Germany to reduce grid fees in areas of high renewable development, distribute costs more evenly

Grid fees in areas with a high share of renewables in Germany will be reduced from the start of 2025, the country's Federal Network Agency (BNetzA) said. According to the new model, revenue losses for grid operators from the reduced grid fees will be covered through financial compensation, which will be sourced via a surcharge on people's electricity bills, distributed nationwide. Currently, the costs of expanding and modernising distribution grids are covered by consumers in the local area. "The significant relief for the affected regions is thus offset by manageable additional costs for all electricity consumers," BNetzA said.

"We are creating fair grid fees for the people and companies that live and operate in regions with a strong expansion of renewables," BNetzA head Klaus Müller said. Grids must be expanded and modernised to deal with the expansion of a decentralised electricity system based on renewable sources. The ensuing costs – refinanced entirely by electricity consumers – are unevenly distributed across Germany. For example, consumers in the windy north currently bear all the costs for the integration of offshore wind power into the grid – electricity that is needed in the country's industrial south.

BNetzA had presented a proposal for redistributed grid fees in December 2023. Estimates for the compensation and specific reductions for individual grid operators are expected in October this year. Unfair cost distributions have been highlighted as a major factor for discontent with the energy policy for many voters in eastern Germany, where a string of state elections starting at the end of this week (1 September) looks set to result in big gains for populist parties that reject many national climate and energy policies.