Energy transition: Germans pay the highest electricity prices in the world

reElectricity prices in the basic rate have risen to a new historical record, according to information from comparative portals Check24 and Verivox. At 33.77 cents per kilowatt hour, electricity at the base rate is more expensive than ever. More than half of the price consists of government-prescribed taxes, levies, and levies.

Compared to January of last year, electricity costs have increased by around four percent, Verivox reports: “A three-person household with an annual consumption of 4,000 kilowatt hours has higher electricity costs, around 50 euros by year”.

At first glance, the rise in consumer prices is surprising. After all, the electricity consumption of the national economy was drastically reduced in the wake of the Crown crisis. The fall in demand had put great pressure on the wholesale price on the European Energy Exchange (EEX).

But this relief has not reached many homes. On the contrary: “When it comes to electricity prices, Germany remains the world leader,” says Thorsten Storck, Verivox’s energy expert.

The aid scheme to promote green electricity producers is partly responsible for this. Under the Renewable Energy Sources Act (EEG), they are entitled to a fixed remuneration for green electricity, regardless of the actual value of kilowatt hours. If the value of electricity in the energy exchange falls, the highest compensation payments must be made to the producers of green electricity. For the consumer, whose demand for electricity tends to increase in the confinement and home office, the cost per kilowatt hour remains the same.

With a green electricity share of around 45 percent, the sums involved are considerable. Last year, grid operators had to pay a record sum of € 30.8 billion to green electricity producers to compensate for falling electricity prices on the stock market. The sum is added to all consumers’ bill as the “EEG tax.” Overall, the cost of the green electricity subsidy increased by an additional 6.4 billion euros over the course of a year, from around 24 billion euros more recently.

Due to the crown-related drop in electricity prices on the exchange, the EEG surcharge would have suddenly risen from 6.75 to around 9.6 cents per kilowatt this year. But the federal government has capped the surcharge to 6.5 cents, also not to make green electricity too unattractive in terms of price for use in transportation. Therefore, what the electricity consumer spends less on the EEG surcharge, he pays more as a tax citizen: a total of eleven billion euros of green electricity subsidies will be paid directly from federal tax revenue for the first time. time this year and next.

Therefore, the EEG surcharge is partly responsible for the current level of electricity prices, but no longer for the recent increase. The amount of the EEG surcharge should also decline further in the coming years, because more and more systems are nearing the end of their 20-year financing period and financing costs for new wind and solar power systems are significantly lower. . Since 2018, green electricity system project planners have had to apply for building licenses in an auction process. Since then, this has drastically reduced the number of new grants under the EEG.

Rather, the new cost factor in consumers’ electricity bills is network charges. Over the course of the energy transition, grid operators must build standby power plants and keep them operational, compensate market participants for line bottlenecks, and erect thousands of kilometers of extra-high voltage lines. Amprion, the West German power grid operator, has just doubled its investment volume over the next ten years to € 24 billion. “The increase in network usage charges and the VAT increase have led to this remarkable burden,” says Lasse Schmid, Managing Director of Energy at Check24: “The minimal reduction in the EEG surcharge cannot compensate for that.”

An analysis by Verivox had already shown last year that Germans pay by far the highest electricity prices in the world. While the average bill was 32 cents per kilowatt hour in Germany, the international average was 12.22 cents. Little has changed in these conditions in recent months.

In other industrialized countries as well, electricity is sometimes significantly cheaper than in Germany, Verivox reports, referring to calculations by the service provider Global Petrol Prices and market data from the World Bank. A kilowatt hour in the US costs only half on average, about 13 cents.

“Even taking into account the different price levels between countries, Germany ranks 16th in the global comparison of electricity prices adjusted for purchasing power and is therefore the most expensive country in the G-20”, says Verivox. “Italy and Turkey are still at a distance.”

The Federal Association for Energy and Water Management of Germany (BDEW) notes that the price comparison only refers to the basic supply rates of suppliers. By switching to a different rate or a different provider, consumers can often save hundreds of euros. “Electricity prices are competitive prices and competition in the electricity market is very intense,” explained a BDEW spokesperson: “According to the Federal Network Agency, an average of 132 electricity providers compete for the favor of consumers in each area of ​​the network “.

“The basic supplier provides energy immediately upon moving or moving to a new apartment,” explained the BDEW spokesperson. Even if, for example, an electricity or gas supplier goes bankrupt, the basic supplier must automatically intervene. “For this reason, utilities must always flexibly purchase power for basic supply without being able to plan exact purchase quantities.” This contributes to higher acquisition costs for the basic supply.