How can the costs of expanding electricity distribution networks be distributed more fairly during the energy transition? The Federal Network Agency presented its suggestions for discussion in a key points paper on Friday. The key point is that households and companies in regions with a strong expansion of wind and solar power systems should be relieved of their grid fees in the future. The higher expansion costs there should be passed on to all electricity consumers in Germany. “The energy transition is a joint task, and investments in the networks benefit everyone. We want to achieve a fairer distribution of costs,” said authority President Klaus Müller.
The levy should apply to all electricity consumers
All electricity consumers would be affected by the planned new regulation. The reason: The network costs are financed by electricity customers through the network fees. These fees are included on the annual bill for all electricity consumers.
To put it into perspective: According to the energy industry association BDEW, a kilowatt hour of electricity cost an average of 46.27 cents in 2023. Of this, 9.52 cents went to network fees, a good fifth. However, this value varies greatly from distribution network operator to distribution network operator. Because a lot of investment is being made in the networks in large parts of northern and northeastern Germany or in rural areas due to the strong expansion of renewable energy, the network fees there are noticeably higher than in other regions of Germany.
Big differences in network fees
According to the network agency, the fees in some network areas are up to 15 cents per kilowatt hour. On the other hand, there are regions where they are less than 5 cents. “Over the years, this development has taken on an unacceptable dimension,” said the Federal Network Agency. It would become even more severe with the further expansion of renewables.
According to the comparison portal Verivox, network fees have increased by around 30 percent in the last five years. The portal pointed out the differences in network fees between cities and rural areas. Consumers in Schleswig-Holstein and Mecklenburg-Western Pomerania paid over 50 percent more for network costs in rural areas than in the city.
Relief planned in areas of 17 network operators
According to the key points, 17 of the approximately 870 network operators would currently be entitled to pass on their additional costs to all electricity consumers. These 17 operators supplied around 10.5 million network connections. “Their network fees would fall by up to 25 percent.” This means that they are mostly below and only partly above the national average.
The proposal provides for up to 120 euros in relief per household
The Federal Network Agency has calculated what its proposal would specifically mean for an average household in the area of the 17 network operators. With an annual consumption of 3,500 kilowatt hours, such households would save up to 120 euros per year. However, the planned relief varies greatly in detail. For example, the network fee at the operator Fairnetz (Reutlingen) is expected to fall by less than 0.01 cents per kilowatt hour and remain at around 9.20 cents. The operator Schleswig-Holstein Netz is planning to reduce the load by 3.34 cents to 11.95 cents per kilowatt hour. The Federal Network Agency emphasizes that special burdens should be cushioned. “Certain differences remain,” it said. Whether a network operator has a particular cost burden should be determined beforehand in a complex process, on an annual basis.
In its proposal, the authority comes to a total relief of around 608 million euros, which should then be allocated. Network operators in Brandenburg (217 million euros), Schleswig-Holstein (184 million euros) and Saxony-Anhalt (88 million euros) would be particularly relieved. There is also noticeable relief in Mecklenburg-Western Pomerania (44 million euros), Bavaria (40 million euros) and Lower Saxony (26 million euros). The rest is distributed among individual network operators in Baden-Württemberg, Hesse, Saarland and Rhineland-Palatinate. None of the 17 companies are located in the remaining federal states of Bremen, Hamburg, Berlin, Thuringia, Saxony and North Rhine-Westphalia.
The levy would cost 8.40 euros per model household per year
The authority emphasized that the significant relief for the affected regions would be offset by manageable additional costs for all electricity consumers. According to the Federal Network Agency, an average household with an annual consumption of 3,500 kilowatt hours per year would incur additional costs of 8.40 euros per year. The money would be billed to all electricity customers, including customers in the territories of the 17 network operators.
The discussion about the different levels of network costs has been going on for a long time. In mid-June, the ten federal states from the north and east 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 network fees at a Prime Minister’s Conference at the time. “In Brandenburg, many people have a wind turbine in front of their living room and a high electricity bill in their mailbox,” Prime Minister Dietmar Woidke (SPD) criticized at the time.
Müller: Relief would increase acceptance of renewables
On Friday, Federal Network Agency boss Müller strongly advocated for the proposed model, in which the costs would be distributed “across many shoulders.” “We all benefit from investments in local networks to expand renewable energies. With this relief, we are strengthening local acceptance of renewables and the energy transition.” He described the energy transition as a “community task”. This must then be “managed by all of us in solidarity”.
The Federal Government Commissioner for East 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 the dpa. This is “a good day for the people in the federal states who are leading the way with the energy transition and which will therefore become a step fairer.” Approval also came from the VKU municipal utilities association. The BDEW spoke of “the right approaches for a fairer distribution”.
The Federal Network Agency is now putting its proposal up for discussion. It then develops the final regulation in a multi-stage process. It should come into force on January 1, 2025 at the earliest.
