When the "double boom" was heard in the Chancellery in September, there was a mood of alarm in Berlin.

The European wholesale price for gas rose to more than 340 euros per megawatt hour at the end of August.

It was more than four times as high as before the start of the Ukraine war.

Politicians feared a hot autumn with civil protests.

This is how the 200 billion euro “defensive shield” and its core elements came about: the price brakes for gas, district heating and electricity.

Julia Loehr

Business correspondent in Berlin.

  • Follow I follow

But at least when it comes to gas, the situation has eased.

The well-stocked storage facilities and the mild weather caused the wholesale price to drop to below 70 euros per megawatt hour last week.

It will take a while for this development to be reflected in end customer prices.

But here, too, things are going down noticeably.

According to the comparison portal Verivox, an average of almost 22 cents per kilowatt hour was called for in new contracts in September, while the average in December was only 16.4 cents.

Recently it has risen again somewhat, but if you compare the prices, you will find contracts for 13.5 cents per kilowatt hour in Frankfurt, for example.

That comes close to the gas price brake.

The subsidized gas price down to 12 cents, for 80 percent of the previous year's consumption.

According to Veronika Grimm, member of the Advisory Council, the need for financing from the Economic Stabilization Fund (WSF) could also shrink significantly as a result of falling prices.

"If the prices remain so low, for example because it stays relatively warm and a lot of gas is saved, then significantly less money should be needed for the state cost controls than planned in the WSF," Grimm told the FAZ. How much less depends on further price developments away.

"But it could well be in the high single-digit billions," Grimm estimates.

Utilities who stock up on the spot market are now lucky in their misfortune.

However, retail prices will remain high for providers who have concluded long-term contracts in recent months.

56 billion euros – but for what?

Customers will not feel the gas price brake until March.

Then suppliers should credit them with the state subsidies – even retrospectively for the months of January and February.

It is initially only valid for the year 2023, but the law provides for an extension until April 30, 2024.

The Ministry of Economics expects total expenditure of 56 billion euros including district heating for this period.

The ministry does not say how this number came about, or what average contract prices were used in the price brake calculations in Berlin.

Just this much: “The main influencing factors were the futures market prices for electricity and natural gas from autumn 2022.” A spokeswoman said on request that there was no updated simulation of funds requirements because of the time involved.

However, there is currently no expectation that there will be a significant reduction in demand compared to previous planning.