One electricity supplier has announced a 500 per cent increase in prices, so a significant proportion of small businesses are unlikely to be able to keep up with costs.

It has recently emerged that there will be another drastic price hike in the energy sector in Germany from 2023, with electricity, for example, set to reach a new historic high. Envia Mitteldeutsche Energie, which claims to be the largest regional operator, has announced that it will increase its electricity tariffs for commercial customers by 500 per cent from January 2023, the newspaper Junge Freiheit reports. Envia has blamed the economic crisis caused by the coronavirus pandemic, among other things, for the increase, but they also believe that „political tensions and crises” are also driving up prices. In addition, adverse weather conditions were also cited as a reason.

„Last year, Germany produced less electricity from renewable energy sources due to the weather. This had to be offset by generating electricity from other energy sources, including natural gas and coal. The steep rise in the price of natural gas and the high cost of certificates for coal-powered electricity generation are making production more expensive,”

the energy giant says in a statement. On another occasion, the company explained the price increase as due to the closure of nuclear power plants. „At the end of last year, three nuclear power plants in Germany were completely disconnected from the grid. This electricity shortfall must also be made up for,” says the electricity supplier. The remaining three German nuclear reactors are scheduled to be shut down at the end of 2022, however, according to a poll commissioned by the BILD newspaper, the majority people now rejects this. 50 per cent believe that it makes sense to return to nuclear power generation in the light of the current energy crisis, with 33 per cent also supporting the construction of more nuclear power plants.

The extent of the price shock problem in Germany is illustrated by the fact that entrepreneurs in East Germany have never been so close to bankruptcy. Many of them are already barely surviving at current prices, and the next increase could be fatal for their livelihoods.

„They want to unplug small and medium-sized enterprises,”

Maik Biedermann, who runs a 35-employee-company that manufactures parts for agricultural machinery, told Bild. Biedermann expects additional costs of half a million euros per year. In his view,

„to earn this amount, we would have to raise prices by 20-30 per cent.”

Such smaller businesses will be at a huge disadvantage after the next price increase and will have to compete on unfair terms with foreign players. „I don’t know if my customers will accept the higher prices or if they will buy abroad in the future, where electricity is cheaper,” Mr Biedermann says.

Strompreis um 500 Prozent rauf!

Wie ein Unternehmer um seine Existenz kämpft

„Die wollen dem Mittelstand den Stecker ziehen“https://t.co/GqAKUOez8x

— Gunther Schnabl (@GuntherSchnabl) June 8, 2022

As V4NA reported recently, the German energy sector has seen such a price rise in recent months that many people are being forced to choose between buying food or paying utility bills. Those who heat their homes with gas in Germany – approximately half of all households – and pay the supplier directly, can still benefit from last year’s price guarantee in the coming months. However, another increase will soon follow, which could mean a hefty extra cost for households once new service contracts are signed.

For a family of four consuming 20,000 kilowatt hours, this means an extra cost of 1,400 euros per year at current prices, according to the Verivox consumer portal. This would mean an increase of 720 euros for a household of two and 300 euros per year for a single person. Moreover, this increase could be even bigger if inflation continues to rise until the new contract is signed.