German grid agency to modify fees to incentivise flexible industrial electricity consumption

Germany's grid agency BNetzA is set to adapt grid fees for industrial electricity consumers in a bid to incentivise flexible power consumption. In an impulse paper, BNetzA proposed new regulation to prompt industries with high demand to react dynamically to the current supply of electricity. "The old grid fee rebates no longer meet the requirements of an electricity system characterised by a high proportion of renewable electricity generation," BNetzA head Klaus Müller said. "In future, we want to incentivise system-friendly consumption behaviour in industry in particular." This means that industrial consumers pay reduced grid fees if they increase demand when electricity supply is plentiful, as well as if they drive down consumption at times of low supply. "We are proposing a transition from a rigid to a flexible system," Müller added.

In principle, adjusted grid fees should send a market signal to consumers. Reductions would be granted to those who "significantly" adapt their electricity consumption compared to their individual annual average during periods of particularly low or high prices, BNetzA said. "The aim is not to overburden end consumers, but to realise the flexibility potential that actually exists and can be achieved in the future," the agency wrote.

As Europe phases out fossil fuels, the share of decentralised and fluctuating renewable power generation will rise, and industry (as well as other sectors) will increasingly rely on electricity. This means that the electricity system of the future presents great opportunities but also challenges for industry. Flexibility in the electricity system will be essential to achieve the energy transition, and will play a key role in ensuring security of supply as well as in optimising the electricity system's operation.