Dynamics on the electricity market: what is behind the price increases

Dynamics on the electricity market: what is behind the price increases

The network charges are now an essential driver of electricity prices. © Teerapon, Stock.adobe.com

Electricity prices in Germany are also among the highest worldwide in 2025. Despite the intermediate relaxation of the wholesale prices, the price level remains high – including through increased network charges and new levies. The dynamic on the electricity market is complex and complex. If you want to understand the causes of the recurring price jumps, you have to look at several levels: from the international raw material situation to political interventions to structural problems within the energy industry.

Electricity market under excitement: a decade of the increasing price

Electricity prices have increased continuously for years. In 2015, the average price for budgetary current was around 27.5 cents per kilowatt hour. Ten years later, it is an average of 35.86 cents – an increase of almost 33 percent. The largest price jump took place in 2022 and 2023, triggered by massive faults on the energy markets. The war in Ukraine has shaken the international raw material markets and significantly increased gas and coal. This development continued directly on the electricity exchanges, where the prices in the top reproduce.

Infographic for electricity tariffs worldwide (as of 2024)
Source: globalpetrolprices.com – de.statista.com

Wholesale prices fall – but end customers feel little

In 2023, prices in electricity wholesale went back. However, the hope of falling end customer prices was only partially fulfilled. Some suppliers were able to pass on the cheaper purchase prices to their customers, but other cost areas attracted at the same time. At the turn of the year 2023/2024, electricity network fees rose by around 25 percent – a significant price driver.

In January 2025 there are again regional differences in electricity prices. The network fees were slightly lowered again in some regions, but on average only by 2.5 percent. New levies also provide additional loads. The Electricity prices have risen by almost 33 % – compare at tariffcheck.de So it is worth discovering possible savings potential.

Political interventions with a limited effect

The abolition of the EEG surcharge in summer 2022 was originally supposed to bring relief. In practice, however, this measure could only cushion the price increase, did not stop. Political instruments such as price brakes or subsidies often work at short notice, but cannot solve structural problems. The energy market remains shaped by uncertainties – also because political framework conditions change quickly and investments in infrastructure do not keep pace.

Power grids as a cost factor

The network charges are now an essential driver of electricity prices. The expansion and maintenance of the Power grids cause high costs that are flipped to households. In particular, the necessary conversion for the integration of renewable energies leads to increasing expenses. The energy transition not only brings technical challenges, but also changes the cost structure within the supply system.

New high -voltage lines, intelligent control systems and the conversion of decentralized networks are investments that have an impact on the electricity bills for years. The increasing power consumption through electromobility and heat pumps also requires a network infrastructure that becomes much more powerful and therefore more expensive.

Regional differences tighten the situation

While some regions in Germany have comparatively cheap network charges, the costs in other areas are significantly higher. Anyone who lives in rural areas often pays more – not because of higher consumption, but because of the lower density of customers per network section. This inequality means that electricity is noticeably more expensive in some federal states than in others.

International ties: The electricity market knows no boundaries

Even if electricity is produced locally, the market has long been shaped by European. Cross -border trade, coupled power exchanges and common network regulations ensure that events in neighboring countries can have direct effects on prices in Germany. Especially in times of crisis, it shows how closely the European energy system is interlinked.

Demand, supply and uncertainty

The electricity prices are sensitive to fluctuations in supply and demand. Extreme weather eventsPower plant failures or geopolitical tensions can lead to bottlenecks at short notice – with a direct impact on the price.
The uncertainty itself becomes a driver: the expectation of possible bottlenecks can increase the prices on the stock exchanges. In addition, electricity can hardly be made – which makes short -term demand to cushion even more difficult. The increasingly speculative trade in the energy markets also helps to make price outlets more violent and more difficult.

Renewable energies: curse and blessing at the same time?

The generation of electricity from wind and sun is basically cheaper than that of fossil sources – at least in the long term. In the short term, however, strong fluctuations in the feed -in lead to volatile prices. If there is no sun or wind, expensive reserve power plants often jump in. As long as the storage technologies are not mature, this volatility remains a problem.

Consumers in the pliers

The household that pays the invoice remains between market logic and political control. The possibilities of actively influencing your own electricity price are limited. The change of the provider or the switch to self -sufficiency (for example through photovoltaics) can help – but is not implemented for everyone. The electricity market of the future must be more transparent, predictable and socially just if electricity should not become a luxury goods.

Outlook: relaxation in sight?

A return to lower electricity prices is currently not in sight. There is hope that wholesale prices stabilize and that the network costs will also decrease in the long term through efficient investments. But the pressure on the market remains high in the medium term. If you want to keep electricity affordable, you have to start on several levels: more speed in the expansion of network, stable political framework and a fair distribution of costs between industry, state and households.

04/25/2025

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