Energy poverty is increasing in Germany

Many consumers worry that energy is becoming more and more expensive. Meanwhile, according to a media report, they will have to pay hundreds of millions of euros this year for unused green electricity that has not been fed into the power grid.

Electricity is likely to become even more expensive for many German consumers.

Dhe energy consumers can look back on a turbulent 2018. The low water of the Rhine drove gasoline and diesel prices in the south and west of the republic to record highs. After years of decline, there was a price turnaround for natural gas. In October and November, heating oil customers had to pay higher prices than they had for four years. And numerous gas and electricity suppliers have announced price increases for the next year.

On the other hand, according to a media report, German consumers will have to pay hundreds of millions of euros this year for unused green electricity that has not been fed into the power grid. “Compensation payments from network operators to the renewable energy system operators are also expected in 2018,” said a spokesman for the Federal Network Agency of the “Augsburger Allgemeine” (Tuesday edition). According to this, the corresponding demands of the plant operators rose by over 60 percent in the first quarter of this year alone.

Compared to the same period in the previous year, the compensation claims rose from 142 million euros to 228 million euros, according to the Federal Network Agency, because the network capacity was insufficient to transport the green electricity produced, especially in strong coastal winds. The claims for compensation had already risen sharply in the past few years, writes the “Augsburger Allgemeine”. In 2017 it was 610 million euros, according to the Federal Network Agency, in 2016 it was 373 million euros.

14,000 more power cuts than in the previous year

Many consumers therefore have the feeling that energy is becoming more and more expensive. Consumer advice centers and social politicians warn of “energy poverty”. Due to unpaid bills, almost 344,000 households in Germany were temporarily cut off last year, 14,000 more power cuts than in the previous year, reports the Federal Network Agency.

Electricity locks were threatened as much as 4.8 million consumers. “This threat always hits households that are in a precarious situation and whose debt risk is high,” says Christoph Strünck, Politics Professor at the University of Siegen and author of a study on the subject. “To be cut off from the energy supply is the hardest form of energy poverty.” But is the thesis that energy costs have risen faster than the prices for general living conditions is true?

A closer look at the price and cost development for private households reveals that the development is less dramatic than it feels. In 2017, consumers had to pay an average of EUR 57.03 for 100 liters of heating oil. Ten years earlier it was 58.63 euros. We are currently in a phase of higher prices again, as we did in 2010. The heating oil costs around 72 euros.

The price of natural gas rose in the ten-year period up to 2017 from 6.51 to 6.64 cents per kilowatt hour. It has decreased since then, but will pick up again next year. The bottom line is almost price stability. And the prices for gasoline and diesel didn’t move much either.

Only in Denmark is electricity even more expensive

Only electricity has become significantly more expensive, the price of which climbed from 20.15 cents per kilowatt hour to 29.82 cents over a period of ten years. Electricity has become more expensive than incomes – essentially a consequence of the energy transition. The electricity costs are also very high by international standards. Only in Denmark is electricity more expensive.

A household in Germany spends a total of 232 euros per month on energy, according to the latest available figures from 2017. This corresponds to a share of 6.4 percent of a household’s consumer spending, as it was 15 years ago. This proportion is usually around seven percent. It only reached 8.0 percent in two particularly expensive energy years, 2012 and 2013. This indicates that the household burden with energy costs is relatively stable.

Households could use less energy to save money. But they didn’t do that very well. Although the energy consumption for living fell by nine percent between 2010 and 2017, this is mainly due to the often mild winters. Adjusted for the temperatures, the decrease was only one percent. In the case of electricity, economical devices or lamps have been absorbed by upgrading households with additional electrical devices, from vacuum robots to tablets.

What stresses consumers

And technical progress in engine technology did not lead to lower fuel consumption of the entire fleet, because many motorists opt for models with high horsepower and displacement, which then cause higher consumption. The average fuel costs for a distance of 100 kilometers were most recently 6.33 euros, as much as in 2001 or 2002. The total energy consumption of private households in 2000 was 88.2 million tons of hard coal units (tSKE), only slightly higher than in 2017 with 82 .9 million tSKE.

What stresses consumers is not so much a long-term, steady rise, but rather sharp fluctuations in energy prices, and these come from the oil market. “Oil is always a trendsetter for the markets,” says Rainer Wiek from the EID energy information service in Hamburg. And it itself serves as a raw material for gasoline, heating oil and diesel. The years from 2010 to 2013, when crude oil cost more than $ 120 at times, were the toughest time for consumers. The price of oil is currently half as high at $ 60.