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Germany to take emergency measures to meet energy needs

German Economics Minister Robert Habeck wants to take preemptive measures to counter the cutback in Russian gas supplies - so that things don't get tight when the winter heating season begins.

Published: 19 June 2022 12:14 CEST

Federal Minister for Economics, Robert Habeck, at a press conference on June 15th.

Federal Minister for Economics, Robert Habeck, at a press conference on June 15th. Photo: picture alliance/dpa | Britta Pedersen

In view of reduced Russian gas supplies, German Economics Minister Robert Habeck (Greens) has announced additional measures to save gas.

In a five-page paper obtained by the German Press Agency on Sunday, the Economics Minister stated “Gas consumption must continue to fall, but more gas must be put into storage facilities to make up for it, otherwise it will be really tight in the winter.”

Proposed measures include reducing the use of gas for power generation and industry, using more coal-fired power plants, and ramping up the filling of gas storage facilities.

READ ALSO: Why Germany is discussing whether people should ‘freeze by law’

Russian state-owned company Gazprom significantly reduced the flow of gas through the Nord Stream Baltic Sea pipeline to Germany in recent days, claiming to have had delays in the repair of compressor turbines. EU officials, however, believe that it is a politically motivated move and that Moscow is punishing allies of Ukraine.

The tense situation with energy supply and high prices are a direct result of Russia’s war of aggression against Ukraine, the Green Party politician said: “It is obviously Putin’s strategy to unsettle us, to drive up prices and to divide us.”

He added that it was still possible to replace the supplies that had been lost and that gas storage facilities were still being filled, albeit at high prices. For now, he said, the security of supply is guaranteed.

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How German households can save on their electricity bills

German households are overpaying for electricity by billions of euros each year, according to calculations carried out on the Verivox price comparison portal.

This is because nearly a quarter of households in Germany purchase electricity via the most expensive tariff group from their local supplier – the so-called ‘basic supply’, or Grundversorgung in German.

But in Germany, customers have energy tariff options, and saving hundreds on your energy bill can sometimes be as simple as checking your current tariff online and switching to a cheaper one in a matter of minutes.

Based on approximately ten million households consuming electricity from the basic supply, Verivox calculates that Germans are overpaying by about €5.5 billion annually. That’s because the average difference between basic supply rates and the cheapest local energy rates currently amounts to 20 cents per kilowatt hour (kWh).

What is the ‘basic supply’ for household energy?

Household electricity in Germany is purchased through different tariffs (Stromtarifs). Through these various tariffs, local energy companies offer different prices for electricity, depending on customer contracts.

The basic supply tariff for electricity can be thought of as the default. When a new house is connected to the energy grid, for example, its electricity will be provided via the basic supply unless the homeowner chooses another tariff option.

READ ALSO: How to change electricity and gas providers in Germany

The basic supply is intended to ensure that everyone has access to electricity, even if they haven’t shopped around for an energy provider on their own. It can also be advantageous in the short term because it can be cancelled at any time, as opposed to other tariffs which typically come with longer contracts.

But the basic supply is comparatively expensive. According to Verivox, basic supply electricity currently goes for an average of 44.36 cents per kilowatt hour (kWh), whereas the cheapest available rates on average come to 24.7 cents/kWh across Germany.

How much can you save?

At current rates, you can expect to save about 44 percent on your electricity bill if you switch from basic supply to the cheapest option with a price guarantee.

That amounts to significant savings, considering that annual electricity costs regularly come to a few thousand euros in German households.

The Hamburger Abendblatt reported that a three-person household consuming 4,000 kWh would save an average of €786.

These prices will vary from provider to provider and from region to region.

Keep in mind that choosing other tariff options often comes with some additional fees. Still, in many cases taking a look at different electricity tariff options can save households some money.

Also, switching tariffs is different from switching your energy provider. If you currently get basic supply electricity from Vattenfall, for example, you could potentially switch to a different tariff option while maintaining your business with them. But if you are between contracts, or currently on basic supply, you could also consider switching providers.

In this case, a comparison portal like Check24 can be useful to get an idea of which companies offer the best rates.

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