Long-term anticipation of elevated energy costs by Eon's top executive.
Due to the revised cost distribution of grid expansion, numerous customers across Germany might see decreased energy bills by 2025. However, Eon Energy Germany's chief, Filip Thon, predicts a long-term rise in energy prices for consumers. Thon stated, "The proportion of network fees in the electricity price is approaching 30%," to the German Editorial Network. Currently, network fees and other state-imposed taxes and levies make up about 56% of the electricity price. When asked if this share would escalate, Thon replied affirmatively, explaining, "Investments in grid infrastructure are necessary to further incorporate renewables into the power market."
Thon also anticipates an increase in gas tariffs: "Operators of newer gas networks may depreciate them more rapidly as Germany aims to phase out natural gas by 2045. This could lead to higher gas prices for end-users." Additionally, weather-related surcharges are possible: "Should we experience a colder winter, prices could surge dramatically."
However, many households in various German regions can initially look forward to lower energy bills by 2025, thanks to the new cost distribution of grid expansion. Around ten million households in rural areas might experience cheaper energy bills, while prices might increase elsewhere. The decrease in network fees, which account for about 25% of the electricity price, mainly impacts the north and east of Germany, Bavaria, and rural regions rather than major cities.
Eon's distribution network subsidiaries have announced partial significant reductions in network fees. These companies manage around 700,000 kilometers of power lines, accounting for about one-third of the entire German distribution network. Network fees are paid by energy suppliers to network operators and then passed on to consumers. The costs of grid expansion are also allocated to network fees.
Decreasing fees in the northern regions
Schleswig-Holstein Netz will see a 27% drop in network charges next year, covering large parts of the northernmost German federal state, excluding major cities like Kiel and Lübeck. E.DIS Netz GmbH in Brandenburg will decrease charges by 20%, while Mitnetz mbH in Cottbus will provide a 10% reduction.
In Bavaria, Bayernwerk Netz GmbH will decrease by 11%, and Lechwerke by 27%. Decreases of more than 10% are also expected at other companies, such as Wemag, the municipal network operator in Mecklenburg-Vorpommern. Around 800 electricity network operators operate in Germany.
However, Syna in Hesse will increase charges by 5%, and Westnetz in NRW by 1%, both of which are part of Eon: Energy customers living in their network areas can thus anticipate a slight price increase.
The rationale behind the altered charges is a new regulation by the Federal Network Agency, which redistributes the financial burdens of the multi-billion euro expansion of energy networks differently than before. Grid expansion is primarily required in areas with a high amount of renewable energy generation, such as wind turbines in the north. However, only a portion of the electricity is needed locally; the remaining electricity is sent south to supply major cities or industrial centers.
The predicted decrease in network fees, which account for approximately 25% of the electricity price, is expected to result in lower energy bills for numerous households in the northern regions of Germany by 2025. Contrarily, Eon Energy Germany's chief, Filip Thon, foresees a long-term rise in energy prices, largely due to the increasing proportion of network fees in the electricity price, approaching 30%.
