. This downward trend has forced RW Silicium to shut down three out of its four electric arc furnaces at its plant in Pocking, near the Austrian border.

The Future of Silicon Production in Germany

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The Federal Constitutional Court has recently overturned the budget plans of the ruling coalition, which included planned price caps and relief measures. This development adds a layer of uncertainty to the future of silicon production in Germany. If RW Silicium were to close, it would not only result in the loss of 120 jobs but also impact its annual production capacity of over 30,000 tons of silicon. This figure represents more than ten percent of Germany's silicon demand. Local economic representatives have voiced concerns about this increasing reliance on raw material imports from countries such as China, which poses security risks.

A Potential Solution on the Horizon?

In an attempt to prevent such outcomes, AMG is contemplating the installation of a combined Vanadium and Lithium-Ion battery storage technology developed by its subsidiary Liva Powermanagement Systems. The adoption of this technology may enable the utilization of excess solar power for silicon production, potentially reducing dependence on subsidized electricity prices. While this development might offer a glimmer of hope, the question remains whether this measure will be enough to save Germany's last remaining silicon producer.

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