Compensation for CO2 tax: The broken promise of cheap electricity

Dhe federal government did not want to give the bitter pill without sugar: If, from January 1, 2021, heating oil, natural gas and gasoline with a CO2-The tax will be made more expensive if the citizens are relieved to compensate for the electricity price, was the promise months ago for the adoption of the climate protection program 2030. That would help “especially low-income people and families”.

Now, however, the turn of the year is getting closer and it is becoming apparent that, contrary to this promise, there will be no compensation for the CO2– The levy is coming. Instead, consumers face a double burden. In addition to the rising prices for heating oil and fuel, there is also a higher electricity price. A double blow to the office in the name of climate protection.

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This is proven by the data from the leading price comparison portals. Energy suppliers who want to change their prices at the beginning of the year must, according to the law, announce this six weeks in advance. By the due date on Thursday of this week, according to Check24, 66 basic suppliers had already increased their electricity prices or announced the increase at the turn of the year. The average price increase was 4.5 percent. That puts a strain on around a million households.

Source: WORLD infographic

In contrast, there were 55 suppliers who were lowering the prices for basic services – but only by 2.2 percent on average. 370,000 households benefit from this. “The bottom line is that a model household will pay at least 30 euros more for electricity next year due to the increased network usage fees and the increase in VAT”, says Lasse Schmid, Managing Director Energy at Check24. “It will definitely be more expensive.”

Pandemic causes electricity consumption to fall

Consumer advocates are angry about the price trend. “Although the EEG surcharge and procurement costs are falling, most energy providers do not pass on these advantages, but go to a diving station”, criticizes the energy expert at the consumer center in North Rhine-Westphalia, Udo Sieverding. “The Federal Government’s reduction in electricity prices was a countermeasure to CO2-Price for oil and gas thought. “That is” doubly annoying “for consumers.

Source: WORLD infographic

The Federal Ministry of Economics could not initially be reached for a comment. But the federal government has a reason for the broken electricity price promise: the corona crisis. As a result of the falling electricity consumption, the costs of the green electricity subsidies were spread over fewer kilowatt hours this year. The surcharge with which green electricity production is subsidized would have jumped from around 6.8 to 9.7 cents per kilowatt hour because of this effect.

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The federal government averted the threat of inflation by paying part of the EEG surcharge directly from the federal budget for the first time in the coming year. The Federal Minister of Finance has set aside around eleven billion euros for the years 2021 and 2022 in order to lower the EEG surcharge to 6.5 cents initially and then to six cents. This does not result in the promised net relief for consumers when it comes to electricity, but at least corona-related additional pollution is avoided.

Little consolation for consumers. The rising electricity prices are also a major setback in terms of climate policy. The federal government actually wanted to make electricity cheaper so that climate-friendly technologies such as the electric car or the heat pump would become more attractive. Now nothing changes in their operating costs to the advantage. The political impetus for these technologies must continue to be limited to government subsidies for purchases. With an average of over 32 cents per kilowatt hour, German consumers already pay the highest electricity prices in Europe.

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Which trends will prevail over and above short-term hype?

Die CO2-The tax due on heating oil, natural gas and petrol from January 1st will increase gradually in the following years. In 2021 these fuels will be sold at 25 euros per tonne of CO2 charged, in 2025 it will be 55 euros per ton. For a model household with gas heating and petrol in the garage, the new CO2-Dues from the Fuel Emissions Trading Act (BEHG) more than 200 euros additional costs per year.

In 2025 it will then be more than 450 euros, calculate consumer advocates. The electricity prices would have to drop considerably in order to cover these additional costs of CO2-Price to be balanced only partially.

Hardly any incentives for switching to electric cars

At best, consumers can avoid the additional costs of initially seven cents per liter of petrol in the coming year if they increasingly walk, cycle or use public transport, as is desired by climate policy. But the incentive to switch to an electric car is weak because, contrary to the climate policy declarations of intent, it has not been possible to make green electricity cheaper.

According to calculations by the tariff broker Switchup.de, which continuously and automatically organizes the change of contract to the cheapest provider in each case for its customers, there was no obvious reason for sharp price increases: For the municipal utilities and regional suppliers, the procurement costs for electricity had not increased, on the contrary .

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“Due to the sharp drop in procurement costs, it is overdue to reverse the significant price increases of the last two years and to give consumers back the cost savings”, demands SwitchUp founder Arik Meyer. “If there is no letter from the electricity provider in the mailbox in the coming days that prices will be reduced, you should look for a new provider.”

Now it is correct that consumers can usually save several hundred euros a year by switching provider. On the other hand, some suppliers also have good reasons for a price increase. For example, the Stadtwerke Lambrecht stand out from the Check24 list as the biggest price driver, raising their basic supply tariff by 10.8 percent at the turn of the year.

Catch-up effects are said to be responsible for the price increase

A phone call in the Palatinate Forest explains the reasons: The move of an industrial company suddenly cost the small utility a third of its electricity sales. The network costs, which had to be allocated to the remaining kilowatt hours, made the tariff adjustment inevitable.

The capital city supplier Vattenfall, which is also among the top 10 with a price increase of around six percent in the basic tariff, explains the inflation with a catch-up effect: Actually, they wanted to increase prices at the beginning of 2020 to reflect the then increase in the EEG -Surcharge and the network charges.

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However, due to the Corona crisis, the price increase was postponed to August 1st. “Despite the capped EEG levy, the majority of electricity providers apparently do not see any scope for lower prices at the moment,” is the conclusion of Verivox energy expert Thorsten Storck. “We therefore expect electricity prices to stagnate at a high level in the coming year.”

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