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ENERGY

EXPLAINED: How customers in Germany can tackle rising electricity bills

Gas customers aren't the only ones who are set to bear the brunt of rising energy costs - electricity bills are also on the rise in Germany. Here's what to know about the latest price hikes and what you can do about them.

Published: 19 August 2022 17:11 CEST
Updated: 8 September 2022 09:53 CEST
Phone charger electricity
A man plugs in a phone charger in a multi-socket adapter. Photo: picture alliance/dpa | Monika Skolimowska

Gas has been the focus of many people’s worries for the coming winter, but almost unnoticed, electricity prices have been creeping up too. According to the latest estimates by price comparison sites and announcements by electricity suppliers, customers could be in for a nasty shock in the coming weeks and months. 

How are electricity prices developing?

They’ve risen sharply. The comparison portal Verivox shows the average electricity price for private consumers in Germany in an index. According to this index, the price for an annual consumption of 4000 kilowatt hours for a model household was 41.98 cents per kilowatt hour in August, which corresponds to an increase of 38 percent compared to the same month last year. Meanwhile, price comparison portal Check24 reports an increase of around 31 percent in the same period. According to this calculation, the average price of electricity currently stands at 39.9 cents.

Why are electricity prices also going up?

“The big price driver is the price of natural gas,” energy expert Udo Sieverding of the NRW consumer advice centre told DPA. Gas prices have risen mainly because Russia, Germany’s most important supplier, has slashed its deliveries to Germany by around 80 percent. In addition, according to Sieverding, there are, for example, the increased world market prices for coal and increased CO2 prices, which make electricity production more expensive.

READ ALSO: 8 simple ways you can save on heating costs in Germany

What price increases can be expected, and when will they reach the end customers?

Verivox counted 123 price increases from basic suppliers for August, September and October, with an average increase of 25 percent. For a three-person household with a consumption of 4,000 kilowatt hours, this means average additional costs of €311 per year. Previously, the competitor Check24 had already reported a price increase of 47.4 percent in September.

“In view of the high wholesale prices, we expect numerous electricity price increases in the coming months, which will be an additional burden for households,” says Verivox expert Thorsten Storck. The average electricity price could be 45 cents per kilowatt hour or more in the coming year. Sieverding also expects prices to rise. “We have to assume that prices will rise to over 40 cents.” The end of the line, he says, has not yet been reached.

What are the big energy suppliers doing?

Germany’s largest energy supplier, Eon, expects prices for end customers to continue rising.

Price pressure prevails in all markets, CFO Marc Spieker said last week, adding: “The only thing that differs is how quickly these price increases are then implemented.”

There is no question that they will have to come in the end, he said. Electricity customers of the energy supplier EnBW, for example, will have to pay an average of 31.1 percent more for their household electricity in the basic supply tariff from October.

What could drive the price of electricity even higher?

The last three nuclear power plants in Germany are to be shut down at the end of the year. Accordingly, there would then be a shortage of electricity from the reactors. According to Sieverding, this could cause prices to go up yet again. Now Germany is feeling the full force of the consequences of “dragging its feet on the expansion of renewable energies”, he said. 

Electricity metre

An electricity metre. Photo: picture alliance/dpa | Bernd Weißbrod

Is the government doing anything to ease the burden?

Since July, electricity customers no longer have to pay the Renewable Energy Act (EEG) levy, with the funding for green energy projects now coming directly from the state.

However, the abolition of the EEG levy has only dampened the rise in electricity prices slightly, says Storck. Further relief could come from a reduction in value-added tax on electricity, which the energy industry, for example, is demanding. So far, the federal government has only announced this measure for gas bills, which will be subject to seven percent rather than 19 percent VAT until March 31st, 2022.

READ ALSO: German electricity prices to soar by 25 percent on average

What can consumers do?

Unlike with gas, there are many individual electricity consumers in a household, says consumer advocate Sieverding. Electricity guzzlers such as old refrigerators, washing machines or halogen lamps should be replaced as soon as possible. An old heating pump can also help save energy. 

The consumer advice centre offers electricity-saving tips on its website. For example, you can make your refrigerator a little less cold or defrost an iced-up freezer. You can use a lid when cooking and frying, and when using the oven you can avoid preheating it and switch it off a little earlier. And of course: switch off the light whenever you leave a room. 

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BERLIN

Zurich versus Berlin: Which German-speaking city is better to live in?

After Swiss-born Eurovision winner Nemo told reporters he preferred Berlin to Zurich, we compare the two European cities, taking in living costs, quality of life factors, and cultural highlights.

Published: 13 May 2024 17:22 CEST
Zurich versus Berlin: Which German-speaking city is better to live in?

Nemo, who took the top prize in the Eurovision song contest at the weekend, comes from the small town of Biel in the canton of Bern in Switzerland, but splits their time mostly between Zurich and Berlin, German news outlet Tagesspiegel reported on Monday.

Both major cities in central European countries with German-speaking populations (although of course in Zurich the dialect is Swiss-German or Züritüütsch), Zurich and Berlin have some obvious similarities. On the other hand, Zurich has been ranked the world’s most expensive city for years, whereas Berlin maintains a reputation for being affordable and a hub for arts and culture – still managing to hang onto its reputation as “poor but sexy”.

