ZEW Energiemarktbarometer (Energy Market Barometer) - Economic Crisis Only Temporarily Deflating Increase In Energy Prices In Germany

The economic crisis continues to keep the prices at the German energy markets at bay. Prices for electricity, raw oil, gas and coal are going to remain the same in the next six months. This is good news for firms and consumers in Germany. However, prices for these energy carriers are expected to rise in the next five years. These are the findings of the latest ZEW Energy Market Barometer, which surveys around 200 energy market experts and is conducted by the Centre for European Economic Research (ZEW) every six months.

For the next six months, 61 percent of survey participants expect that the energy price in Germany is going to remain the same. About 24 percent of experts, on the other hand, expect an increase of prices for electricity. Around 15 percent of experts predict a decrease in energy prices. Thus, the economic crisis does not seem to be reflected in decreasing energy prices. Even though there has been a decrease in prices at the European Energy Exchange in Leipzig since mid-2008, the consumer prices have not been reduced yet.

The economic crisis has affected the prices for raw oil considerably. In the previous survey, one third of experts expected an increase in oil prices in Germany, whereas the clear majority of experts (66 percent) expected stable oil prices for the following six months. Only three percent of survey participants held the opinion that decreasing prices for oil were likely. This survey was conducted in May 2009, before the latest peak of oil prices in June. Thus it can be assumed that there will not be any further increases in prices for raw oil in the foreseeable future.

Three quarters of energy market experts expect that the prices for the energy carrier coal will stay the same in the next six months. Around 15 percent predict increasing prices, 12 percent decreasing prices for coal.

Compared to the previous ZEW Energy Market Barometer, price expectations for natural gas have slightly stabilized. At the beginning of 2009, more than 50 percent of experts expected a decrease in prices for natural gas. Now a majority of 53 percent consider stable prices for natural gas to be likely. Only around 29 percent of experts expect short-term lower gas prices, 18 percent predict a decrease of gas prices in the long run. This is the delayed adjustment of gas prices to the volatile development on oil markets.

However, a clear majority of survey participants expect that, in the next five years, energy in Germany is going to become more expensive. More than 90 percent of energy market experts hold the opinion that prices for electricity, raw oil and natural gas are going to increase in the medium term. Less than 10 percent of experts expect stable prices. Only a miniscule minority thinks there will be a decrease in prices for electricity, oil and gas.

The majority of experts also predicts increasing prices for coal in the medium term. 80 percent of experts expect an increase in prices in the next five years. Around 17 percent predict stable prices and about three percent of experts expect decreasing prices for coal.

Contact

Nikolas Wölfing, Phone: +49/621/1235-217, E-mail: woelfing@zew.de

Prof. Dr. Andreas Löschel, Phone: +49/621/1235-200, E-Mail: loeschel@zew.de