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ENERGY

Minister: 30 percent power cost rise dubious

The Environment Minister dismissed warnings from power giants Vattenfall and RWE on Monday that electricity prices would increase by a third by 2020, as dubious.

Minister: 30 percent power cost rise dubious
Photo: DPA

Head of power company RWE Peter Terium told Monday’s Bild newspaper that electricity prices would rocket because the shift to renewable energy was likely to cost more than anticipated and non-renewable fuels such as coal and gas were becoming more expensive.

This was backed up by head of production for Vattenfall Europe Tuomo Hatakka, who told the Süddeutsche Zeitung newspaper on Monday that prices of electricity could rise by 30 percent by 2020.

Capital expenditure of €150 billion would be necessary over the next decade alone to enable to transition to greener power, he added.

“Switching to renewable energy is a giant experiment,” Terium told Bild, adding that it was “one that will cost a lot of time and money.”

But Environment Minister Peter Altmeier was quick to dismiss the pair’s prognoses as “dubious”, and said that as Germany moved to renewable power, it was a question of how it was organised that would determine whether consumers pay more for energy.

Keeping prices within a “sustainable framework” was one of his aims, the Christian Democrat politician said on Monday.

He added that new predictions cropped up every day, which was not helping to calm the country’s discussion about electricity.

Altmeier added that the rise in electricity costs over recent years had been linked to coal and gas becoming more expensive, something he maintained has nothing to do with switching over to sustainable power.

DAPD/The Local/jcw

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ENERGY

German households to receive relief for gas costs ‘starting in January’

To help German residents with skyrocketing energy costs, the government is planning to provide relief starting in January, according to draft legislation.

German households to receive relief for gas costs 'starting in January'

Through the gas price cap, the so-called Gaspreisbremse, both German residents and companies will receive retrospective relief for their gas costs starting in January 2023, according to the draft. 

Previously the relief payments were set to stretch between March 2023 and spring 2024, with 25,000 larger businesses, as well as almost 2,000 hospitals and schools to receive the help starting in January. 

READ ALSO: How much could households save under Germany’s new price cap?

The German government is reacting to the sharp rise in energy prices with energy price brakes worth billions and wants to soften the blow on both private households and companies. 

Germany will also be divvying out a one-off energy relief payment in December.

READ ALSO: When will people in Germany get their December gas bill payment?

How much will households and businesses receive?

Under the gas price cap, households and small and medium-sized enterprises are to receive a guaranteed gas gross price of 12 cents per kilowatt hour for 80 percent of their current consumption. For the remaining 20 percent of consumption, the contract price is set to apply.

For district heating, the guaranteed gross price is to be capped at 9.5 cents. 

Starting in January, a gas price brake is also planned for industry. These large consumers are to receive a guaranteed price of 7 cents per kilowatt hour net for 70 percent of their previous consumption volume.

The largest part of the energy price brake is to be financed by a “defence umbrella”, or special reserve, totalling up to €200 billion. The government is still taking on new debt in order to finance the energy caps. 

Russia’s war against Ukraine has increasingly aggravated the situation on the energy markets in Germany and Europe in the course of 2022, the draft states. 

In particular, the recent large price increases for natural gas and heat represent a “considerable, in some cases existence-threatening burden for residents and companies in Germany,” it continued. “They are an enormous socio-political and economic challenge.”

Vocabulary

relief – (die) Entlastung

Natural gas – (das) Erdgas

Consumption – (der) Verbrauch

cushion/soften a blow – abfedern

We’re aiming to help our readers improve their German by translating vocabulary from some of our news stories. Did you find this article useful? Let us know.

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