Different electricity price zones
Söder sees plans as a “big mistake”
08/13/2023 10:47 p.m
There has long been a dispute between the North and the South about who should shoulder the costs of connecting wind turbines. Now comes a push from the Federal Network Agency. Bayern vehemently resists this.
The Federal Network Agency wants an electricity price reform with lower fees for regions with a lot of wind power – i.e. with a view to the distribution of wind turbines tending towards the north. So far, regions that rely particularly on wind power have been particularly heavily burdened financially, said the president of the authority, Klaus Müller, recently to the “Neue Osnabrücker Zeitung”. Because the operators pass on the costs for the expansion of the networks to the consumers in the region – even if the electricity is transported much further. There is a bill in the Bundestag that would authorize the network agency to introduce fair network charges, said Müller. “Once the law is passed, we will make a proposal for the reform.”
Bayern is now vehemently opposed to it. Prime Minister Markus Söder spoke out against different electricity price zones. He told the “Süddeutsche Zeitung”: “Electricity price zones would be a big mistake.” Anyone who “encourages such zones lays the ax on Germany as an industrial location and endangers southern Germany as the industrial heart of the republic”.
The President of the Federal Network Agency Müller explained the authority’s request as follows: “I don’t meet any energy ministers in the federal states who still approve of this historically grown system.” Finally, regions in southern Germany are also affected, in which many wind turbines are set up and connected to the grid. His impression is that the energy ministers of all federal states are behind his reform plans. “Because it is obvious that we should reward the expansion of renewables. I can understand the frustration of many citizens and regions.”
dispute between north and south
A spokeswoman for the Federal Ministry of Economics said with regard to renewable energies that the goal must be to make the expansion-related network costs between the regions fair. European requirements must be observed for this. “At the same time, we rely on a close dialogue with and between the federal states.” According to a ruling by the European Court of Justice, network charges must be determined by an independent regulatory authority. In Germany, this is the network agency. In May, the cabinet initiated a corresponding amendment to the Energy Industry Act.
An electricity price reform has been discussed for a long time. In mid-June, several states from the north and east, such as Brandenburg, Lower Saxony and Schleswig-Holstein, called for a fair nationwide distribution of the grid expansion costs caused by the expansion of renewables. According to a statement at the Minister Presidents’ Conference, the current regulations for grid fees mean that electricity consumers in regions that have significantly promoted the expansion of renewable energies are disadvantaged financially. Fair grid fees are the basis for the acceptance of the energy transition. On the other hand, Bavaria’s Prime Minister Söder said in May that electricity could not be more expensive in the south and cheaper in the north.
Lower Saxony, Brandenburg and Schleswig-Holstein are the states with the most wind turbines in Germany. The expansion of onshore wind power plays an important role in the federal government’s strategy to achieve climate protection goals and to replace fossil fuels such as coal and gas. The energy industry has long complained about a north-south divide in the expansion of wind power. In southern Germany in particular, the expansion continues.
Network charges vary by region
The network fees as electricity network fees are part of the electricity price. These fees also pay for the expansion of the power grid and for measures to ensure system security. So far, the charges have been set by the network operators. The Federal Network Agency specifies so-called revenue caps. The federal government had dampened the rise in electricity grid fees with a multi-billion dollar subsidy. The amount of network charges varies depending on the network operator and region.
According to a current electricity price analysis by the Federal Association of Energy and Water Industries, network charges for household customers rose by 18 percent in 2023 to an average of 9.52 cents per kilowatt hour. Their share of the total price is therefore 21 percent.
As the comparison portal Check24 announced at the end of June, electricity customers in federal states that have increasingly expanded renewable energies have to pay comparatively high grid usage fees. According to energy expert Steffen Suttner, the investments in wind power and solar systems result in higher grid costs that are passed on to consumers in the region. Consumers from Brandenburg, Schleswig-Holstein and Mecklenburg-Western Pomerania paid the most, electricity customers from Bavaria the least.