Of course affordability is just one of many factors that make a city attractive to its residents, and both Zurich and Berlin have a lot to offer.

The Local takes a look at some key stats and lifestyle differences to offer a comparison of the two cities.

‘A creative city that is constantly changing’

According to the report inTagesspiegel, Nemo called Berlin their “secret favourite” compared to Zurich, adding: “I love Berlin so much because it’s such a creative city that is constantly changing.”

Coming from a 24-year-old singer, it’s perhaps no surprise that Berlin was their top choice. Germany’s political capital has also long been known as a capital of arts, culture, and radical acceptance.

Nemo said as much in their comments: “Berlin lets you be who you are. It’s a city that’s fun.”

Nemo at the airport

Nemo arrives at Zurich Airport in Kloten after winning the final of the Eurovision Song Contest (ESC) 2024. Photo: picture alliance/dpa/KEYSTONE | Walter Bieri

As a non-binary person, Nemo likely also enjoys Berlin’s notorious inclusivity. With loads of LGBTQ+ clubs and events, as well as specific events for virtually every demographic imaginable, Berlin prides itself on being a place where residents can do and be as they like.

But that’s not to say that Zurich is so close minded. In fact, the Swiss capital also boasts the best quality of life for the LGBTQ+ community, as well as older people, in all of Europe.

But if you’ve already grown beyond your twenties, you probably want to consider a few factors beside a city’s party scene before you consider moving there. Especially for people looking for a place to settle down, factors like cost of living or availability of work become more important.

Cost of living

As mentioned above, Zurich consistently ranks as the world’s most expensive city to live in. 

Berlin, on the other hand, is very affordable, compared to many major cities in Europe.

According to the site Numbeo, which gathers user-contributed data on cost of living across the world, as of May 2024 most living expenses are about 40 percent lower in Berlin than in Zurich.

However, local purchasing power is nearly 30 percent lower in Berlin according to the same data, which suggests that most Zurich residents don’t mind the city’s high price tag because they take home larger salaries.

Quality of life statistics

It’s not only the costs that are high in Zurich. In fact, one thing that might be higher is residents’ satisfaction with where they live.

According to the 2023 Report on the Quality of Life in European Cities, published by the European Commission, Zurich out ranked 82 cities across Europe in most quality of life metrics.

With 97 percent of survey respondents saying they were satisfied with Zurich, it was the highest ranked city, just ahead of Copenhagen in Denmark and Groningen in the Netherlands.

More than 90 percent of Berlin residents were satisfied with their city, which is a respectable score, but was less than the nearby city of Leipzig.

In particular, Zurich residents tend to be happy with their jobs, public transport, healthcare services, air quality, and their finances.

Interestingly, Berliners came in one point higher than people from Zurich on job satisfaction.

One aspect of life where residents marked Berlin quite poorly: “The time it takes to get a request solved by a city’s local public administration”, with a satisfaction rate of 39 percent.

READ ALSO: ‘I’ve waited four years’ – Foreigners in Berlin furious over German citizenship delays

Rave the Planet

The ‘Rave the Planet’ techo parade in Berlin in July 2023. Photo: picture alliance/dpa | Fabian Sommer

Where do the trains run on time?

One thing that Nemo admitted they don’t like about Berlin was the number of strikes.

“What really annoys me is that you can never be sure when you will arrive somewhere because there are so many strikes,” Nemo told the German Press Agency. “That’s why I’ve now bought a small scooter to get from A to B faster.”

Fortunately for Nemo and Berliners alike, transportation strikes have simmered down, at least for now, as most of Germany’s bigger transportation workers’ unions have reached agreements with their respective employers.

That said, delayed trains and buses are not an uncommon occurrence in Berlin, and across Germany trains are delayed much more often than in Switzerland.

In fact, in 2023, Swiss media pointed out that eight of ten of the country’s most often delayed train routes actually came in delayed from Germany. 

READ ALSO: German trains ‘responsible for Switzerland’s worst delays’

Other similarities and factors to note

One more commonality between Zurich and Berlin – they’re both international urban centres, attracting foreign residents from around the globe.

READ ALSO: IN NUMBERS – Zurich’s foreign population climbs to record high

While the influx of foreign residents certainly makes both of these cities more flavourful and interesting, it also comes with a major downside. Both cities are suffering from a shortage of housing.

According to Switzerland’s Federal Statistical Office, in Zurich only 0.06 percent of apartments were vacant in the summer of 2023. In Germany’s popular cities know the situation is not much better.

Home to around 1.4 million residents, Zurich is less than half the size of Berlin in terms of population. And according to World Population Review, it is a bit more dense as well, with approximately 4,700 residents per square kilometre as opposed to Berlin’s 3,800.

Famously built in former swampland, Berlin’s surroundings are flat and partially forested with an abundance of lakes in the surrounding region. The Spree River flows the through the city centre, and is connected a series of urban canals. 

Zurich, on the other hand, is set between wooded hills, just north of the Alps. It’s 408 metres above sea level and much of the city follows the Limmat River, which flows out of the lake that shares its name with the city.

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