Electricity and gas prices are falling: why new customers benefit the most

Created: 01/10/2023 04:55

By: Johannes Nuss

Gas and electricity prices made consumers worry about the future.

Energy prices are now relaxing, and new customers will benefit the most.

Bremen – The consumer prices for gas and electricity have known only one direction in Germany in the past few months and that was: steeply upwards.

So far it is not foreseeable what costs the state, the citizens and the economy will have to contend with at the end of the energy crisis.

At the beginning of the new year, however, the prices on the gas and electricity exchanges fell considerably.

The figures show that prices have long since returned to the level at which they were before the final escalation of the Ukraine war at the end of February 2022.

Yes, the fallen prices are not really received by the end customer.

Why is that?

And why are new customers most likely to benefit from the lower prices?

Electricity and gas prices fall in Germany: Energy prices fall back to pre-war levels

The European gas price, for example, fell to its lowest level since November 2021 in the middle of last week.

Gas prices are continuing their recent slide, helped by the mild weather.

On Wednesday, January 4, 2023, the TTF futures contract for the delivery of Dutch natural gas in one month was temporarily trading at just EUR 64.22 per megawatt hour (MWh).

On the European exchanges, the megawatt hour of gas is currently being traded again at the pre-war price.

However, it may be some time before the fallen prices reach consumers.

© Daniel Reinhardt/dpa/Archive

That is around 11 percent less than the day before.

At the beginning of December, the price was still at 159 euros per MWh at times.

The record high was reached last summer at EUR 345 per MWh.

At that time, a stop in the supply of natural gas from Russia triggered a rapid rise in prices.

Yes, that is now history and the filling levels of the gas storage facilities in Germany are also at a good level.

Gas and electricity prices are falling in Germany: existing customers have to be patient until prices arrive

Another aspect for the falling energy prices - above all for electricity - is the current weather.

Since it was extremely windy around the turn of the year, the wind turbines in Germany were able to produce a lot of renewable electricity.

This also benefits consumers now that prices are falling.

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But despite all the good news about falling gas and electricity prices: End and existing customers will have to be patient until the low prices reach them.

And that despite the gas price brake and electricity price brake.

Anyone who does not currently have a supplier who buys their electricity daily at the prices on the exchanges must assume that their supplier has stocked up on energy at high prices in the past and now has to pass it on to their customers.

Electricity and gas prices are falling in Germany: Why new customers benefit the most

Suppliers stock up on gas and electricity on the exchanges in advance in order to be able to compensate for extreme price fluctuations and so that they do not always have to be passed on to end customers and consumers immediately.

However, the utilities have also done this in times of high prices, so that the bottom line is that the energy prices are not even higher.

However, this means that many suppliers are only able to pass on the fallen gas and electricity prices to their customers with a delay.

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But there is also good news: Although utilities have stocked up on expensive gas and electricity for a long time, there will be one group that could still benefit immediately from the falling prices: and that is new customers.

It will probably be a few more weeks and months before the prices that have fallen actually reach the end customer.

However, experts assume that the prices for energy and thus the electricity and gas costs will remain permanently low.