Study predicts: Electricity costs could remain high in the long term

Study predicts: Electricity costs could remain high in the long term

Recent developments in the energy market have seen a slight decline in electricity and gas prices after a sharp increase caused by the energy crisis resulting from Russia's war of aggression against Ukraine. Nevertheless, a recent study by economists, including Veronika Grimm, predicts that electricity costs could remain at a high level in the long term. Although the direct cost of electricity from renewable energy sources such as wind power and photovoltaics could fall by 2040, the study also takes into account the need for more expensive alternative energy sources such as gas-fired power plants in times of low feed-in. This could mean that electricity costs will not be significantly lower in 2040 and will be at a similar level to current levels.

Consumers had to pay an average of 41.75 cents per kilowatt hour of electricity in the second half of 2023, which is less than in the previous year, but still more than before the energy crisis. Despite efforts by the traffic light coalition to relieve consumers through price caps and to promise long-term falling energy prices as a result of the energy transition, the long-term development of electricity costs remains skeptical, according to Grimm. She emphasizes that the expansion of renewable energies will not necessarily lead to significant cost reductions.

In order to stabilize high electricity prices in Germany, Federal Minister of Economics Robert Habeck is planning to introduce a new instrument. It intends to protect private households and companies from a sharp increase in network fees. This is to be achieved by introducing an amortization account in order to distribute the costs of expanding the electricity network over future generations. Although this measure could mitigate price increases in the short term, the long-term costs will remain high, according to the study.