Electricity prices for new customers in Germany have risen sharply in the wake of the Iran war, following a surge in gas prices that is now feeding through to power bills as well. According to an analysis by consumer portal Finanztip published on Thursday, households signing a new electricity contract are currently paying an average of 31.68 cents per kilowatt hour (ct/kWh) for tariffs with a twelve-month price guarantee.
That figure represents an increase of more than five percent, or 1.58 ct/kWh, over the past three weeks alone. Finanztip expert Benjamin Weigl described the pace of the rise as "unusually strong". "The background is rising gas prices, which are now also feeding through to electricity prices," he said.
The connection between gas and electricity prices is direct. Since the outbreak of the war in the Middle East, both oil and gas prices have climbed significantly. Gas-fired power plants produced 16 percent of Germany's domestic electricity last year, which means that when gas becomes more expensive, the cost of generating electricity rises as well, pushing up prices across the market.
The spike in gas prices is also being felt directly on household energy bills. For new gas contracts with a twelve-month price guarantee, Finanztip reports that the average price has risen by more than twelve percent over the past three weeks, reaching 10.47 ct/kWh.
Finanztip points to the TTF trading hub in the Netherlands, the reference index for European gas prices, as a key indicator of where consumer prices are heading. From around 30 euros per megawatt hour at the end of February, the TTF price had already climbed to around 50 euros by 17 March.
On Thursday morning, following Iranian strikes on energy infrastructure in Gulf states, the TTF surged by more than 21 percent to over 66 euros per megawatt hour. At one point earlier in the day, the intraday rise had reached 35 percent.
The sharp moves on wholesale markets are raising concerns about what lies ahead for household energy bills. Weigl warned that if gas prices remain at such a high level over the long term, new customer tariffs are likely to rise further. "Should exchange prices rise even more strongly, this would feed through to gas prices for households to an even greater extent," he said.
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