The price of electricity is going crazy and the high fluctuations make planning practically impossible. How the announced electricity price brake could become reality and what alternatives experts are proposing.
If the price of electricity were a share, you could really gamble with it: On Monday last week, a megawatt hour cost 870 euros on Europe’s electricity exchanges, a few days later it was half that and on Sunday it was only 50 euros in the meantime – a price that used to be known as was labeled normal. And it remains turbulent. The reasons for this include the fluctuating reports on gas: Sometimes Putin turns off the tap, then it says the storage tanks are full. You have to know that gas and electricity prices are closely related.
In addition, political announcements influence the courses – such as that of the German government on Sunday to want to introduce an electricity price brake as part of the third relief package. This is to be financed by the states skimming off so-called random profits from electricity producers, which do not have any appreciably rising costs but benefit from the high prices. Federal Minister of Finance Christian Lindner is assuming an amount in the double-digit billions that could be used as an “electricity price brake for basic consumption”. This is intended to provide consumers with a “certain amount” of cheaper electricity. How big this “certain amount” is remained unclear.
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Many other points are still open. The only thing that is certain is that consumers should not look forward to a quick relief in this regard: it should be weeks, if not months, before the brakes kick in. After all, the European Union has spoken out in principle in favor of skimming off such chance profits.
It is questionable whether the EU and Germany will agree on the level of reduction in electricity costs: the EU has already stated that it is providing incentives for companies and private consumers to reduce electricity consumption. Conversely, this means that relief per se only makes sense to a certain extent, because without higher prices there would be no incentive to save electricity.
Three renowned economists have investigated the essential question of how people can be encouraged to save electricity and have now published their ideas. Their core idea is that utilities should pay their customers money if they use less electricity. Specifically, they propose a premium of 100 euros if consumption falls by ten percent. The concept of savings bonuses has been tried and tested in countries such as the USA. The idea came from Silvana Tiedemann and Lion Hirth from the Hertie School in Berlin and Axel Ockenfels, Professor of Economics at the University of Cologne.
If you want to create an ETF (Exchange Trade Fund) as a savings plan, you have to open the right securities account. Compare Germany’s online banks and neo-brokers by offer, price and service for your ETF savings plan.
But why should energy suppliers give their customers money if they use less? What’s in it for them? You have to know that in the current situation, suppliers can resell the electricity they have saved at a higher price than they bought it a long time ago. According to the economists, they would have an advantage if private consumers saved. As a rule, they would not have to pay extra and the model does not cost tax money anyway.
However, reading the meters once a year is not enough. But if you can save money and have simple operation via an app, you’ll probably do it every month. When it comes to gas, there are already suppliers with EnBW and MVV that pay savings premiums. The amount of the premium is decisive.
