Millions of German households face 50% power price increase without government support

Power prices will rise more than 50 percent for millions of households in Germany at the turn of the year if government plans for a cap on prices are not taken into account, Spiegel Online reports. According to price comparison website Check24, more than 580 electricity providers in the country have announced average base supply price increases of 60.5 percent that will affect about 7.3 million of the country’s 42 million households. Rival portal Verivox, which uses a different data set, says the price increase, which is mainly due to the steep rise in wholesale prices as a result of the war in Ukraine, will average 54 percent. Check24 said a household with a yearly consumption of 5,000 kilowatt-hours (kWh) is currently paying 42.7 cents per kWh, compared to 31.6 cents a year ago. Changing from the base supply to another contract doesn’t help in most cases, as these are even more expensive, the consumer advice centre in the state of North Rhine-Westphalia said, according to the article.

The government plans to cap household electricity prices at 40 cents for 80 percent of the previous year’s consumption from the start of next year. To increase incentives to save energy, additional consumption will be charged according to individual contracts. The government has said it wants to introduce the cap, which will also apply to gas prices, by March 2023, but the measure is meant to take effect retroactively from January. To finance the measure, the government plans to tap into its 200-billion-euro “defence shield” for the energy crisis, and also scoop up power producers’ windfall profits.