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How high will heating bills in Germany be this winter?

As autumn sets in, residents in Germany will be wondering what they can expect from heating costs this winter following years of spiralling prices.

Published: 16 September 2024 11:49 CEST

How high will heating bills be this winter? Photo: picture alliance/dpa | Hannes P Albert

Following Russia’s full-scale invasion of Ukraine in 2022 and the subsequent energy crisis, consumers have faced higher household bills with little respite.

So what will energy bills look like for the cooler months this year?

According to the latest data, it will be cheaper for people using oil or gas for heating in Germany compared with last winter.

Driven by changes in the wholesale energy markets, the cost of heating oil has fallen by 23 percent year-on-year, while the price of natural gas has dropped by an average of six percent, according to price comparison portal Verivox.

Gas cost an average of 12.14 cents per kilowatt hour in September 2023, compared to 11.41 cents this year.

Referring to the sharp price increase two years ago, Verivox expert Thorsten Storck said: “Gas prices are currently around 47 percent lower than during the energy crisis. This is providing noticeable relief for households in Germany.”

Consumers agreeing new contracts can get the best deals. “New customers in particular can almost buy gas at pre-crisis prices again,” said Storck.

Consumers advised to check tariffs

Of course how high consumers’ gas bills will be depends on a few factors like how cold the winter is, their level of usage and the gas tariff they have chosen.

There are large price differences depending on the tariff you agree with a supplier.

According to experts, the average gas price in the basic tariff of local suppliers fell from 15.15 cents/kWh in September 2023 to 14.2 cents/kWh in September 2024. Although the average price of the cheapest offer for new customers has fallen less in the same period from 8.88 cents/kWh to 8.75 cents/kWh, the costs are still around 38 percent lower than those of the basic supply.

“Gas customers should therefore check their current tariff and compare it with current offers for new customers,” said Verivox.

The price experts advised that a household in a single-family home with an annual consumption of 20,000 kWh can currently save an average of €1,091 per year by switching from the local basic supply to the cheapest offer with a price guarantee.

Meanwhile, oil customers can also expect lower heating costs than last year. While light heating oil cost an average of around €119 per hectolitre in September 2023, it will be around €92 at the start of the 2024 heating season. That is equal to a price reduction of around 23 percent.

Storck advised people to act now to make the most of the current situation before increases to the CO2 tax come into force.

“This could be a good time for heating oil customers to top up their tanks – especially in view of the rising CO2 tax,” he said.

From January 1st 2025, the cost of a tonne of carbon dioxide in Germany will rise by €10 to €55. The share of the CO2 price per litre of light heating oil will then amount to around 17 cents.

This will have an impact on customers as supplier usually pass on the higher CO2 prices to them.

Compared to 2024, the average costs caused by the CO2 price for a single-family home with an annual consumption of 2,000 litres of heating oil will increase from €287 to €350 per year. The additional costs for a household with a gas consumption of 20,000 kilowatt hours will rise from €194 in 2024 to €237 in 2025.

The CO2 ‘tax’ was brought in to encourage climate protection. The government says the additional revenue is re-invested in climate action measures.

What about electricity?

When it comes to electricity costs, there has recently been a spike – but experts believe that costs will come down again.

At the end of August, electricity prices in Germany, which had been falling, suddenly climbed to their highest level since the start of the year.

Customers had to pay an average of 28 cents/kWh for a new electricity tariff for a consumption of 4,000 kilowatt hours (kWh) per year. The last time the electricity price was at this level was on January 15th.

Experts put it down to cheaper suppliers raising their prices temporarily.

However, it’s expected that the price of electricity should fall in the coming months.

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Thousands of jobs have already been lost in the region, where wind farms now rise near abandoned open-pit mines and many people look with dread towards 2038, the deadline for the “coal exit”.

Their fears help explain the strong local support for the far-right Alternative for Germany (AfD), which does not just rail against migrants but also rejects the green energy push and questions man-made climate change.

At local elections held in Spremberg in June, the AfD scored 39.3 percent – an omen ahead of regional elections next Sunday in the state of Brandenburg, which polls suggest it could win.

Lignite, or brown coal, may be a climate killer, but since the 19th century it has been key to the identity of the Lusatia industrial region on the Polish border, known as the Lausitz in German.

“Thousands of people here have been linked to coal their whole working lives,” said the town’s mayor, Christine Herntier, an independent who has held the post for a decade.

“We are proud of our tradition,” said Herntier, 67, pointing to a huge map on her office wall of the Schwarze Pumpe plant and its surrounding industrial complex.

Most people in Spremberg, population 25,000, have grudgingly accepted the coal phase-out plan, under which the government has earmarked billions for structural transition plans, she said.

But, she added, ahead of the state election the winding down of coal “is still a big issue”.

‘Anger over wind farm’

Michael Hanko, the AfD’s top representative in Spremberg, said he is certain that the looming demise of the lignite industry is “one of the main reasons” residents are voting for his party.

“I don’t think the government has really got them on board with this whole prescribed transformation, saying that we now have to do everything with renewable energies,” Hanko said.

Michael Hanko, the AfD (Alternative for Germany) top candidate, in Spremberg, eastern Germany on, September 9, 2024. Photo by Femke COLBORNE / AFP

The AfD, founded about a decade ago, scored a triumph earlier this month when it won an election in the eastern state of Thuringia and came a close second in Saxony.

It now also has a good chance of winning in Brandenburg, the state that surrounds Berlin, where it is polling narrowly in first place at around 27 percent.

When the German government decided five years ago to phase out coal, it pledged around €40 billion to help coal regions adapt, with €17 billion for the Lausitz alone.

Much of the money is intended to flow into developing the renewables and hydrogen sectors, helping the region maintain its identity as an energy hub.

But residents complain the investment has been too slow to materialise and is flowing into the wrong places.

In Spremberg, plans to extend a nearby wind park have caused outrage among some locals, who fear it will be a threat to 150-year-old trees, a protected swallow species and drinking water.

‘Something different’

Coal has long been synonymous with the Lausitz region, which takes in parts of Brandenburg and Saxony and a small strip of Poland, and where lignite was discovered in the late 18th century.

But the industry all but collapsed after German reunification in 1990, when most of the region’s open pit mines were shut down and thousands of jobs vanished.

Today, only around 8,000 people are employed in the lignite industry across the Lausitz, with 4,500 of them in Brandenburg, though the industry is still one of the largest private employers in the state and coal remains a strong part of the region’s identity.

Already weary from the problems caused by reunification, people in the region have felt “overwhelmed” by recent global challenges, said Lars Katzmarek, a board member of the Pro-Lausitz campaign group.

Lars Katzmarek, board member of the Pro-Lausitz campaign group. Photo by Femke COLBORNE / AFP

“The coronavirus, the energy crisis, the Ukraine war – these are all very difficult things that people still haven’t fully digested… and perhaps at some point they just close their ears,” he said.

On a rainy morning in Spremberg, Joachim Paschke, 81, who used to work in mechanical engineering and welding, was buying bread rolls in the bakery opposite the town hall.

“I’m definitely not an AfD supporter but I can understand people who are,” he said.

“The established parties have nothing concrete and the AfD is offering something different. People want change.”

By Femke COLBORNE