Switching providers for electricity and gas came to a standstill in 2022. Wholesale prices have been falling again for a few weeks. Do households now have more choice?
During the energy crisis last year, electricity and gas prices for households mostly only knew one direction: upwards. Those who wanted to change were often unsuccessful: “Many new customer contracts became significantly more expensive than existing customer contracts as a result of the sudden massive price increase on the trading markets,” says energy market expert Mirko Schlossarczyk from the consulting firm Enervis.
Also, many energy suppliers would not have accepted any new customers at all due to the uncertain market environment. After all, consumers were also extremely unsettled by the insolvencies of low-cost providers. For Udo Sieverding from the North Rhine-Westphalia consumer advice center, one thing is certain: “In 2022, the change in provider came to a standstill.”
Cheaper tariffs
But how is it now after wholesale prices for electricity and gas have fallen in recent weeks? “Currently, new customer contracts tend to be cheaper than existing customer contracts,” says Schlossarczyk. The comparison and brokerage portals Check24 and Verivox, which earn their money with commissions from energy companies, among other things, confirm this: “Recently, the prices for new customers for electricity and gas have really collapsed,” says Verena Bloche from Verivox. At the same time, the prices of the basic suppliers have risen significantly. “With the return of the savings potential, we are again observing a significant increase in switching activities.”
Check24 goes even further: “Within a few weeks, the exchange volume has risen to the pre-crisis level throughout Germany,” says Energy Managing Director Steffen Suttner. “In January 2023, the number of changes was even at a record level and thus similar to January 2021.”
Number of providers increased again
But how big is the offer? How many electricity and gas tariffs can households choose from on average? Sieverding estimates the current figure at 50 to 60 different tariffs after only around 20 at the height of the energy crisis last year. Before the crisis, however, there were 120 to 130 different tariffs, and even more for electricity, says the energy expert.
Check24 also sees an increase in the number of providers: “There are again more than twice as many providers active in sales as there were a year ago,” says Suttner. Verivox also notes “many more offers than two months ago”. The number of providers for electricity and gas is not yet back to the pre-crisis level, “but at around 80 percent”. However, the offer varies greatly depending on the region.
According to Suttner, municipal utilities are also involved again after their national tariff offers had decreased last year. Stadtwerke are currently starting to sell new customers almost every day, he says and states overall: “Due to the increased number of providers, the competitive pressure has increased and prices have fallen significantly.” Network Agency President Klaus Müller had recently wished for “reasonable competitive pressure” “so that ultimately prices can fall again at some point”.
On hold
The experts assume that not all those willing to switch will do so immediately: “Forecasts, in particular of further falling gas prices, could mean that some consumers are still waiting and speculating that gas prices will continue to fall,” says Schlossarczyk.
The price brakes on electricity and gas until after the winter of 2024 also offer a certain security in terms of further cost increases. “That may reduce the incentive to switch.” Sieverding also thinks it is possible that there will be a “further relief boost” in wholesale. With gas, for example, you could wait four weeks “to see how we’ll get through the winter.”
When changing, you should think carefully about which provider you go to, warns the consumer advocate. “If you want to be on the safe side, you should choose a larger company or a subsidiary of a municipal utility.”
Source: Stern
