Energy costs for German households drop nearly one third since peak of energy crisis
Clean Energy Wire
By April, household energy costs in Germany had dropped nearly one third in the six months since the peak of the energy crisis, an analysis by price comparison website Verivox has found. Costs for heating, electricity and fuel fell 29 percent since October 2022. The average annual energy costs for a model household decreased from 7,926 euros to 5,640 euros. Without the government’s ‘price brakes’ for gas and electricity, households would be paying 6,043 euros per year, equalling a 24 percent drop compared to the peak. “Apart from the state’s energy price brakes, price drops on resource markets especially contributed to the reduction,” Verivox energy analyst Thorsten Storck said. However, energy prices remain well above pre-crisis levels, he added. With a decrease of almost 40 percent, heating costs fell the most since the energy crisis’s peak, thanks to lower costs for heating with both oil (-36%) and gas (-41%). Costs for petrol fell slightly by five percent, while diesel was 20 percent cheaper than six months before. Electricity cost 28 percent less, a decrease that was equally made possible by the price brake, without which the reduction would have amounted to only 21 percent.
The energy crisis fuelled by Russia’s war on Ukraine dominated Germany’s political landscape throughout 2022, with many citizens fearing a severe reduction in purchasing power and companies worrying about their competitiveness. The government had responded with several relief packages worth hundreds of billions of euros, which included the so-called energy price brakes that limit consumer costs to a certain level. Not all designated funds were used because wholesale market prices decreased. While the worst scenarios in the energy crisis were largely avoided and prices on energy markets fell comprehensively, the long-term implications of higher energy costs remain a cause for concern. A rigorous expansion of renewable power sources and grid infrastructure across Europe is seen as one of the most important steps to keep energy prices lower in the long run.
