Rising grid fees: federal government dampens electricity price with billions of subsidy

Status: 10/05/2022 19:55 hrs

For most electricity customers, the grid tariffs – part of the electricity price – will rise in the coming year. To cut costs for consumers and the economy, the federal government is contributing 13 billion euros.

For many electricity customers, grid tariffs are likely to rise in the coming year. The four major transmission system operators announced an expected price of 3.12 cents per kilowatt hour, which would apply nationally for the first time.

Grid tariffs are part of the electricity price that consumers pay. This consists of the price for the electricity itself, but also fees for the use of the large national transmission grids, the local distribution grids and other matters.

Anyone who lives in the vicinity of the grid operator Tennet, who supplies for example to Lower Saxony, Schleswig-Holstein and parts of Hesse and Bavaria, can expect a slight reduction in the network fee. There you still have to pay 3.29 cents per kWh.

In the rest of the country, however, network rates are currently between 2.94 and 3.04 cents per kWh, so they are going up. The four transmission system operators – 50Hertz, Amprion, Transnet BW and Tennet – justify the price increases with foreseeable higher costs.

Cost increase must be absorbed

As reported by Reuters news agency, the cost of transmission networks has more than tripled from €5 billion to €18 billion. To ensure that network tariffs for customers do not more than triple as a result, the federal government promised to support the tariffs with 13 billion euros. In this way, fees would stabilize around current levels.

“We are now making sure that these cost increases are absorbed, thus avoiding an additional burden for industrial companies, medium-sized companies and consumers. We are going to use almost 13 billion euros to reduce costs. This happens in connection with the electricity price brake and the defense shield. For interim financing, we have access to the surplus in the EEG account,” said Minister of Economic Affairs Robert Habeck (Groenen).

In the medium term, the federal government also wants to cut grid fees by skimming high arbitrary profits from power generators. The Federal Association for Energy and Water Management (BDEW) called on the coalition to quickly create the legal basis for subsidies. “It is true that a state grant is planned for this extraordinary situation,” says Kerstin Andreae of the BDEW. The significantly higher costs would otherwise lead to significantly higher network rates that customers would have to pay.

Distribution network fees are also likely to increase

The new prices for the use of the local distribution networks will also be published in the coming week. It was said in industry circles that price increases are to be expected here too. Private customers can be hit with about four cents per kWh if the federal government does not intervene with subsidies here too.

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