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ENERGY

COMPARE: German electricity prices among highest in the world

Electricity prices in Germany are among the most expensive in the world, a new analysis shows.

A man places a plug into the wall.
Electricity prices are surging in Germany. Photo: picture alliance/dpa | Sina Schuldt

An international comparison has found that German consumers are spending a huge amount of money on electricity compared to other countries.

The analysis of 133 countries, compiled by comparison portal Verivox using data from the energy service Global Petrol Prices and adjusted for purchasing power, found that Germany ranked in the top 15 of highest electricity costs worldwide.

Overall, Germany was in 15th place in the international ranking, according to German news site Spiegel. Most countries with higher electricity prices were crisis-hit developing countries such as Rwanda, Sierra Leone and Burkina Faso.

According to Verivox, the only EU countries where electricity prices were even higher than Germany were the Czech Republic (13th) and Romania (14th).

READ ALSO: How households in Germany can tackle rising energy costs

The table below put together by Spiegel shows the cost per kilowatt hour of electricity in dollar-cent

Among G20 countries, Germany has by far the most expensive electricity. In the next G20 countries on the list - Italy (33rd) and the UK (44th) - electricity prices are about 10 and 12.5 cents cheaper respectively, adjusted for purchasing power.

In many other countries with a high standard of living, electricity is at least 50 percent cheaper than in Germany. These include Canada, Norway, the USA, Switzerland, Finland, Sweden and the Netherlands.

The data from Global Petrol Prices is from the second quarter of this year. What's more, the current price surge in Germany has not yet been taken into account in the calculations.

The average electricity prices in the different countries were calculated on the basis of tariffs of selected suppliers and data from state authorities.

The country comparison is adjusted for purchasing power. That means it takes into account that in a country like Germany, where the per capita economic output is around 45,733 Dollars, it is significantly easier to spend more money on electricity than in Kenya, for example, where per capita GDP is only around 2,039 Dollars.

Why are electricity prices so high in Germany?

In October 2021, German consumers paid on average of 34.79 cents per kilowatt hour of electricity, according to Verivox.

It's the fourth month in a row that costs have risen to a record level. And it forms part of a wider trend. Within the past 12 months, electricity has become more expensive for consumers by an average of 20.9 percent.

READ ALSO: Why German electricity bills are hitting record highs

Since the year 2000, household electricity bills have on average doubled in price.

A three-person household in Germany now pays an average of €93 a month on their electricity bill, up from €41 twenty years ago.

Statistik: Durchschnittliche Stromrechnung eines 3-Personen-Haushaltes in Deutschland in den Jahren 1998 bis 2021 (in Euro pro Monat) | Statista
Average electricity bill for a 3-person household (1998-2021). Mehr Statistiken finden Sie bei Statista

READ MORE: German consumers ‘pay the highest electricity prices in Europe’

Experts say the rise in electricity prices over the past 20 years in Germany is mainly due to increasing taxes, levies and surcharges.

One of the main factors is Germany’s public investment in renewable energy sources, which has been financed through a tariff called the EEG system. 

The system promises fixed prices to wind and solar providers to try and stimulate growth in the sector. But it has always been controversial because industries have been exempt from paying it, meaning that private households have to fork out for it. 

The German government announced last month that it will lower the levy from 2022 to help ease the burden on households. 

But it may have little impact on energy bills due to factors like rising energy prices and increasing grid fees. 

On the wholesale exchange, electricity has become about 140 percent more expensive since the beginning of the year. 

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ENERGY

Could the Norwegian government introduce a cap on energy prices? 

Due to soaring prices, the Norwegian government is mulling over several solutions, including a potential price cap for electricity and limiting energy exports abroad. 

Could the Norwegian government introduce a cap on energy prices? 

High energy exports in the last 12 months, low filling levels in Norwegian reservoirs and an uncertain energy situation around Europe have led to soaring electricity prices in southern Norway. 

Last year the government introduced a scheme whereby it covers 80 percent of consumers’ energy bills where the price rose above 70 øre/kWh. The portion of the bill under 70 øre is paid in full by households. The portion the government covers will increase to 90 percent in October. 

Critics have argued that the current scheme still leaves households struggling with their bills. As a result, Norway’s government has said it is mulling its options to curb energy bills.

Norway primarily depends on hydroelectric dams to help it meet its energy needs. Still, reservoirs in southern Norway have been at the lowest level for ten years, public broadcaster NRK reports. 

Low reservoir filling over the past year has conceded with record exports with higher prices on the continent, making sending power abroad an enticing proposition.

Recently, exports have fallen significantly, and the government is considering introducing a limit to reduce the possibility of energy rationing being introduced this winter. 

“Restrictions on the export of electricity to Europe may be one of the measures that is needed,” Elisabeth Sæther, state secretary at the Ministry of Oil and Energy, told NRK. 

Earlier this week, Prime Minister Jonas Gahr Støre ruled out completely shutting off exports to the continent. 

“It is a dangerous thought and will not serve us well. It could give us more expensive power and lack of power in given situations. We will hardly be able to import power when we need it without contributing to other countries when they need it. There is a reciprocity in this,” he told the newspaper Aftenposten earlier in the week. 

Sæther also told NRK that the government was weighing up putting a maximum price on energy but warned that it could have unforeseen consequences. 

“We are afraid that a maximum price means that more water is drawn into the reservoirs, which we need for the winter. It is a serious situation. We must prevent ourselves from getting into a situation where we lack enough power this winter,” she told the broadcaster. 

At the end of May, the state-owned Statnett announced that the supply situation in Norway might be under strain – in some scenarios – all the way up to and through the winter, especially if Southern Norway experiences drier than usual weather in the second part of the year. 

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