Households need compensation if coal exit pushes up power prices - consumer groups

German consumer advocates are calling for a fair distribution of the energy transition's costs after the next government announced more ambitious climate plans. "If additional costs – for example, higher electricity prices – are incurred when coal is phased out, financial relief must be provided not only to industry, but also to private households," the head of the Federation of German Consumer Organisations, Klaus Müller, told Der Spiegel. Revenues from the CO2 price on heating oil, natural gas and fuel should be returned in full to consumers, such as in the form of a so-called ‘climate cheque’. This would ensure “greater acceptance” among the population, Müller argued. He added that the energy transition could also be an opportunity for citizens, for example if they are able to earn money from their own rooftop solar power. "But to do this, the new government must improve the use of self-generated electricity and remove bureaucratic hurdles to tenant electricity,” he said.

Prices for gas and electricity across Europe have reached record new levels in recent months due to a variety of reasons. Economic recovery in many countries around the world after the coronavirus pandemic has made demand spike, while renewable power output has been low and gas storages lower than usual following last winter’s cold weather. Higher prices in the European emissions trading system ETS have also contributed to higher overall energy costs. The next German government coalition plans to introduce a social compensation mechanism, or ‘climate payment’, to compensate consumers for higher energy costs due to the CO2 price.