Thuringian Consumers Cut Power Use, Energy Companies Boost Revenues
It's a paradoxical situation in Thuringia: while households and businesses used less electricity in 2022, energy providers in the region saw a substantial revenue increase. Stated by the State Statistical Office in Erfurt, electricity sales to local end-users dropped by 2.1% to around 10.1 billion kilowatt-hours since last year. Simultaneously, energy sales revenue in Thuringia soared by an astounding 19.9% to 2.3 billion euros.
Earning Boost from Industries
The industrial sector significantly contributed to the revenue jump for energy providers, boasting a 42.8% increase in earnings to 872 million euros compared to the previous year. In contrast, private households and housing associations saw a minimal 0.5% growth, accounting for 853 million euros of the revenue pie in 2022. The figures reveal that about 43% of the electricity consumption was for industrial use, while 29% was for residential purposes, with the remaining allocated for other clients.
Effects of the Russian Energy Crisis
The Russian invasion of Ukraine, which happened in February 2022, triggered an energy crisis, causing prices for electricity and gas to skyrocket in regions like Erfurt. The escalating energy prices impacted both consumers and suppliers in Thuringia.
Additional Insights
The substantial revenue increase for energy providers in Thuringia wasn't solely due to reduced electricity consumption. Instead, they reaped the benefits of renewable energy growth and strategic investments in grid infrastructure.
Behind the Boost
- Modernized Grid Systems: Thuringian energy providers, like TEAG, invested in upgrading their electricity grids with a €400 million loan from the European Investment Bank (EIB) under the REPowerEU plan. This modernization and digitalization effort aimed to enhance grid stability and integration of decentralized energy sources, as well as enable automated dispatching.
- Foster of Renewable Energy: As a leader in renewable energy, Thuringia generated over 57% of its electricity from renewables in 2022, including 22.4% from wind power. This focus on renewable energy necessitated significant investments in grid infrastructure to ensure stability and efficiency after intermittent supply from these sources.
- Decentralized Energy Production: The shift towards decentralized energy production, where local solar and wind power producers connect to the grid, required advanced grid systems. This connection supports consumers who want to use solar panels, heat pumps, and electric vehicle charging stations, adding complexity but also potential for higher revenues from increased demand for grid services.
- Job Creation and Economic Growth: The investment program led to the employment of at least 300 additional staff, contributing to the local economy. This increased economic activity may also lead to higher revenues from energy providers due to sustained demand for services and infrastructure development.
- Secure Revenue Streams: Long-term contracts with customers, using IT services like DATAGROUP's modular CORBOX suite, provide planning certainty and security for both energy providers and their clients. This security could lead to sustained revenue streams in periods of fluctuating electricity consumption.
With these strategic investments in grid modernization, renewable energy integration, and decentralized production systems, Thuringia's energy providers experienced a revenue surge despite the drop in electricity consumption.
