Analysis of policy measures to support household customers in times of high electricity prices

Electricity prices rose dramatically in Germany and Europe last year. The price increases are particularly painful for lower-income households and therefore raise questions of fairness and redistribution. In addition, an affordable electricity price is essential if we are to increase the use of electricity for heating or electric mobility in the future.

Against the backdrop of the discussion on relief measures in Germany, Agora Energiewende has commissioned the consulting firm Compass Lexecon to analyze possible short-term interventions to reduce the price of electricity for end customers.

The measures are differentiated according to whether they are aimed at retail prices (policy interventions in electricity retail markets) or whether they create additional revenues by intervening in the wholesale market or in the tax system (policy interventions in electricity wholesale markets).

In addition, the study provides an insight into measures already implemented in other EU member states and in Great Britain in the form of case studies.

Aside from considering macroeconomic criteria, the analysis focuses on whether measures quickly benefit vulnerable household customers and assesses their impact on German and European climate targets. Specifically, it analyses whether incentives for energy savings and energy efficiency will remain in place and whether the targeted electrification is supported.

An evaluation in the form of an impulse paper by Agora Energiewende can be found here: