Wholesale Prices Fall, But Energy Costs May Still Increase
Despite falling wholesale prices, German energy customers should still expect price increases this year. Eon, the country’s largest energy supplier, has not ruled out further price hikes. CEO Leonhard Birnbaum stated that “in the long run, we have to pass on the wholesale prices to our customers.” Last year, the company only passed on around 30% of the extreme price increases in wholesale.
The recent price increases for electricity and gas were due to increases in wholesale prices last year. Consumer advocates had called for medium-term gas price reductions, but Birnbaum noted that most of Eon’s previous price increases were not passed on. The company has around 14 million electricity and gas customers in Germany, and some may hope for price reductions. However, certain customers could see further price increases before the summer.
Eon Announces Strong Financial Results and Expands Investment Program
Eon confirmed its net profit for 2022 of 2.7 billion euros, a 9% increase since the beginning of February. The company’s core business of sales and distribution networks saw earnings rise by over 10%. Additionally, the network business saw significant growth due to increased investments and subsequent earnings effects.
Birnbaum spoke of a “strong result” and announced an expansion of the company’s investment program. By 2027, Eon aims to increase investments by around 6 billion euros to 33 billion euros, with the majority of the additional amount flowing into energy grids. The Executive Board explained that the investment expansion is necessary due to increasing demand resulting from the expansion of renewable energies.
Overall, while wholesale prices are falling, energy customers should still expect price increases. Eon’s investment expansion aims to satisfy growing demand, but in the short term, customers may see further price hikes.
