Industry to benefit from lower electricity prices in 2025

13.01.2025

Source: E & M powernews

On average, electricity prices at the medium voltage level fell by 15 percent over the past year. This was reported by the German Association of Energy Purchasers (VEA).

Wholesale prices for electricity fell by 29% on an annualized basis in the second half of 2024; in addition, since this year, the legislator has relieved grid operators with a disproportionately high number of renewable energy plants of grid fees. Overall, this will lead to falling electricity prices at the medium voltage level, for example for industry, reported the German Association of Energy Purchasers (VEA) on January 10, 2025.

And this will only have a positive financial impact on industry this year, as the contracts negotiated and collected in the second half of 2024 have been in the supply phase since the New Year.

The VEA also lists shifts in electricity prices between 50 different grid areas for the first quarter of this year. According to the report, the largest percentage price reductions are in the grid area of Wemag Netz, based in Schwerin (-31.8 percent), Schleswig-Holstein Netz, based in Quickborn (-28.5 percent) and Edis, based in Fürstenwalde (-24.6 percent) - all grids with above-average costs due to a particularly large number of new renewable energy installations.

Of course, the industrial electricity does not come from these grid operators, it is only transported by them, but the grid fees they charge for it are uniform in their respective grid areas and therefore lead to similar industrial electricity prices within the grid.

The smallest price decreases can be observed in the grid area of AVU Netz, based in Gevelsberg (-7.6 percent), EWR Netz, based in Worms (-8.0 percent) and Pfalzwerke Netzgesellschaft, based in Ludwigshafen (-8.4 percent).

Electricity is now cheaper in the east

The nationwide equalization of grid expansion costs due to the energy transition means that electricity prices in the new federal states are lower than in the old federal states: For example, the average electricity price in the new federal states is 17.77 Ct/kWh, which is 0.69 Ct/kWh or 3.7 percent lower than the average price in the old federal states (18.46 Ct/kWh).

The difference between the cheapest grid area (EWE Netz at 15.94 Ct/kWh) and the most expensive (Netze BW based in Karlsruhe at 20.24 Ct/kWh) is 4.30 Ct/kWh or 27.0 percent.

The prices listed in the table take into account all costs for the respective grid usage, electricity procurement, the KWKG, the Section 19 StromNEV levy, the offshore levy and the disconnectable load levy, the concession fee (KA) and a standard market margin for the supplier. Only the electricity and VAT are payable by the customer in addition.

Background to the VEA electricity price comparison

The price comparison covers a total of 50 large grid areas in Germany. This covers a considerable part of the German electricity grid. The VEA has been publishing the comparison since January 2002 for individual grid areas in 15 typical medium-voltage supply cases. The prices quoted are based on full electricity supply contracts with a contract start date of January 1, 2025 and a term of twelve months, which companies concluded in the second half of 2024.

Author: Susanne Harmsen