Consumers are threatened with higher electricity prices

The government wants to relieve the economy and consumers of high electricity prices. But according to forecasts by an energy transition institute, that could not be enough to absorb the price increases.

Electricity meter for a private household

Dhe consumers in Germany are threatened with a sharp rise in their electricity costs in the coming year. The nationwide average price for one kilowatt hour could soar by 7 percent to 32.2 cents if the expected increase in the green electricity levy is not prevented, the comparison portal Verivox has calculated. A three-person household with an annual consumption of 4000 kilowatt hours would have to reckon with additional costs of 88 euros in this case.

According to a forecast by the Agora Energiewende think tank, the surcharge for the expansion of renewable energies in 2021 could be from 6.8 cents per kilowatt hour to a record high of around due to the significantly lower electricity price on the stock exchange and the collapse in electricity demand due to the Corona crisis 8.6 cents rise. The energy supplier Eon and the IG Bergbau, Chemie und Energie (IG BCE) expect a similar increase, if not counteracted.

“Heavy brake”

Business associations called on the federal government to act. “If the electricity prices continue to rise, that could be a heavy brake on the way out of the crisis,” said the deputy chief executive of the BDI industry association, Holger Lösch, of the German press agency. The general manager of the BDEW energy association, Kerstin Andreae, said it was high time to act to avoid a drastic increase in electricity prices.

Image: FAZ

Relief in electricity prices could also be part of a billion dollar economic stimulus package that the leaders of the black-red coalition want to decide after Whitsun. So far, as part of its climate protection program, the federal government is planning to gradually reduce the EEG surcharge by around 1.5 cents per kilowatt hour from 2021 – in return for the burdens when refueling and heating. From 2021 on, CO2 pricing will start in traffic and buildings.

But even in this case, consumers could not hope for a falling electricity price. According to Verivox calculations, this would still lead to an additional annual burden of 17 euros on the three-person household.

IG-BCE boss Michael Vassiliadis calls for the EEG surcharge as part of the Corona economic stimulus package to be completely abolished and the costs of the energy transition to be financed through the federal budget. “That was never more necessary than today,” said Vassiliadis of the dpa. The cancellation of the surcharge “would have a far more social effect than, say, tax relief”.

The income from the levy is used to offset the difference between the electricity price determined on the exchange and the guaranteed payments to the green electricity producers. Because of the significantly lower stock exchange prices, this gap has recently become considerably larger.

The EEG account, to which the payments from electricity customers and the income from the sale of green electricity on the exchange flow, has emptied significantly. The transmission network operator Amprion, who manages the account together with the three other network operators, therefore had to secure a loan of 500 million euros in order to be able to make the payments.

The amount of electricity generated with renewable energies has continued to rise. According to calculations by the energy company Eon, more than 108 billion kilowatt hours of green electricity have been fed in since the beginning of the year – this corresponds to an increase of 8 percent compared to the same period last year.

Allocations are a big part

In addition to the EEG surcharge, network charges are an important component of the electricity price – this is where the Federation of German Industries (BDI) wants to start. Managing Director Lösch said that a reduction in network charges would benefit most companies and private consumers alike. The coal commission proposed a reduction in network charges amounting to two billion euros per year. Lowering the electricity tax to the European minimum rate – this is also part of the political debate – would primarily benefit private consumers.

Network costs and the EEG surcharge are foreseeable the two biggest drivers of electricity costs, said Lösch. “It is therefore right to start with relief at these two points. Particularly when parts of the EEG are tax-financed, however, it must be ensured that there is no uncertainty under state aid law. “

Corona crisis exacerbates imbalance

The costs for electricity procurement should not continue to rise in an uncontrolled manner: “The companies are already badly hit.” In addition, high prices hampered the greater electrification of industrial processes that is necessary for climate policy, according to Lösch: “Germany has to move down from the top European place in electricity prices.”

BDEW managing director Andreae called for a noticeable reduction in the tax burden, which is particularly high in Germany at more than 50 percent of the electricity price. “This is not only an enormous burden for consumers, but also hinders the competitiveness of the business location and is counterproductive in terms of climate policy.”

This imbalance will be exacerbated by the corona crisis. The agreements on CO2 pricing and the associated relief of the EEG surcharge from the climate protection program would have to be implemented quickly. In addition, it is a matter of permanently lowering the EEG surcharge. The electricity tax must be reduced to the minimum under European law.