Two German power retailers are exiting Germany’s household market, forcing about 300,000 customers to find new suppliers as surging wholesale electricity costs put pressure on the industry.

By Petra Sorge and Eva Brendel Green-energy startup Grüüün said last week it would withdraw from the residential market by the end of the month. Stromee, a Berlin startup founded in 2022, followed suit this week, according to a local media report. Customers will have to switch to other suppliers or fall back on potentially more expensive replacement contracts.

The exits are an early sign of stress in a sector that was hit hard during the 2022 energy crisis, when dozens of smaller power and gas suppliers collapsed after being caught out by record prices. Rules have since been tightened, but companies that rely heavily on short-term markets rather than securing supplies in advance remain vulnerable to sudden spikes.

The average German day-ahead power price soared more than 50% from a year earlier last quarter, with the increase reaching 74% in September. Higher gas prices, low hydro reservoirs and river levels, and restricted nuclear availability elsewhere in Europe have all contributed to the increase in electricity costs.

The elevated prices are set to continue into winter. Earlier this week, German power price futures for January rose above €200 a megawatt-hour for the first time. Prices have since edged lower, but winter contracts are still trading near the €200 mark.

In 2022, when Russia curbed pipe gas shipments to Europe after the invasion of Ukraine, energy suppliers and traders across the continent went bankrupt. Among the biggest casualties was UK’s Bulb Energy Ltd., which supplied about 1.7 million customers. European governments allocated hundreds of billions to shield consumers and companies.

Neither Grüüün nor Stromee has declared insolvency. Both sought to attract customers with flexible contracts and low prices.

Grüüün — an affiliate of Münch Energie Gruppe — urged its about 200,000 customers to switch providers from November, according to a statement on its website.

The company blamed “several political decisions made in recent months” for the situation, including a set of controversial renewable energy and grid reforms, “which will hinder the generation of green electricity for years to come.”However, these law packages are still under discussion in parliament.

“There are serious doubts as to whether the reasons cited by Grüüün can justify the termination of current contracts without notice,” said Hasibe Dündar, an energy law adviser at the Consumer Advice Center. The organization advised consumers to seek compensation.

Stromee entered the spotlight this week after SWK Energie GmbH, a local utility in western Germany, said Wednesday that it had taken over power and gas customers “in the low five-digit range.”A spokesperson for SWK declined to comment beyond its press statement. Stromee didn’t respond to a request for comment.

Germany’s Federal Network Agency said it continuously monitored whether suppliers are complying with their obligations under energy law, and may take regulatory action in case of violations.