Basic electricity and gas rates to be reduced in Germany - Approximately 3 million households to get "a breather," what can Japanese households learn from this?

1. Why is there news of "electricity and gas price cuts" in Germany now?

In Germany, energy prices have soared since 2022 due to dependency on Russian gas, making household utility costs a significant political and social issue. The government has introduced measures such as gas storage obligations, price control strategies, and tax reductions to curb price hikes, while also accelerating the transition to renewable energy.verivox.de

Subsequently, as wholesale gas and electricity prices have stabilized, retail rates are finally beginning to reflect these changes as "price cuts." The key point in this report is that the rates for the standard contract known as **"Grundversorgung" (basic supply)** are decreasing.tagesspiegel.de+1

2. What is Germany's "Grundversorgung" (basic supply)?

In Japan, it is similar to the situation where you do not choose your electricity or gas company and simply use the standard menu of the major regional provider. This is what Germany's **Grundversorgung (basic supply)** is like.

• Households without special contracts automatically fall under this basic supply

• The company supplying the most electricity and gas to households in a region becomes the "basic supply provider" for that area

• Across Germany, there are about 800 electricity basic supply providers and about 700 gas basic supply providers.

• It is estimated that about a quarter of households for electricity and about a fifth for gas still have contracts under the basic supplytagesspiegel.de+1

The basic supply system ensures the peace of mind that "someone will definitely deliver electricity and gas," but the price level is often considered "expensive," as consumer groups and comparison sites in Germany have warned.verivox.de+1

3. How will electricity prices decrease? ― 113 companies to cut prices by an average of 9%

According to a dpa (German Press Agency) article and reports from Tagesspiegel, an analysis by comparison site Verivox confirms the following trends regarding basic supply electricity rates.tagesspiegel.de+1

• Among regional basic supply providers, 113 companies have announced they will reduce electricity prices by an average of 9% at the beginning of the year.

• For a standard household using 4,000 kWh annually, this equates to a saving of 161 euros (about 26,000 yen) per year.

• The beneficiaries are about 2.2 million households (those contracted under the basic supply for electricity)

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• On the other hand, 4 companies plan to increase prices by an average of 1%, meaning not all households will see a decrease

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3-1. Specific examples: Cases in Cologne and Mannheim

The article also mentions specific regional names.tagesspiegel.de+2rheinenergie.com+2

• Rheinenergie in Cologne (Köln)

  • will reduce basic supply electricity prices by about 12% from January 2026

    .

  • The price per kWh will be 31.48 cents.

  • They explained that due to the decline in wholesale prices and federal subsidies for grid costs, "this benefit will be promptly passed on to customers."
    
    

• MVV in Mannheim

  • will reduce basic supply electricity prices by about 11%

    .

  • The new price will be 34.82 cents per kWh

An energy expert from Verivox commented, "National subsidies for grid usage fees are reflected as electricity price reductions for many households." However, it is also pointed out that grid fees do not necessarily decrease uniformly nationwide, and some providers may not reflect the subsidies in their prices, leading to potential regional disparities in benefits.tagesspiegel.de+1

4. What about gas prices? ― 69 companies to cut prices by an average of 7%, benefiting 700,000 households

Verivox also indicates the following trends for gas prices.tagesspiegel.de+1

• For gas prices under the basic supply, 69 companies have announced an average price cut of 7%.

• For a single-family household using 20,000 kWh annually, this equates to an annual saving of about 183 euros (about 30,000 yen).

• The beneficiaries are approximately 700,000 households

• On the other hand, 10 companies plan an average price increase of 6%.
  
  

In the gas market as well, the stabilization of wholesale prices is cited as the main reason for the price cuts. Additionally, the abolition of the gas storage levy (Gasspeicherumlage) is seen as offsetting the rise in network usage fees, creating an environment where "it is easier to lower gas prices" overall.tagesspiegel.de+2verivox.de+2

As specific examples, Rheinenergie and Stadtwerke München in Munich are reducing gas prices by about 8%, while in Mannheim, gas prices remain unchanged, highlighting regional differences.tagesspiegel.de+2rheinenergie.com+2

5. Why are some households seeing price increases despite the "price cuts"?

While the statistics show that "more companies are reducing prices," some households will still receive **"notices of price increases."** Several reasons can be considered for this.

1. Differences in regional network usage fees

   • The network usage fees for electricity and gas transmission vary significantly by region, and these changes directly affect prices.

   • In some regions, fees may decrease significantly, while in others, they may rise and be directly reflected in retail prices.DIE WELT
     
     

2. Differences in procurement timing

   • Companies procure fuel over several years in anticipation of future demand.

   • Companies that have already purchased at high prices may have little room to reduce prices and may even be forced to increase them.
     
     

3. Differences in business strategy and revenue assurance

   • Grundversorgung is not originally the "cheapest" plan, and some providers may choose not to lower basic supply prices much to maintain a price difference with other cheaper online plans.verivox.de+1

6. Grundversorgung is "reliable" but tends to be "expensive"

Comparison sites like Verivox have long pointed out that households that remain under the **"basic supply often end up 'losing out.'"**

• In the first half of 2025 alone, German households paid approximately 3 billion euros (about 480 billion yen) more in electricity and gas bills, which could have been saved by switching from basic supply to cheaper plans.verivox.de+1
  
  

• Another analysis suggests that switching to a cheaper contract could save households over 1,600 euros annually.morgenpost.de

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