Politically-related surcharges
Eon boss fears rising electricity and gas prices
January 2, 2024, 3:12 a.m
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The VAT for gas will rise this year and a planned subsidy for transmission providers will probably no longer apply. According to the head of the energy company Eon, this will be reflected in the prices for consumers. The situation in the Middle East could make the situation even worse.
The head of the energy company Eon, Leonard Birnbaum, expects electricity and gas prices to rise in 2024. “After the previous price reductions, electricity and gas may become more expensive again from 2024,” Birnbaum told the “Rheinische Post”. The causes are the increase in VAT on gas and the elimination of the dampening of the transmission network operators’ network fees on electricity prices. “In many cases, ending the price cap has an additional effect.”
According to the preliminary report, Birnbaum expects that all suppliers will pass on the increase in taxes and network fees: “These are politically determined surcharges; all suppliers will have to pass these on to gas and electricity customers. Maybe not immediately, but probably in the coming months.” If there were an escalation in the Middle East, this would also affect all energy markets.
There was a significant decrease compared to the record prices in autumn 2022, said Birnbaum. “But prices are still around twice as high as before the crisis. The wholesale price for electricity was 50 euros per megawatt hour at the beginning of 2021, today it is still almost 100 euros.” The E.ON boss does not expect prices to fall back to 2021 levels. “Although generation through wind and solar costs comparatively little, the protection – keyword: dark doldrums – through storage or new gas power plants and the connection of the many decentralized energy transition systems still increases the overall cost of supply.”