Germany faces rising energy costs from gas subsidies and market volatility

A study by the Forum Ökologisch-Soziale Marktwirtschaft (FÖS), commissioned by Deutsche Umwelthilfe (DUH), warns that Germany's plan to build new fossil gas power plants could cost consumers significantly. Subsidies for these plants could reach up to 33 billion euros over 15 years, funded through levies on electricity consumption. Additionally, the study estimates that climate damages resulting from these plants could cost society between 19 billion and 127 billion euros by 2045, particularly due to methane emissions in the supply chain.

Separately, European wholesale gas prices have risen by more than 20 percent since early August, driven by geopolitical tensions in the Middle East. While gas providers often pass on costs with a delay, experts warn that the 2026/27 heating season could be expensive due to low storage levels and market volatility. For an average household consuming 20,000 kWh annually, a price increase of two cents per kilowatt-hour would result in 400 euros in additional yearly costs.