Will electricity in Germany be more expensive next year?

Will electricity in Germany be more expensive next year?

When it comes to electricity, there is nowhere else in Europe that is as expensive as Germany. While the majority of the country’s electricity suppliers want prices to remain the same, a few want to increase the price of a kilowatt-hour over the course of the next year.

The price of power

Electricity prices in Germany are the highest in Europe and, unfortunately for consumers, the price is expected to remain high throughout 2021. A recent study by price comparison site Verivox shows that the majority of Germany’s 820 regional electricity suppliers want to keep prices the same at the beginning of next year.

According to the study, 730 German electricity suppliers will keep their prices the same next year, despite the EEG surcharge being capped at 6,5 cents per kilowatt-hour in 2021. This would save a model family, with an annual consumption of 4.000 kilowatt-hours, around 10 euros a year. “Despite a capped EEG surcharge, the majority of electricity providers do not see any scope for lower prices at the moment,” said Thorsten Stock, energy expert at Verivox.

Only 45 electricity suppliers have announced cuts for the coming year, averaging a reduction of 1,8 percent. This will save a model family around 24 euros a year. On the other hand, 42 basic suppliers have announced price increases of 2,4 percent on average, which would burden families with an additional cost of 31 euros a year.

Electricity companies pay less, consumers pay more

While customers in Germany are constantly subjected to higher electricity bills, electricity companies have benefited from lower prices when purchasing electricity themselves. On Leipzig’s power exchange, the procurement price has fallen by more than 20 percent since January 2019. On the other hand, consumer base prices, a fixed price that customers pay regardless of how much electricity they use, have been rising for years. According to Verivox, fixed monthly prices have risen by around 40 percent in the past five years. By contrast, the labour price, the price dependant on consumption, has only risen by about 10 percent.

This obviously sets itself up to be more advantageous to those who use more energy. However, those who consume much less still have to pay the same basic rate, which continues to rise at a much faster rate than the price dependant on consumption.

Single households hit hardest

For a single-person household, one that consumes around 1.500 kilowatt-hours annually, the cost for the basic supply has risen by around 16 euros since January 2019, whereas the price for a multi-person household consuming 6.000 kilowatt-hours has only risen by 12 euros. Over half of the people receiving Hartz IV benefits live in single-households, as do many pensioners.

William Nehra


William Nehra

William studied a masters in Classics at the University of Amsterdam. He is a big fan of Ancient History and football, particularly his beloved Watford FC.

Read more



Leave a comment