Electricity prices continue to rise: consumers and SMEs are left behind!

Electricity prices continue to rise: consumers and SMEs are left behind!

On July 5, 2025, the coalition committee agreed on a relief package for energy prices. Despite this measure, the Federal Association of the Energy and Water Industry (BDEW) expresses sharp criticism of the planned steps. In particular, there is criticism that the electricity tax is not being reduced to the EU minimum, while industry, agriculture and forestry continue to benefit. Private households and numerous companies, on the other hand, are left empty-handed when it comes to comparable relief, which increases concerns about the rising cost of living.

The BDEW also warns that the planned subsidies for network fees, which are due to come into force on January 1, 2026, must be legally binding by autumn 2023. These subsidies depend crucially on legal clarity, and it remains to be seen how the network operators will redefine the network fees for industry and consumers. Information about relief from energy suppliers must also be provided in a timely manner.

Criticism of financial priorities

A central point of criticism is the cap on the gas storage levy, while there is a lack of focus on climate-friendly investments. The planned special fund of 10 billion euros annually could largely be used for consumer spending, which means that important investment programs, particularly in hydrogen technology, will come under pressure. Electricity tax and network fees play a significant role in the costs for consumers and companies.

Higher electricity prices reduce purchasing power, which has a negative impact on the cost of living. Energy-intensive industries continue to benefit from lower taxes, while other sectors do not receive comparable relief. The BDEW sees urgent pressure on the government and parliament to achieve a more balanced distribution of the burden.

Reform proposals to reduce network fees

In order to reduce costs for consumers, Agora Energiewende proposes a number of measures in a current study. These analyzes show that government subsidies to reduce network fees could potentially be up to 80% lower. Savings in the expansion of the electricity grid and reforms for more efficient grid operation are urgently needed in order to reduce the financial burden.

The study recommends three key measures:

• Verwendung von Freileitungen statt Erdkabel beim Stromnetzausbau.
• Eigenkapitalbeteiligungen des Bundes zur Senkung der Investitionskosten für Netzbetreiber.
• Einführung dynamischer Netzentgelte für flexible Verbraucher, etwa für Elektrofahrzeuge und Wärmepumpen.

In the long term, these reforms could help to keep network-related costs stable and reduce the financial burden on households. It is currently expected that without measures, costs could rise by up to 30% over the next decade. For example, the price for a four-person household could rise from 13 cents to 15 cents per kilowatt hour, which means additional annual costs of 104 euros.

Overall, Agora's analysis shows that the federal budget could save around 160 billion euros by 2045 through these reforms. The Federal Network Agency's current network fee reform process is in the consultation phase, and the study includes comprehensive recommendations for cost reduction in order to ensure a fair distribution of costs.

These findings make it clear that the ongoing discussion must be supported by politics as well as by business and civil society in order to find a sustainable solution to the challenges in the energy market.

For more information visit the website of Association office and Agora energy transition.