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ENERGY

German consumers ‘pay the highest electricity prices in Europe’

For the second year in a row, consumers in Germany have paid the most for electricity in a Europe-wide comparison, according to a new report.

German consumers 'pay the highest electricity prices in Europe'
Photo: picture alliance/dpa | Sina Schuldt

After the Bundesrepublik took the Europe-wide lead from Denmark in 2019 for the highest electricity prices, the costs have increased again in 2020, as shown in new figures from the Federal Statistical Office published on Monday.

Prices also rose for larger households with an annual consumption of 3,500 kilowatt hours: They reportedly paid an average of 30.43 cents per kilowatt-hour, up from 29.83 cents a year earlier.

According to the Federal Statistical Office, average electricity prices in Europe fell last year: in the euro area they dropped 0.53 cents to 22.47 cents per kilowatt hour. 

And in the 27 countries of the European Union they went down by 0.51 cents to 21.26 cents.

READ ALSO: Electricity bills in Germany – how to keep your costs down

‘Unacceptably high prices’

“Germany is the ‘European champion’ when it comes to electricity prices. They are unacceptably high and must fall significantly,” Dietmar Bartsch, chairman of the Left Party (Die Linke) in the Bundestag, told the Funke newspapers group.

He called on the electricity tax to be abolished for private households and the “EEG levy” to be fundamentally reformed.

“Electricity and energy must not become a luxury good,” said Bartsch.

The EEG levy, which pays a guaranteed price for renewable energy to producers, is a major component of electricity bills around Germany.

To prevent the levy, part of the country’s Renewable Energy Sources Act (EEG), from rising dramatically, the German government had stabilised it with billions worth of taxpayers’ money for the years 2021 and 2022.

As a result, the levy will amount to 6.5 cents per kilowatt hour in 2021 and six cents in 2022.

First enacted in 2000, and modified several times, the EEG has been credited with rapidly boosted Germany’s production of wind and solar energy.

It’s also helped foster the growth of the hydroelectricity and geothermal sectors, as Germany seeks to meet long-term climate protection goals.

READ ALSO: Is Germany the green leader it’s hyped up to be?

Vocabulary

electricity consumption – (der) Stromverbrauch 

euro area – (der) Euroraum

fundamentally – grundlegend

surcharge – (der) Aufschlag

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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ENERGY

German government announces fresh relief package for high energy costs

With Russia's invasion in Ukraine exacerbating high energy and petrol prices, Germany is set to introduce a second relief package to limit the impact on consumers.

German government announces fresh relief package for high energy costs

The additional package of measures was announced by Economy and Climate Protection Minister Robert Habeck (Greens) on Sunday.

Speaking to DPA, Habeck said the wave of price increases throughout the energy sector were becoming increasingly difficult for households to bear.

“Extremely high heating costs, extremely high electricity prices, and extremely high fuel prices are putting a strain on households, and the lower the income, the more so,” he said. “The German government will therefore launch another relief package.”

The costs of heating and electricity have hit record highs in the past few months due to post-pandemic supply issues. 

This dramatic rise in prices has already prompted the government to introduce a range of measures to ease the burden on households, including abolishing the Renewable Energy Act (EEG) levy earlier than planned, offering grants to low-income households and increasing the commuter allowance. 

READ ALSO: EXPLAINED: What Germany’s relief package against rising prices means for you

But since Russia invaded neighbouring Ukraine on February 24th, the attack has been driving up energy prices further, Habeck explained.

He added that fears of supply shortages and speculation on the market were currently making the situation worse. 

How will the package work?

When defining the new relief measures, the Economics Ministry will use three criteria, Habeck revealed. 

Firstly, the measures must span all areas of the energy market, including heating costs, electricity and mobility. 

Heating is the area where households are under the most pressure. The ministry estimates that the gas bill for an average family in an unrenovated one-family house will rise by about €2,000 this year. 

Secondly, the package should include measures to help save energy, such as reducing car emissions or replacing gas heating systems.

Thirdly, market-based incentives should be used to ensure that people who use less energy also have lower costs. 

“The government will now put together the entire package quickly and constructively in a working process,” said Habeck.

Fuel subsidy

The three-point plan outlined by the Green Party politician are not the only relief proposals being considered by the government.

According to reports in German daily Bild, Finance Minister Christian Lindner (FPD) is allegedly considering introducing a state fuel subsidy for car drivers.

The amount of the subsidy – which hasn’t yet been defined – would be deducted from a driver’s bill when paying at the petrol station. 

The operator of the petrol station would then have to submit the receipts to the tax authorities later in order to claim the money back. 

Since the start of the war in Ukraine, fuel prices have risen dramatically in Germany: diesel has gone up by around 66 cents per litre, while a litre of E10 has gone up by around 45 cents.

READ ALSO: EXPLAINED: The everyday products getting more expensive in Germany

As well as support for consumers, the government is currently working on a credit assistance programme to assist German companies that have been hit hard by the EU sanctions against Russia.

As reported by Bild on Saturday, bridging aid is also being discussed for companies that can no longer manage the sharp rise in raw material prices.

In addition, an extension of the shorter working hours (Kurzarbeit) scheme beyond June 30th is allegedly being examined, as well as a further increase in the commuter allowance.

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