German regulator chief: The era of cheap energy is over

Although gas and electricity prices are significantly lower than in 2022, they are still higher than before. According to the president of Germany’s network regulator, however, they are unlikely to return to pre-crisis levels in the near future. German consumers will face further increases in energy costs due to higher distribution charges, as is also the case in Czechia this year.

Wholesale natural gas and electricity prices fell significantly last year, but remain well above pre-crisis levels. The price of emissions allowances also plays a role in electricity prices; at the start of last year, it was still approaching new record highs.

“The era of cheap energy is over. Prices are higher than before Russia’s war of aggression. And that is not going to change in the near future,” said Klaus Müller, president of Germany’s network regulator, the Bundesnetzagentur.

According to Clean Energy Wire, Müller said that as long as fossil fuels continue to play a major role in Germany’s energy mix, the situation is unlikely to change soon.

“I don’t think we’ll see the record-high prices of 2022 again, but I also don’t think we’ll return to pre-crisis levels,” Müller added.

Network charges are rising abroad too

The level of regulated charges, particularly for distribution and support for renewables, became one of the key issues towards the end of the year. Since the start of this year, consumers in Czechia, especially electricity customers, will pay significantly more. The sharp year-on-year increase is also due to the fact that the state took on some of these costs last year. However, this is not unique to Czechia: other countries, including Germany, have also sought to curb increases in end-user prices.

German consumers will also face a sharp increase in electricity distribution charges this year. According to the outlet, the German government has scrapped this subsidy for this year because of pressure on the state budget.

“This was a very difficult decision for the government. Unfortunately, you can’t save money without there being some impact,” Müller said, adding that an average family of four will pay around 120 euros more in network charges this year.