Germany needs comprehensive reform of power grid fees – think tank

With the new offshore grid fee set to push electricity grid fees up by 6 to 8 percent this year, the system is in urgent need of reform, according to a paper by energy think tank Agora Energiewende*. Power grid fees will increase by 1.5 to 2 billion euros, but a “lack of transparent data” makes it impossible to predict the exact amount, the think tank says in a press release, adding that it is also unclear exactly how revenue from the fees is spent. “We need new grids,” Agora Energiewende head Patrick Graichen said. “But the grid costs and the grid fee structure are so opaque at the moment that it is impossible to regulate grid expansion and costs efficiently.”

Germany’s shift to renewable energy requires massive investment in the country’s power network. The costs are carried by consumers, who pay a grid fee included in their power bills. A rapid rise of these charges in recent years has sparked a controversy over the methods used to calculate the costs, and their distribution. Grid fees already make up around a quarter of household electricity bill [for details, see the Factsheet What German households pay for power]. At an average cost of more than 7 cents per kilowatt-hour, grid fees exceed the renewables surcharge consumers pay to finance the roll-out of green energy.

*Like the Clean Energy Wire, Agora Energiewende is a project funded by Stiftung Mercator and the European Climate Foundation.