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Increased energy costs: Gas and electricity price brakes pass the cabinet

2022-11-25T18:56:23.303Z


The federal government wants to relieve consumers of high energy costs in the coming year. When the cabinet decided on this, there were changes to the financing plans: the skimming off of excess profits was further restricted.


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The government wants to mitigate the sharply rising costs for gas and electricity for private households and the economy: the cabinet decided on gas and electricity price brakes on Friday.

From January 2023 to the end of April 2024, capped prices will apply to most consumption – the state will pay the difference.

Parliament should decide on the price brakes before Christmas.

The Federal Council meeting is on December 16th.

Chancellor Olaf Scholz (SPD) praised the project.

»The price brakes for gas, electricity and district heating are coming.

We cap the price of energy so that citizens can cope with the new prices and the challenges," said Scholz.

"The government is doing everything to ensure that our country gets through the winter well."

Officially, the price brakes apply from March;

In order to close the so-called winter gap, the relief contributions for January and February are credited in March.

The price caps only apply to 80 percent of a household's consumption in the previous year - this is intended to encourage consumers to save energy.

The gas price is to be capped at twelve cents per kilowatt hour.

According to calculations by comparison portals, the average price for new customers is currently almost 18 cents.

The electricity price should be a maximum of 40 cents for households and small companies.

According to comparison portals, it currently averages almost 43 cents per kilowatt hour.

Other upper limits should apply to companies: The price for companies with a gas consumption of 1.5 million kilowatt hours per year should be capped at seven cents, for 70 percent of consumption in 2021. This industrial gas price brake applies to around 25,000 companies and about 1900 hospitals.

For electricity, industrial customers should pay a maximum of 13 cents plus taxes, levies and surcharges for 70 percent of their consumption - measured in 2021.

Excess profit skimming starts later

The electricity price brake is to be financed in part by skimming off excessive profits on the electricity market.

This levy will take effect from December 1st – retrospective application from September was initially planned.

According to the ministry, the duration of the levy is limited to June 30, 2023 – that is shorter than initially planned.

However, the levy can be extended at a later date by statutory order, but no longer than April 2024.

The money for the gas price brake comes from the Federal Economic Stabilization Fund.

It is expected to be around 54 billion euros.

Greenpeace criticizes cabinet decision

There was praise for the price brakes from the Association of the German Automobile Industry (VDA) and the Central Association of German Crafts (ZDH).

Energy-intensive smaller craft businesses could also benefit from the electricity price brake, emphasized ZDH President Hans Peter Wollseifer.

Due to the fact that the electricity price brake for January and February will only be granted retrospectively from March, it could become financially tight for many companies.

Wollseifer therefore called for a »hardship bridge«.

Greenpeace criticized the plans.

"These resolutions make energy cheaper with many billions of taxpayers' money, but they fail to ensure that dependence on fossil fuels decreases in the future," explained Bastian Neuwirth from the environmental organization.


sol/dpa/AFP

Source: spiegel

All news articles on 2022-11-25

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