German grid agency's plans for flexible fees meet industry resistance
Electricity prices in Germany could be made more flexible and fall during particularly sunny or windy conditions according to a proposed measure to adapt grid fees to renewable power supply by the Federal Network Agency (BNetzA), business daily Handelsblatt reported. Some industry players have welcomed the incentive, but there has also been pushback, Handelsblatt reported. In a letter to economy minister Robert Habeck and BNetzA head Klaus Müller, the lobby group CDU Economic Council warned of a “devastating signal for Germany as a business location.” The proposal is part of a draft paper and seeks to reduce pressure on the grid by promoting the use of electricity when there are periods of higher renewable energy generation, and curbing it with higher prices at times of little wind or sunshine. Currently, large industrial consumers receive discounts for maintaining a constant demand for electricity to keep flows in the grid stable and predictable. “The regulation dates back to a time when electricity mainly came from central power plants and people wanted to keep the power grid workload as constant as possible,” said Hanns Koenig, analyst at energy consulting firm Aurora Energy Research, to Handelsblatt.
In their paper, BNetzA write: “current, ineffective incentives cannot be maintained.” Wolfgang Große Entrup, managing director of the Association of Chemical Industries (VCI), told Handelsblatt that the potential for flexibility in the chemical industry is limited and that “production systems in industry don’t run around the clock just for fun and games.” The industry lobby group argued that fluctuating power supply would not be an issue for industrial customers in other countries, although Handelsblatt pointed out that this is likely to change as renewable energy becomes a growing factor in many countries' energy systems. BNetzA highlighted in the paper that their proposal is a long-term goal, and that they want companies to communicate what they need to be able to purchase electricity more flexibly. They also refered to a regulation on the EU’s internal electricity market, according to which the network fee system must provide incentives for flexibility. "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.
Last winter, the German government greenlit 5.5 billion euros in funding to offset the cost of rising grid fees. With the electricity grid needed to be expanded to meet future demand, Habeck considered an amortisation account to stabilise electricity prices, a move which spreads the cost of long-term assets over the expected use period.
