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Power poles stand at the new substation next to the Mehrum coal-fired power plant in the Peine district, Lower Saxony
Photo: Julian Stratenschulte / dpa
The sharply rising costs of fossil fuels are driving prices on Europe's electricity markets higher and higher.
On Friday, the trend-setting futures contract for base load electricity for delivery next year on the Leipzig energy exchange EEX temporarily rose to 310 euros per megawatt hour.
That corresponds to a good 31 cents per kilowatt hour (kWh) – around 320 percent more than a year ago.
This means that Germany's electricity consumers will face considerable additional costs: both industry and private households.
Many electricity suppliers had already increased their tariffs in the past few months.
According to the comparison portal Verivox, a kilowatt hour for an average household cost 39.68 cents in June: a good third more than a year earlier.
But the recent price hike in wholesale – in mid-June a kilowatt hour on the EEX still cost 22 cents, now it's nine cents more – is not included in the previous tariffs.
For a family of three with an annual consumption of 3500 kWh, this surcharge alone would mean additional costs of around 315 euros per year, not including additional surcharges such as higher sales tax.
The skyrocketing wholesale prices for electricity even overcompensate for the end of the EEG surcharge on July 1st.
This was recently 3.7 cents per kilowatt hour - and is now paid for with tax money.
The end customer tariff for electricity consists of the wholesale price, a margin for the provider, a network fee averaging just under eight cents per kWh, as well as various duties and taxes.
The main reason for the boom in the electricity market is the extremely high wholesale prices for natural gas and hard coal.
In the European reference market TTF, the price of gas has increased by a further 75 percent since mid-June in view of the Russian supply cutbacks.
Coal costs around 17 percent more than just three weeks ago.
Green electricity producers cash in
On top of that, the prices for pollution rights, which power plant operators in the EU have to show for every tonne of carbon dioxide (CO₂) emitted, have risen significantly.
These emission rights could soon become even more expensive if gas-fired power plants in Germany were to be replaced by coal-fired reactors for a while, as Federal Economics Minister Robert Habeck (Greens) is planning.
This is because more CO₂ is emitted when generating electricity from coal.
"Energy costs have really exploded since the end of 2021," says Steffen Suttner, Managing Director of Energy at the comparison portal CHECK24.
A complete Russian gas supply stop could “exacerbate the situation”.
The beneficiaries of the electricity price boom are the producers of green electricity.
It is true that relatively little wind power is currently being produced, which is typical for the summer.
Nevertheless, the operators of wind farms and solar systems are making a lot of money.
After all, these green electricity producers can currently sell their electricity on the market at extremely high prices.