German household electricity prices fall 2% year-on-year but still near record highs - Verivox

FRANKFURT (Reuters) - German households are paying 2% less for electricity than a year ago, power prices portal Verivox said on Thursday, citing lower renewable support fees and temporary tax cuts while noting the level remains close to all-time records.

An average household with an annual consumption of 4,000 kilowatt hours (kWh) has to pay 1,045 euros ($1,282.01), or 29.4 cents per kWh, for 2021 supply in January, according to the portal that encourages price comparisons and supplier switches.

A year ago, the average -- calculated by Verivox from all tariffs offered by 800 local and 30 regional and national distributors -- stood at 30.01 cents, prior to hitting a historic high of 30.23 cents in April.

“We expect prices to stagnate at the current high levels in the first quarter,” a spokesman said.

The price of retail power in Europe’s biggest economy remains politically contentious as state taxes and fees, largely to support the transition to decarbonised energy sources, amount to around 50% of the final cost.

Transmission grid fees for power transport, which add another 25%, have also increased.

These factors largely decouple household prices from market forces.

Verivox in research with Global Petrol Prices last year found that German energy prices were the highest among the G20 group of wealthy nations, although it noted its citizens’ high purchasing power helps to absorb the burden.

Attempts by the government to help consumers by cutting and capping the renewable power surcharge and temporarily cutting value added tax during the coronavirus pandemic were not fully passed on, Verivox noted.

A quarter of households still remain faithful to core products of local suppliers, which in 2020 rose 4% to 33.77 cents/kWh, well above the average.

VAT, meanwhile, is back at 19% after a brief drop to 16%.

($1 = 0.8151 euros)

Reporting by Vera Eckert, editing by Kirsten Donovan