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German households could see ‘four-digit’ rise in energy costs this winter

People in Germany could see energy prices go up by more than €1,000 this winter, Economics Minister Robert Habeck has claimed.

Houses in Leipzig in winter
Houses in Leipzig in Winter. Photo: picture alliance/dpa | Jan Woitas

In an interview on ZDF’s Markus Lanz, the Green Party politician warned households that the cost calculations from their energy providers for next year would likely be several times higher than they were in previous years. 

“We have been able to observe the prices on the energy markets,” Habeck said. “These suggest price increases in the four-digit range – which can sometimes be a month’s income for a family – and it is no longer possible to avoid these price increases. What naturally arises as a political question is whether we have to leave the people alone with this.”

Calling on people to start saving energy where they could, Habeck warned that even greater cost increases could sharpen the social divide.

“I think that’s a political assignment,” he said. “We can’t allow the energy costs to divide the country even more.”

READ ALSO: Germany prepares energy bailout law as gas prices soar

Just one year ago, the cost of a megawatt hour of gas was around €20. This has since risen to around €140 per megawatt hour, leading to fears that bills could be as much as eight times higher than before.

However, Habeck said that bills would be based on yearly averages rather than the most recent prices, meaning the costs wouldn’t be as high as some fear.

“It’s won’t be as terrible as that,” he said. “At least, we hope it won’t.” 

He said both businesses and consumers needed to start changing their behaviour in light of the limited gas supplies, for example by loosening rules that require bakeries to offer the same range of goods both in the morning and in the evening. 

“If Germany has the problem that it has to buy a rye roll in the evening because there are no more oat rolls, these are simply luxury problems that we can throw overboard,” he said. “Maybe it will do everyone good to eat the rolls that are still there.”

Habeck rejects price caps

Just hours before appearing on Markus Lanz, Habeck spoke out against the introduction of price caps on energy. 

Speaking at the International Trade Fair in Munich on Tuesday, he told the audience that a reduction in energy prices would send the wrong signal to consumers. 

“A cap on prices would be a signal in the case of a scarce commodity: energy is not valuable, take what you want,” he said.

Amid fears that Russia could retaliate to sanctions by turning off the gas taps, the Economics Ministry has poured millions of euros into a campaign to encourage people to start saving energy where possible.

Habeck has also set legal requirements for the gas storage facilities to be full by winter. This would ensure that Germany has enough in reserve to see it through the three coldest months of the year. 

Robert Habeck International Trade Fair

Economics Minister Robert Habeck speaks at the International Trade Fair in Munich on Wednesday, July 6th. Photo: picture alliance/dpa | Sven Hoppe

“We are not just passive,” Habeck told ZDF. “We don’t have to stand by in amazement at what’s happening.”

However, the federal government has come under criticism from Bavarian state premier Markus Söder for not doing enough to check whether energy supplies would be sufficient in an emergency.

In a letter sent to Habeck and obtained by DPA, Söder complained that no stress test had been carried out in Bavaria to see if lower gas levels could sufficiently power homes and businesses in the state.

READ ALSO: ‘Scarce commodity’: Germany raises gas alert level as Russia reduces supplies

“Overall, we have too little information in Germany about what is really happening now,” Söder told Bavarian broadcaster BR24. “When is gas coming? What is the current status of the gas supply? And what contingency plans prevail then if the gas doesn’t come?”

Pointing to the example of Italy, he said other countries had already secured their gas supply.

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POLITICS

Civil servants ‘getting burnout’ over energy crisis, says German minister

Public sector workers trying to tackle Germany's ongoing energy crisis are suffering from illness and burnout, Economics Minister Robert Habeck has said.

Civil servants 'getting burnout' over energy crisis, says German minister

The Russian invasion of Ukraine has unleashed economic turmoil in Europe, placing Germany’s new coalition government under pressure to firefight multiple crises.

Perhaps the largest of these is the energy crisis, which has prompted fears of gas shortages in the winter months and seen prices for fossil fuels soar for both households and businesses.

According to Economics and Climate Minister Robert Habeck, the staff at his ministry – who are charged with tackling the energy crisis – are struggling to cope with the extraordinary pressure that they have been under in recent months. 

“People, at some point they have to sleep and eat too,” the Green politician said at a congress of the Federation of German Industries (BDI) in Berlin. “It’s not bullshit I’m talking now: people get sick. They have burnout, they get tinnitus. They can’t take it anymore.”

READ ALSO:

In the last nine months alone, the Economics Ministry has produced 20 laws and 28 ordinances, Habeck revealed. He said this was likely more than the ministry produced over the entirety of the previous four-year legislature. 

Highlighting the strain that his staff were under, Habeck explained that it was always the same people in charge in drafting new laws in the battle to secure the energy supply.

To say that the Tourism Ministry could help restructure the electricity market would be like “telling the artist who made the sculptures that he can be the president of the Federation of German Industries,” the Green politician added. 

Batting off criticism that the ministry had occasionally been slow to act, Habeck said: “Of course you could say, ‘why didn’t you do the regulation a week earlier’. But it’s not because people are sleeping, it’s because there is a limit to their physical capacity.”

Gas levy criticism 

Germany has had to cope with an ever intensifying energy emergency over the past few months, culminating in Russia reducing supplies and then turning off gas deliveries via the Nord Stream 1 pipeline entirely in September. 

Most recently, the government took steps to nationalise its largest gas supplier – Uniper – in a move to prevent the collapse of the country’s energy infrastructure. Uniper has suffered losses of billions of euros this year due to the costs involved in replacing cheap Russian gas supplies at short notice. 

Habeck, who has appeared increasingly world-weary and exhausted in recent months, has faced sharp criticism for a number of decisions made during the crisis. 

Most controversially, his decision to implement a gas levy to bail out major energy companies has been met with consternation from both the opposition and the Greens’ coalition partners, the Social Democrats (SPD). 

On Friday, SPD leader Lars Klingbeil reiterated concerns about the fairness of the gas levy at a time when many are struggling to pay their energy bills.

SPD leader Lars Klingbeil

SPD leader Lars Klingbeil speaks to the press during the ARD Summer Interview in Berlin. Photo: picture alliance/dpa | Fabian Sommer

In a situation where the government is facing multiple decisions in a short space of time, ministers also require the strength to “reconsider and correct their path”, Klingbeil told RND.

“(The gas levy) is about supporting the gas supply infrastructure,” he added. “However, this must be done fairly.”

In spite of the nationalisation of Uniper, Habeck has confirmed that the gas levy – which adds 2.4 cents per kilowatt hour of energy onto gas bills – will still be introduced on October 1st.

However, on Thursday he announced that there would be changes to Energy Security Act to ensure that only companies who needed the bailout would benefit from the levy.

According to the ministry, the changes are set to be passed by the cabinet on September 28th.

READ ALSO: Germany to push ahead with gas levy plans

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