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How not to get shocked by your next German electricity bill

Ever opened your electricity bill in Germany and wondered why and how you're paying so much? Are you confused by German electricity contracts and their masses of inscrutable text?

How not to get shocked by your next German electricity bill

Dealing with the in and outs of getting connected and paying electricity bills is something many of those moving to Germany end up struggling with. 

To help our readers get a better sense of how electricity contracts in Germany work, The Local spoke with CEO and co-founder of digital renewable provider Ostrom, Matthias Martensen, to answer some of the most common questions asked by The Local Germanys readers.

Can you please explain ‘Nachzahlung’?

“Unfortunately, Germany is still not very digital, so upon registering with an energy provider you need to submit an estimation of your consumption for one year. After one year you will be asked to submit your actual meter reading, so your provider can calculate your final bill.

If you have used more energy than estimated, you will have to pay the extra amount – this is known as Nachzahlung or ‘after payment’. However, if you used less energy than estimated you will receive a refund into your bank account. You should of course receive a statement from your provider, indicating whether you will need to pay, or be refunded.” 

Does a landlord have any right to refuse if you want to change your electricity provider?

“This depends on your rental agreement. If you pay for your energy yourself, you have the freedom to choose your own supplier.

In the vast majority of cases in Germany, outside of a shared apartment, your electricity provider is your choice, and it is important that you compare the offers of providers, so that you pay only what you need.”

What are the major factors that influence my electricity prices?

“Energy prices are driven by two main factors—one is the raw commodity prices for coal, oil and gas, and the other is the weather. When there’s lots of wind and sun, Germany can produce a substantial amount of renewable energy, which is cheaper.

Of course, global events also have an effect on the prices offered by electricity providers, as we have seen over the last couple months.”

Looking for a new electricity provider? Ostrom is a sustainable energy provider with all services provided in English. Find out more

How often can we expect to see changes in our electricity bill prices? How will current events influence how much I pay for electricity?

“At Ostrom we try to minimize price swings as much as possible. As you can imagine, this has been difficult to do in the last few months due to the energy crisis and now Russia’s invasion of Ukraine. Unfortunately, Germany is still quite dependent on conventional power plants, a lot of which use gas and coal that is imported from Russia.

Over the next couple of months, a lot will depend on whether European governments will introduce oil and gas embargoes, as we have seen discussed in the media, or whether Russia will stop exports altogether. Both would mean higher electricity prices across all of Europe.”

What are some ways that I can reduce my electricity bill? 

“There are several ways you can save on energy. The most effective is to create good habits like switching off lights when you aren’t in the room, hanging your clothes to dry instead of using the dryer or turning appliances off instead of leaving them in standby mode.

You can also ensure that your household appliances have a high energy efficiency rating, as shown by the EU energy label. You can also ask to see the Energieausweis, or ‘energy certificate’ for an apartment or building you are looking to rent, to see how energy-efficient the property is at retaining heat, for example. 

Perhaps one of the most effective things people can do to save is provide regular meter readings via the app to the supplier. This means that your tariff can be more accurately calculated. 

Ostrom put together a comprehensive list of tips on how to save energy here: Ostrom‘s Energy Saving Tips.”

Find out more about the German energy provider built for internationals, whose service you can manage from your smartphone

A fixed-price guarantee could end up costing you more than you think.

I see many electricity providers offering a ‘fixed price guarantee” – will I save money with one? 

“Fixed prices automatically mean a tiered-system and you need luck when you sign up. In the current situation for instance this means you are locked into high prices. At Ostrom all customers are on the same price and if prices decrease, we will pass those savings to our customers. The majority of providers don’t like to take risks, and will pass the cost burden onto customers, even if circumstances change and energy becomes cheaper over time.

This is why we don’t offer fixed price guarantees at Ostrom. When prices decrease, so does our tariff. Lowering prices is something we’ve already done this year. With our flexible monthly plan, every customer pays the same price for electricity, and you can adjust your monthly payment at any time.”

In recent months the legislation surrounding contract lock-ins has somewhat changed, but the fact remains that traditional energy suppliers still require you to sign a minimum 12-month contract with them at a fixed price.

Ostrom co-founder, Matthias Martensen, and the Massbach Solarpark in Bavaria.

Not only is Ostrom a German electricity provider that passes savings onto the consumer, it is specifically designed for international workers and students in Germany. A simple tariff applies to all customers, and the more often you submit a meter reading, the more likely you are to save money. 

Furthermore, all Ostrom documentation and contracts are in English and everything can be controlled from the smartphone app, including the submission of meter readings. 

Finally, if sustainability matters to you, Ostrom sources their power from renewable sources, including the Maßbach Solarpark in Bavaria. 

Ostrom is a good choice for those making the move to Germany. As Matthias Martensen told The Local: “We know that electricity contracts in Germany can prove bewildering. Since we’re a young international company ourselves, we have a natural understanding of the needs of a modern, flexible and international clientele. It’s in our DNA.”

Looking for a sustainable energy provider designed for international residents? Find out more about how Ostrom does energy differently, and how you can benefit

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ENERGY

Why electric fan heaters in Germany could make the energy crisis worse

Hundreds of thousands of households in Germany have been stocking up on fan heaters to prepare for winter in the face of rising gas prices. But experts say over usage will worsen the situation.

Why electric fan heaters in Germany could make the energy crisis worse

Why are people buying fan heaters?

The cost of heating a home in Germany with oil or gas has doubled in the past two years, according to a heating index published on Tuesday by the non-profit consulting company Co2online.

Due to the rising costs, people are looking for alternatives to heat their homes. And in the first half of this year alone, 600,000 electricity-powered fan heaters were snapped up in Germany, according to market research firm GfK.

But this way of heating could end up being more expensive for consumers – and lead to higher gas consumption than with gas heating, an analysis by strategy consultancy Oliver Wyman shows.

READ ALSO: German households see record hikes in heating costs 

What happens when there’s overuse of electric heaters?

If fan heaters were to be used by people in large numbers, utilities would have to generate much of the additional electricity in gas-fired power plants, according to the firm. The fan heaters would then exacerbate rather than alleviate the energy supply shortages. At worst, there would even be a threat of local power outages due to grid overload.

READ ALSO: Should I invest in an electric fan heater in Germany this winter?

The main problem is that fan heaters provide heat less efficiently than standard gas heaters, said Jörg Stäglich, head of the European Energy & Natural Resources Practice and global head of utilities at Oliver Wyman.

“Their use is therefore more expensive for households than conventional heating.”

To generate the same heat, he said a fan heater requires twice as much gas via a detour to produce electricity in gas-fired power plants as boilers that burn it directly.

“There’s a vicious circle looming,” Stäglich said. “If we have to use more gas for electricity generation, the amount of gas available in Germany will become even scarcer and the price of gas will rise.”

In a scenario where 30 to 50 percent of the 20 million German households with gas heating relied on fan heaters to keep their homes warm in winter or at least compensate for a lowered room temperature, the demand for electricity would increase by up to 25 percent at peak times, experts calculate.

Experts say that even with rocketing gas prices, the use of electric heaters isn’t justified. 

Although the price of electricity has not risen as dramatically as gas, it has still climbed significantly this year.

“That’s why electric heating is not recommended at all,” said Norbert Endres, energy consultant at the Bavarian consumer centre. 

Stäglich added that using fan heaters was “not economical, climate friendly or sensible”. 

Vocabulary 

Fan heater – (der) Heizlüfter

Gas consumption – (der) Gasverbrauch

Power cut – (der) Stromausfall

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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