Berlin Electricity prices in daily trading have fallen by around two thirds since mid-December. Just 130 euros are currently due on the Leipzig Stock Exchange EEX for one megawatt hour of electricity. Nevertheless, letters with price increases from their suppliers still land in the mailboxes of consumers.
“We didn’t pass on the 1,000 euros per megawatt hour from August in the basic supply. But only about 30 percent,” Eon boss Leonhard Birnbaum defended the price increases on Tuesday in Berlin at the Handelsblatt energy summit.
Customers of the Essen energy supplier only received mail with drastic increases in January. For customers outside of the basic service, the costs will sometimes double from March 1st. From 26.9 cents per kilowatt hour, it sometimes goes up to 50.11 cents.
“All in all, these customers mostly come from a very low price level, which no longer corresponds to the market situation as we have been seeing it for more than a year,” explains an Eon spokesman when asked by Handelsblatt. What was observed on the electricity exchanges last year is now only slowly being reflected in end customer prices.
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At the end of November, many municipal utilities had already announced massive price increases for the new year for the same reason. In Leipzig and Munich, the basic supply tariffs for electricity will increase by almost 150 percent starting this month. A kilowatt hour now costs 52.12 cents in Leipzig and as much as 61.89 cents in Munich.
“We have doubled the gas price and quadrupled the electricity price, so we can’t give the all-clear yet,” said Birnbaum, preparing consumers for continued high prices.
But this applies above all to basic suppliers. According to the comparison portal Verivox, a kilowatt hour of electricity cost 36.8 cents at Grundversoger in October; it is currently 46.6 cents – a full 27 percent more. On the other hand, a kilowatt hour of electricity for new customers cost an average of 56 cents in the same period; it is currently 42.7 cents and thus 24 percent less.
Electricity prices continue to be the focus of the industry.
(Photo: Dietmar Gust, Euroforum)
In principle, it is understandable that consumer prices are rising. After all, one megawatt hour of electricity cost 444 euros in daily trading a month ago. Throughout 2022, energy exchanges jumped from one record to the next.
However, the situation has calmed down for a few weeks. The Federal Network Agency even reported negative wholesale prices for the first 15 days of January. Negative electricity prices occur when there is a surplus of electricity. In other words, when production exceeds consumption. Such a situation arises, for example, with a very high feed-in with inexpensive wind energy. In the meantime, the prices have fallen to 29 euros in some cases, lower than they have been for over a year.
Overall, the price level remains historically high. Before the start of the energy crisis, annual average prices ranged between 35 and 55 euros per megawatt hour.
Gas prices are still significantly more expensive than before the crisis
The development is even clearer for gas. After all, the wholesale price alone has risen by more than 700 percent in the past year. In the meantime, the markets have calmed down again in view of the relatively mild winter. One megawatt hour (MWh) of natural gas currently only costs around 45 euros on the Dutch TTF exchange.
But here, too, the pre-crisis level is a long way off. On average, prices at that time ranged between ten and 25 euros per megawatt hour. They are currently almost four times as high.
“Anyone who has bought expensively must of course also pass on the prices now,” says Ramona Pop, chairwoman of the Federal Association of Consumer Organizations, on the Handelsblatt Energy Summit.
While the prices for new customers in the basic service are rising, other providers have long been able to find cheap tariffs again. So it might be worth switching again. “Nevertheless, that’s not always the best solution,” says Pop, and warns against always pouncing on the cheapest provider: “We saw last year how quickly this can be over.”
“Anyone who has bought expensively must now of course also pass on the prices.”
(Photo: Dietmar Gust, Euroforum)
Pop was alluding to cheap electricity providers like Stromio. At the beginning of the energy crisis at the end of 2021, tens of thousands of customers had already terminated their contracts overnight because, with their very short-term procurement strategy and the horrendous stock market prices, they could no longer afford to deliver energy at the promised prices.
The high prices for electricity and gas meanwhile also weigh heavily on households. That is why the federal government is supporting private customers and companies from March 2023 with the so-called electricity and gas price brake. The regulation stipulates that consumers will soon only have to pay 40 cents per kilowatt hour for electricity and twelve cents per kilowatt hour for natural gas. This applies to 80 percent of average consumption.
The difference between the capped 40 or twelve cents and the actual tariff is reimbursed to the energy supplier by the state. Those who are particularly frugal should even get money back. The regulation will apply retrospectively from January.
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Some providers had massive price increases after the announcement. The surcharges are so dramatic across the board that, according to some experts, this can no longer be justified by the increased procurement costs for electricity and gas. There was even criticism from within the industry. “The Cartel Office can ask at 70 cents a kilowatt hour,” announced the State Secretary in the Federal Ministry of Economics, Patrick Graichen, on Tuesday in Berlin.
The draft law on the gas price brake takes these considerations into account. Paragraph 28 states that gas suppliers are prohibited from raising prices to an extent that does not result from market developments or an increase in procurement costs. The draft law on the electricity price brake contains the relevant regulations in paragraph 39. Nevertheless, consumer advocate Pop emphasized: “There were noticeable movements. And we take a very close look at that.”
More: Skimming off profits and price brakes: This is how the energy market will continue in 2023
First publication: 01/17/2023, 2:06 p.m.