Eon boss expects rising electricity and gas prices for consumers
VAT on gas is rising this year and a planned subsidy for transmission providers is likely to be dropped. According to the head of the energy company Eon, this will be reflected in prices for consumers. The situation in the Middle East could make the situation even worse.
The head of energy company Eon, Leonard Birnbaum, expects electricity and gas prices to rise in 2024. "After the previous price reductions, electricity and gas may become more expensive again from 2024," Birnbaum told the Rheinische Post newspaper. The causes are the increase in value-added tax for gas and the discontinuation of the damping of the transmission system operators' grid fees on electricity prices. "In many cases, the end of the price brake will have an additional effect."
According to the preliminary report, Birnbaum expects all suppliers to pass on the increase in taxes and grid fees: "These are politically induced surcharges that all suppliers will have to pass on to gas and electricity customers. Perhaps not immediately, but probably in the coming months." Should there be an escalation in the Middle East, this would also have an impact on all energy markets.
Compared to the record prices in the fall of 2022, there has been a significant decline, said Birnbaum. "But prices are still around twice as high as before the crisis. The wholesale price for electricity was €50 per megawatt hour at the start of 2021 and is still almost €100 today." The E.ON CEO does not expect prices to fall back to 2021 levels. "Although generation from wind and solar costs comparatively little, the hedging - keyword dark doldrums - through storage or new gas-fired power plants and the connection of the many decentralized energy transition plants nevertheless increases the overall cost of supply."
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Eon's predictions of rising electricity and gas prices for consumers are partly due to the increase in VAT for gas and the potential discontinuation of a subsidy for transmission providers. As Leonard Birnbaum, the head of Eon, stated, these changes could lead to increased costs for consumers, potentially requiring all energy suppliers to pass on the additional fees. If there's an escalation in the Middle East, it could further impact all energy markets, causing prices to potentially spike even higher.
Source: www.ntv.de
