Starting January 1, 2025, the price cap on household gas prices will come to an end, and the electricity price cap will be adjusted under Bill No. 8428, resulting in higher electricity costs for households. Moreover, subsidies for wood pellets and heating oil will also be phased out.

Prime Minister Luc Frieden announced the partial end of the energy price cap during his State of the Nation address in June 2024. He justified the decision by stating that prices were returning to normal, allowing the cap to be phased out starting in 2025.

That’s not entirely correct. Gas and electricity prices remain well above the levels seen before Russia’s invasion of Ukraine. Gas prices have been steadily climbing in recent months, and as we know, electricity prices are closely linked to gas costs. Geopolitical uncertainties and ongoing conflicts are unlikely to lead to a reduction in these prices.

What does this mean for households?  

The Chambre des Salariés, based on figures from Statec, has calculated that an average household heating with gas will have to pay €640 more for energy in 2025 compared to 2024. For households that have invested in renewable energy and heat with a heat pump, the increase will be even higher, reaching €1,070 next year.

This means that all households will be affected, facing significantly higher costs for their basic energy needs. Moreover, households that consume more electricity because they’ve transitioned to renewable or electric-powered technologies (such as heat pumps or electric cars) are now being financially penalized. This approach fails to create an incentive for the energy transition, especially considering that government subsidies for technologies like photovoltaics have also been reduced.

Incoherence of the government.

The government is acting inconsistently by, on one hand, allowing households that have already invested in the energy transition to face significantly higher electricity prices, while on the other hand, reducing subsidies for photovoltaic systems and electric cars. Until now, the approach was to encourage investments in clean energy and energy-efficient devices through pricing and public subsidies. However, the current government is doing the exact opposite—making these investments less attractive. The ambition to replace gas and oil heating systems has also been lowered in the new National Energy and Climate Plan (PNEC), a decision that aligns with this overall trend.

Therefore, we cannot see that the government is making an effort to reduce dependence on energy imports and fossil fuels by offering citizens an attractive climate protection plan. On the contrary, it is even making climate protection more difficult.

Confusion over electricity prices from 2025 onwards.

The new electricity pricing structure, presented by the ILR a few weeks ago, adds further confusion and uncertainty for households. We have criticized this decision, particularly the timing, as it coincides with the partial end of the electricity price cap on January 1, 2025, effectively imposing a price increase on citizens. This, of course, does nothing to build trust among the public. Furthermore, the new pricing structure is especially risky for those who have already made investments in new technologies, such as electric cars or other energy-efficient devices.

It is also counterproductive that subsidies for photovoltaic systems and batteries have been reduced since October, as this very infrastructure could enable households to use electricity during peak times, for example, from a battery that was charged during the day.

Extend the energy price cap for one full year!  

For the reasons mentioned, déi Lénk are calling for an extension of the current energy price cap into 2025. The government should wait until prices have truly returned to pre-crisis levels before subjecting households to steep energy bills starting in January.

Déi Lénk have launched a petition calling for this extension.

Of course, the state shouldn’t finance a price cap indefinitely. The priority should be for the government to strengthen funding for the energy transition, rather than doing the opposite, as is happening now. Only by significantly expanding renewable energy production, both publicly and in the hands of citizens (e.g., through cooperatives), can we gradually reduce our dependence on international energy markets, which set arbitrary prices and always operate in the interests of large investors and speculators.

Watch our press conference to learn more about the topic of the energy price cap.