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German Chancellor Scholz wants gas pipeline linking south and central Europe

Chancellor Olaf Scholz said Thursday he was seeking to shore up interest among European partners for a gas pipeline funnelling energy from southern to central Europe, as Germany scrambles to wind down Russian energy.

A gas flame on a stove.
A gas flame on a stove. Germany is struggling with a huge energy crisis. Photo: picture alliance/dpa | Marijan Murat

“I have been very active in talks with my two colleagues in Spain and Portugal, but also the French president and the president of the European Commission in advocating that we should take on such a project,” he said.

A pipeline running through Portugal, Spain and France to central Europe is “conspicuously absent”, the chancellor told journalists.

If it existed, it would “now make a massive contribution to relieving and easing the supply situation”.

Energy exporter Russia’s invasion of Ukraine has upended the power market, sending prices soaring and countries scrambling for supplies.

Germany has been looking across the world to make up for an energy shortfall after Russia curtailed exports to the European economic giant, which has been heavily reliant on Russian gas.

Energy bills for German households are expected to double in the next months, while industry has also warned earnings would be hit by the power crunch.

Scholz did not give further details on the pipeline he was eyeing.

READ ALSO: Germany’s Scholz pledges more relief for lowest earners

A project called Midcat to link Portugal, Spain and France was launched in 2013, but it drew opposition from environmental groups and work was halted in 2019 when financing fell through.

In the wake of the Ukraine conflict, European Commission chief Ursula von der Leyen has called for the resumption of the project, saying it carries geopolitical importance.

The Spanish government is also favourable about resurrecting the pipeline project.

However, it is not keen to contribute to the estimated €440 million in financing needed as the project would not directly benefit Spain.

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PRACTICAL TIPS

How German households can save on their electricity bills

Customers can save a high three-digit sum on their household electricity costs, according to calculations done by German price comparison portals. Here's why you may want to switch your tariff.

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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