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03 Jan 2022, 13:15
Benjamin Wehrmann

German consumers experience biggest rise ever in gas and power prices in 2021

Clean Energy Wire

German consumers saw the greatest rise in prices ever recorded for electricity, gas and heating oil in 2021, comparison website Verivox has said. The price for gas climbed by almost 47 percent, meaning a household with an annual consumption of 20,000 kilowatt hours (kWh) paid more than 1,700 euros last year, up from about 1,160 in 2020. “The main reason for this gas price hike throughout the year are much higher acquisition costs” on international markets, Verivox said. The comparison website expects that further price rises will occur in 2022 due to higher CO2 prices, which have increased from 25 to 30 euros per tonne, and higher grid fees. “This will force almost all gas suppliers to augment their prices,” Verivox concluded. Prices for heating oil also increased by about 40 percent in 2021, partly due to the recovery from the coronavirus pandemic, and exceeded pre-crisis levels at the end of the year. Prices for electricity increased by more than 18 percent, meaning the average household with a consumption of 4,000 kWh paid 215 euros more last year. “Such a strong price dynamic within one calendar year has never been seen before for electricity,” Verivox said. Even though consumers will have to pay a lower renewables surcharge in 2022, which the government has lowered from 6.5 cents per kWh to 3.7 cents, higher grid frees and wholesale market prices mean household power prices are still going to rise.

Power prices in Germany already are among the highest in the world, even though the country ranges in the European mid-field if prices are seen as a fraction of disposable income. Irrespective of the effects of the Europe-wide price hike in gas prices, the cost distribution of climate action due to higher CO2 prices and other emissions reduction measures have led to intensifying debates in the country about the conditions for a “just transition” towards climate neutrality.

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