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ENERGY

COMPARE: German electricity prices among highest in the world

Electricity prices in Germany are among the most expensive in the world, a new analysis shows.

A man places a plug into the wall.
Electricity prices are surging in Germany. Photo: picture alliance/dpa | Sina Schuldt

An international comparison has found that German consumers are spending a huge amount of money on electricity compared to other countries.

The analysis of 133 countries, compiled by comparison portal Verivox using data from the energy service Global Petrol Prices and adjusted for purchasing power, found that Germany ranked in the top 15 of highest electricity costs worldwide.

Overall, Germany was in 15th place in the international ranking, according to German news site Spiegel. Most countries with higher electricity prices were crisis-hit developing countries such as Rwanda, Sierra Leone and Burkina Faso.

According to Verivox, the only EU countries where electricity prices were even higher than Germany were the Czech Republic (13th) and Romania (14th).

READ ALSO: How households in Germany can tackle rising energy costs

The table below put together by Spiegel shows the cost per kilowatt hour of electricity in dollar-cent

Among G20 countries, Germany has by far the most expensive electricity. In the next G20 countries on the list - Italy (33rd) and the UK (44th) - electricity prices are about 10 and 12.5 cents cheaper respectively, adjusted for purchasing power.

In many other countries with a high standard of living, electricity is at least 50 percent cheaper than in Germany. These include Canada, Norway, the USA, Switzerland, Finland, Sweden and the Netherlands.

The data from Global Petrol Prices is from the second quarter of this year. What's more, the current price surge in Germany has not yet been taken into account in the calculations.

The average electricity prices in the different countries were calculated on the basis of tariffs of selected suppliers and data from state authorities.

The country comparison is adjusted for purchasing power. That means it takes into account that in a country like Germany, where the per capita economic output is around 45,733 Dollars, it is significantly easier to spend more money on electricity than in Kenya, for example, where per capita GDP is only around 2,039 Dollars.

Why are electricity prices so high in Germany?

In October 2021, German consumers paid on average of 34.79 cents per kilowatt hour of electricity, according to Verivox.

It's the fourth month in a row that costs have risen to a record level. And it forms part of a wider trend. Within the past 12 months, electricity has become more expensive for consumers by an average of 20.9 percent.

READ ALSO: Why German electricity bills are hitting record highs

Since the year 2000, household electricity bills have on average doubled in price.

A three-person household in Germany now pays an average of €93 a month on their electricity bill, up from €41 twenty years ago.

Statistik: Durchschnittliche Stromrechnung eines 3-Personen-Haushaltes in Deutschland in den Jahren 1998 bis 2021 (in Euro pro Monat) | Statista
Average electricity bill for a 3-person household (1998-2021). Mehr Statistiken finden Sie bei Statista

READ MORE: German consumers ‘pay the highest electricity prices in Europe’

Experts say the rise in electricity prices over the past 20 years in Germany is mainly due to increasing taxes, levies and surcharges.

One of the main factors is Germany’s public investment in renewable energy sources, which has been financed through a tariff called the EEG system. 

The system promises fixed prices to wind and solar providers to try and stimulate growth in the sector. But it has always been controversial because industries have been exempt from paying it, meaning that private households have to fork out for it. 

The German government announced last month that it will lower the levy from 2022 to help ease the burden on households. 

But it may have little impact on energy bills due to factors like rising energy prices and increasing grid fees. 

On the wholesale exchange, electricity has become about 140 percent more expensive since the beginning of the year. 

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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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