Energy poverty grows

In 2020, electricity prices in Germany are expected to rise by 5.5 percent on average, further worsening the concrete living conditions of poorer people. Due to rising prices, more and more German citizens can no longer pay their electricity bill. The number of current barriers has risen to the highest value ever measured. The Federal Network Agency reports for 2018 of 344,000 households in which the light went out and over six million threatened power cuts.

Electricity meter

Particularly affected by energy poverty are all those people who depend on benefits of basic security or work in precarious employment relationships. For them, electricity has become a luxury item that they can hardly afford. If you have to spend more on heating, hot water, lighting and running your fridge and TV, you have less money left over for food, clothing or education.

At the current barrier there is no light, mostly also no hot water and no heating. The refrigerator no longer cools, phone calls are also not possible and those sitting in the dark can usually no longer prepare warm meals.

According to common jurisprudence, an apartment without electricity is simply uninhabitable. However, a key factor for the emergence and development of energy poverty is the level of energy prices. A lot has happened since the mid-1990s.

The energy supply companies (EVU)

The German electricity market is now characterized by a large variety of actors. At the beginning of 2018, Private electricity customers had the choice between 1,251 electricity providers with almost 15,000 tariffs. On average, a private household customer can choose from 167 electricity suppliers at their place of residence.

In 2015, the market share for the Big 4 energy companies was 62 percent – RWE with 21 percent, closely followed by E. ON with 15 percent and the tail lights Vattenfall and EnBW – both with 13 percent each – so the big companies are steadily losing their shares. Gross electricity consumption on the electricity market is also declining overall.

When “liberalisation” also began in the energy sector in 1998, there was initially a decline in energy companies. From 2002 on, their number increased rapidly, mainly due to the many new start-ups of electricity distribution companies, the market regulation of electricity retailers and also due to the “Legal Unbundling”, which is the legal unbundling of electricity generation and grid operation. In addition, there have been 72 new municipal utilities since 2005 as part of a re-communalization.

Despite the loud ringing in the coffers of the large corporations in 2018, at RWE AG (turnover: 26.3 billion euros), EnBW AG (turnover: 21.2 billion euros), E. ON SE (turnover: 19.4 billion euros), Vattenfall GmbH (turnover: 16.4 billion euros), almost one in four jobs was cut at the industry giants.

Power lines

The distributional struggle between capital and labour, which began in 1998, has also been clearly decided in favour of capital in the energy sector. In detail, this looked like this in 2013 (newer figures could not be determined) :

The high sales growth at the four industry giants is mainly due to international expansion, the opening up of new energy services and the enforced price increase in the private household sector. Profits rose by 180.9 percent for energy company shareholders from 1998 to 2013, but the incomes of employees who remained in the industry rose by only 31.2 percent.

Profits will probably be somewhat reduced in the future by the pressure on conventional power generators, which comes from the expansion of renewable energies. The four industry giants have also had to bid for the emission rights for their fossil – fuel power plants on the stock exchange since 2013-until then they had received the majority of them as a gift.

Profit over life

Energy consumer

There has been no reduction in electricity prices for private households in the past 20 years. On the contrary: since the turn of the millennium, the average electricity price for households has risen from 13.94 to 30.43 cents per kilowatt hour in 2019. This corresponds to an increase of 118 percent or 6 percent per year. The general rise in consumer prices, on the other hand, amounted to only 27.0 percent in the same period. The electricity costs of private households are around 45 percent higher than the EU average of 20.52 cents per kilowatt hour.

Well over 50 percent of the electricity price consists of taxes, levies and levies. One of the biggest chunks, in addition to taxes amounting to just under 23 percent, is the renewable energy sources act (EEG) levy, which in 2019 alone accounted for 21 percent. This levy is now to be increased by 5.5 percent.

With regard to the EEG levy, one must know that this is not paid by everyone, but that the industry, which consumes particularly much electricity, can largely free itself from this levy.

From an ecological point of view, the EEG surcharge seems to make sense, since it is intended to finance and promote renewable energies. Unfortunately, however, the Motto is here, the small one hangs, the big one lets run. It would be much more important to ask the big electricity consumers to pay for the energy transition than the households, which use little electricity anyway, because they can hardly afford it.

At 6.27 cents per kilowatt hour, on the other hand, the industrial electricity price adjusted for levies is well below the EU average of 9.37 per kilowatt hour.

Several utilities have already announced further increases in household electricity costs for 2020. The main reasons for the price increase are the rising costs for the electricity grids and the increase in state fees, such as the green electricity Levy and the so-called Offshore liability levy, which finances compensation payments for wind farms that are connected to the grid too late.

Per kilowatt hours, 2 cents of electricity tax are also charged, which is again calculated with 19% VAT. So the state intervenes twice.

Energy poverty

The adequate supply of electricity is a basic prerequisite for ensuring a decent life. It is only through secure energy supply that the participation of people with low incomes and recipients of livelihood benefits in social life is made possible. The support offered for energy saving is commendable but not efficient and does not eliminate the systematic under-coverage due to too low demand shares in the standard rates for household energy or for the purchase of energy-efficient appliances.

There is no uniform Definition for energy poverty in Germany. However, one can orient oneself to a Definition of energy poverty common in Great Britain. On the island, a household is considered to be low in energy if it has to spend more than ten percent of its income on the purchase of energy to ensure 21 degrees Celsius in the main living room and 18 degrees Celsius in the remaining rooms.

In 2018, a total of 344,000 power shutdowns were carried out and over six million were threatened. This affected around 200,000 households who have to receive Social Security benefits.

The central cause of energy poverty is poverty itself.

Especially in low-income households, the cost of electricity and Gas can quickly grow into a life-threatening factor. This development is expected to continue in the coming years. Here, the view of households that receive benefits according to SGB II (so-called unemployment benefit II) or SGB XII (social assistance or basic security in old age and in case of incapacity) is particularly important.

In order to secure their livelihood, the beneficiaries receive a monthly lump sum, the so-called standard requirement, within the framework of SGB II and SGB XII. This is determined every five years on the basis of the income and consumption sample (EVS) and adjusted annually to the development of prices as well as wages and salaries.

Since January 2020, a single person receives a monthly benefit of 432,00 Euro. The reasonable costs of accommodation as well as the costs of heating are borne directly by the service provider, so that from the standard requirements in the area of Housing and energy mainly the electricity bill has to be paid and is fixed at 38.00 euros per month.

For decades, it has been criticized that the standard requirements, the standard requirements based on the EVS, do not meet the actual needs of households in basic security.

The consumption behaviour of households in basic security is also of interest from a different perspective. Since households in basic security have a severely limited budget for consumption, their electricity consumption can be interpreted on average as a social Minimum, which must be guaranteed to them immediately under the given technical and social capacities.

We need urgent action to effectively combat energy poverty.

The association Tacheles E. V. demands for a long time the implementation of the following points in the context of the upcoming legislative changes:

The immediate implementation of these demands is also necessary because the offer of assistance for people affected by energy poverty has been systematically curtailed on site and the formerly almost non-profit municipal electricity providers are now behaving extremely “market-compliant” and only supply electricity against 2,500 euros in advance in case of “problem cases”.

There are energy companies that are themselves problem cases. Who are rewarded for their inability with subsidies and compensation. Others are saved from bankruptcy with municipal guarantees and / or loans.