Longterm outlook for German power prices

Electricity is getting cheaper again, but remains expensive in international comparison

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Thu Lan Nguyen, Barbara Lambrecht

Commerzbank Economic Research

December 1 2023

Despite the recent fall in electricity prices, they remain high by both historical and international standards. In view of the high costs of the energy transition, prices even threaten to rise in the coming years.

After the end of the transformation, however, the very low (variable) costs of generating "green electricity" give reason to hope that costs will fall, even if higher system costs, such as for reserve capacities, will probably offset a considerable part of this advantage. Electricity prices are therefore likely to fall again, but remain a competitive disadvantage for the German economy.

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