Living on the coast in Germany can have its disadvantages. The sea is close, but so is the wind. And in the countryside, where the wind blows well, many electricity customers live more expensively than elsewhere in the country. Because the charges for the power grid are particularly high here. Klaus Müller, head of the Federal Network Agency, wants to change that – and promptly encounters headwinds from the south. There, Bavaria’s Prime Minister Markus Söder (CSU) believes higher electricity prices and disadvantages for Bavaria’s industry. What is it? An overview.
What exactly is the problem?
Households not only pay for the electricity, but also for its transport, i.e. the power lines. A good fifth of the electricity bill is made up of the so-called grid fees. They vary greatly from region to region. Where the regional grid operators invest a lot in the electricity grid, the corresponding charges are also higher. The result: Where there are many wind farms, they are often higher than elsewhere or in cities. Consumers in the area also pay for every new line that is required for wind power. Even if wind turbines have to be curtailed in times of excess electricity, this is reflected in the grid fees, because the operators then receive compensation that is passed on in this way. Up north, where Schleswig-Holstein Netz AG operates the lines, the charges have risen by a whopping 27 percent within a year.
What does the Federal Network Agency want?
In an interview with the New Osnabrück newspaper its President Klaus Müller has promised a new regulation. The Bonn authority already regulates a large part of the network fees, but has had limited powers so far. That has changed with a ruling by the European Court of Justice (Case C-718/18), which requires more independence and powers for the authority. The cabinet passed a corresponding draft law in May; the Bundestag still has to approve it. With him, Müller’s authority could make a proposal for the new distribution of network fees.
What would be the alternative?
The state of Schleswig-Holstein had already had two variants on the status quo checked in 2021. The simplest would be to simply pass on the extra costs for the wind farms to all German electricity customers. Regions with a lot of wind power would be greatly relieved. But households in the cities in particular would then have to pay more. A second variant would envisage calculating the grid fees differently for at least part of the wind power – namely for those surpluses that flow to other regions. The relief in rural areas would not be quite as great, but neither would the additional burden in the cities. It would definitely be fairer than the previous system.
Why is Markus Söder so allergic to the attack?
This can at best be explained by Bavarian reflexes. Because there is a gap in network charges not only between north and south, but also within Bavaria, like one Map of the Federal Network Agency shows. Electricity customers in the Allgäu could also have an interest in a different distribution of network charges. It was not until June that the Prime Ministers’ Conference also dealt with the issue, primarily at the instigation of North and East German Prime Ministers. At the time, Söder kept quiet. However, he is now railing against a completely different idea – a division of Germany into different electricity price zones.
What are these price zones all about?
There is another problem behind this: Most of the wind power is generated in northern Germany, but there are not enough lines to transport it south for many hours. If there were two electricity markets in Germany, one in the south and one in the north, the price difference would be huge during these hours. Electricity would then be much cheaper in the north than in the south. There is pressure, especially from Brussels, to give market forces more leeway here. That may also explain Söder’s knee-jerk reaction, because Bavaria’s economy would then actually come under pressure. Only: It has absolutely nothing to do with the distribution problem with network charges. And the industry does not have to worry too much about a new distribution of these fees: it is largely exempt from it.