German gas prices to rise across the board

A recent analysis of the consumer portal Verivox, reported by the Friday edition of Handelsblatt noted: “About 13 million people live in the affected areas. Households will have to pay more than 100 euros per year. Only 13 utilities lowered prices.”

A family with a representative annual consumption of 20 000 kilowatt hours (kWh) currently pays 5,85 cents per kWh – and in January 2019 it will be 5,95 cents. In January 2018, one kWh had cost 5,75 cents.

“For almost five years, gas prices have only been going in one direction: down. Since the middle of the year, the trend has changed and consumer prices are picking up again,” said Verivox energy expert Valerian Vogel. This is due to the wholesale prices for gas, which had climbed by about 30 percent in 2018.

German energy concern RWE AG meanwhile plans to buy more US liquefied natural gas after signing two contracts this year.

Germany’s biggest power producer agreed on expensive supplies of US-produced LNG for the next couple of years and is negotiating longer-term agreements, according to Andree Stracke, the chief commercial officer at the company.

The US is eager to sell more gas to Germany, with President Donald Trump repeatedly calling on Europe to buy American LNG, Bloomberg reported. Trump has also called Germany a “captive” because it imports 51 per cent of its natural gas from Russia.

But a completed Nord Stream 2 gas pipeline, circumventing Ukraine, removes Kiev’s most powerful incentive to successfully claim “aggression” by Moscow.

The US has been shaking up the global energy market in response: From exporting virtually no LNG three years ago, the US wants become an emerging global gas power to counter Russian gas sales to Europe.

“We are building up a worldwide, significant portfolio of LNG,” Stracke said, but declined to provide details of its transactions. “Will this LNG arrive in Germany? No, because we don’t have a terminal. Will it arrive in Europe? Maybe.”

Gas imports to Europe are set to rise almost 20 percent by 2040 from 2016 levels, according to the International Energy Agency. Germany is Europe’s biggest gas consumer.

German electricity prices for residential and business consumers are already the highest in the European Union together with Denmark.

Germany has repeatedly said that cooperation with Russia on the Nord Stream 2 would allow diversifying the country’s gas imports, which are becoming increasingly important as the country prepares to switch to alternative sources of energy.

Last month leftist lawmakers in the German and European parliaments signed a letter to Angela Merkel asking her to stop the pipeline.