Wind and solar: grid costs to be distributed more fairly

Energy - Wind and solar: grid costs to be distributed more fairly

How can the costs of expanding the electricity distribution grids be distributed more fairly in the energy transition? The Federal Network Agency presented its proposals in a key issues paper for discussion on Friday. The key point is that households and companies in regions with a strong expansion of wind and solar power plants should be relieved of grid charges in future. The higher expansion costs in these regions are to be passed on to all electricity consumers in Germany. "The energy transition is a joint task and investment in the grids benefits everyone. We want to achieve a fairer distribution of costs," said Klaus Müller, President of the authorities.

Levy to apply to all electricity consumers

All electricity consumers would be affected by the planned new regulation. The reason: grid costs are financed by electricity customers via the grid fees. These charges are included in the annual bill of all electricity consumers.

To put this into perspective: According to the German Energy Industry Association BDEW, a kilowatt hour of electricity cost an average of 46.27 cents in 2023 until July. Grid fees accounted for 9.52 cents of this, i.e. a good fifth. However, this value varies greatly from distribution grid operator to distribution grid operator. Because a lot is being invested in the grids in large parts of northern and north-eastern Germany or in rural areas due to the strong expansion of renewables, the grid fees there are noticeably higher than in other regions of Germany.

Large differences in grid fees

According to the grid agency, the fees in some grid areas are up to 15 cents per kilowatt hour. On the other hand, there are regions where they are below 5 cents. "This development has reached an unacceptable level over the years," says the Federal Network Agency. It would continue to worsen with the further expansion of renewables.

According to the comparison portal Verivox, grid fees have risen by around 30 percent in the last five years. The portal pointed out the differences in grid fees between urban and rural areas. Consumers in Schleswig-Holstein and Mecklenburg-Western Pomerania, for example, paid over 50 percent more for grid costs in rural areas than in the city.

Relief planned in areas of 17 grid operators

According to the key points, 17 of the total of around 870 grid operators would currently be entitled to pass on their additional costs to all electricity consumers. These 17 operators supply around 10.5 million grid connections. "Their grid fees would fall by up to 25 percent." This would put them mostly below and only in some cases above the national average.

Proposal provides for a reduction of up to 120 euros per household

The Federal Network Agency has calculated what its proposal would mean in concrete terms for an average household in the area of the 17 network operators. With an annual consumption of 3500 kilowatt hours, such households would save up to 120 euros per year. However, the planned reductions vary greatly in detail. For example, the grid fee at the operator Fairnetz (Reutlingen) is to fall by less than 0.01 cents per kilowatt hour and remain at around 9.20 cents. At the operator Schleswig-Holstein Netz, a reduction of 3.34 cents to 11.95 cents per kilowatt hour is planned. The Federal Network Agency emphasizes that special burdens are to be cushioned. "Certain differences will remain," it said. Whether a grid operator has a special cost burden is to be determined beforehand in a complex procedure, and this is to be done annually.

In its proposal, the authority arrives at a total relief of around 608 million euros, which would then be allocated. The main relief would be for network operators in Brandenburg (217 million euros), Schleswig-Holstein (184 million euros) and Saxony-Anhalt (88 million euros). In Mecklenburg-Western Pomerania (44 million euros), Bavaria (40 million euros) and Lower Saxony (26 million euros) there will also be noticeable relief. The remainder is distributed among individual network operators in Baden-Württemberg, Hesse, Saarland and Rhineland-Palatinate. None of the 17 companies are located in the other federal states of Bremen, Hamburg, Berlin, Thuringia, Saxony and North Rhine-Westphalia.

Levy would cost 8.40 euros per model household per year

The significant relief for the affected regions would be offset by manageable additional costs for all electricity consumers, the authority emphasized. According to the Federal Network Agency, an average household with an annual consumption of 3,500 kilowatt hours would incur additional costs of 8.40 euros per year. The money would be charged to all electricity customers, including customers in the areas of the 17 grid operators.

The discussion about the different levels of grid costs has been going on for some time. In mid-June, the ten federal states in the north and east of Germany spoke out in favor of a fairer distribution. Berlin, Brandenburg, Bremen, Hamburg, Mecklenburg-Western Pomerania, Lower Saxony, Saxony, Saxony-Anhalt, Schleswig-Holstein and Thuringia called for fair grid fees at a conference of state premiers at the time. "In Brandenburg, many people have a wind turbine in front of their living room and a high electricity bill in their letterbox," criticized Minister President Dietmar Woidke (SPD) at the time.

Müller: Relief would strengthen acceptance of renewables

On Friday, the head of the Federal Network Agency, Müller, strongly advocated the proposed model, in which the costs would be spread "across many shoulders". "Because we all benefit from the investments in the local grids for the expansion of renewable energies. This relief will strengthen the acceptance of renewables and the energy transition locally." He described the energy transition as a "joint task". This would then also have to be "shouldered by all of us in solidarity".

The Federal Government Commissioner for Eastern Germany, Carsten Schneider, welcomed the key points. The proposals would bring relief of around 350 million euros for Mecklenburg-Western Pomerania, Brandenburg and Saxony-Anhalt, he told dpa. This was "a good day for the people in the federal states, who are leading the way in the energy transition and making it a step fairer". Approval also came from the municipal utilities association VKU. The BDEW spoke of "the right approaches for fairer distribution".

The Federal Network Agency is now putting its proposal up for discussion. It will then draw up the final regulation in a multi-stage process. It should come into force on January 1, 2025 at the earliest.