Relieving energy transition regions of grid charges
04.12.2023 – The share of grid fees in electricity costs in Germany is currently 21.5 percent on average. This considerable contribution to the total costs is distributed very differently from region to region. Grid fees are particularly high where, on the one hand, the population density is low and long lines to comparatively few end customers are required, and on the other hand, where the grid operators have to invest. This is because the investments are passed on to the local population.
Grid operators currently have to invest primarily in regions where the expansion of renewable energies is progressing and wind and solar farms, for example, have to be connected to the grid. People therefore pay high grid fees within their electricity bills, especially where the energy transition is progressing. This is currently the case especially in Schleswig-Holstein, Mecklenburg-Western Pomerania and Brandenburg. In addition to a thin settlement structure, these countries are particularly advanced in the expansion of renewable energies. The share of renewable energies in gross electricity generation is comparatively high – Mecklenburg-Western Pomerania is the national leader here with 77.8 percent. In addition, the federal states often export renewable electricity to other federal states. The costs for grid expansion will nevertheless be apportioned regionally.
The result: in Mecklenburg-Western Pomerania, the proportionate expenditure on the electricity grid for private households will soon be 11 cents per kilowatt hour, and these are just as expensive in Brandenburg. In Schleswig-Holstein, it will soon be as much as 13 cents per kWh. Depending on the region, there are considerable differences in the individual federal states. By comparison, the grid fees per household are cheapest on average in Bremen, at 7 cents per kWh. In a key issues paper, the Federal Network Agency now proposes to relieve grid operators with particularly high costs by expanding renewable electricity generation by distributing the additional costs nationwide.
10.5 million users would benefit
Grid fees in these regions are to be reduced. On the other hand, this leads to manageable additional costs for all electricity consumers in Germany, according to the Federal Network Agency, which has calculated relief and additional costs. According to this, 17 network operators under the responsibility of the Federal Network Agency would currently be entitled to pass on their additional costs. Around 10.5 million network users would benefit, for whom grid fees would fall by 25 percent and whose fees would then be in line with the national average. In relation to 2023, Brandenburg, with a gross relief of 217 million euros, and Schleswig-Holstein – relief of 184 million euros – would benefit in particular.
On the other hand, all electricity consumers in Germany would pay an average of only 0.24 cents per kilowatt hour more. For a household with a consumption of 3,500 kWh, this would be an additional cost of 8.40 euros per year. Specifically, the Federal Network Agency intends to use the mechanism of the levy under the Electricity Grid Ordinance. The levy is part of the electricity price. It serves to compensate for lost revenues of a network operator that arise because certain consumers pay a reduced network fee. This would rise from 0.4 cents per kWh (for 2024) to 0.64 cents per kWh.
The 17 network operators, however, are only a fraction of the more than 800 nationwide, some of which are state-owned and some private-sector-owned. Project developers can testify to how difficult it is to connect to the grid on site. Large transmission system operators such as 50Hertz are currently investing billions in high-performance power lines that will make wind and solar power accessible throughout Germany. In the south of Germany, only solar power is well developed. Currently, gas and coal-fired power plants have to be taken out of reserve, especially in winter and when there is little sunshine in the south, in order to cover the electricity demand, while at the same time the wind turbines in the north produce too much electricity for the grid and are curtailed. At the end of August, the head of the Federal Network Agency, Klaus Müller, initiated the debate on the reform of grid charges. Now his house presented the key issues paper. The reform is to come into force from 2025. The Federal Network Agency is now accepting statements, for example from environmental associations and politicians. Mg