Germany slows power price increase with €13 bln grid fee subsidy

Germany will slow the increase of power bills next year by paying just under 13 billion euros towards the grid fees charged by the four high-voltage transmission system operator (TSO) companies, economy minister Robert Habeck told Reuters. "We are now making sure that these cost increases are absorbed, thereby preventing an additional burden for industrial companies, small and medium-sized enterprises and consumers," he said. "We will use almost 13 billion euros to keep costs down." The intervention stabilises the fees, which otherwise would have risen threefold given runaway wholesale power prices and rising operational costs for the TSOs, Habeck said. Transmission grid fees constitute around ten percent of households’ power bills, and up to a third for energy-intensive industry. Fess for distribution grids come on top, and mainly affect households.

Germany’s TSOs 50Hertz, Amprion, TenneT, and TransnetBW raised preliminary transmission grid fees for next year to a nation-wide 3.12 cents per kilowatt hour (kWh) from this year’s average of 3.08 cents, adding they welcomed the government’s move to limit the increase. The companies said they faced higher costs because of the rapid rise in electricity and fuel prices, which result in higher costs for so-called redispatch measures to stabilise the grid, and for backup capacities. Transmission grid fees amounted to around five billion euros recently, but this sum would have increased to around 18 billion euros next year without the government's intervention. Habeck said the government would initially use money from the country’s “green energy account”, which serves to support renewables roll-out, to finance the subsidy. The account currently has a balance of 18 billion euros, which are not needed because high power prices make renewable investments profitable without support.  

The country’s utility association BDEW called the moderate rise in grid fees “good news”. “It is right that a state subsidy is planned for this exceptional situation,” said the lobby group’s head, Kerstin Andreae. “The measure is an important relief for industry in particular.” But BDEW also warned that there will be grid fee increases at the distribution grid level, and called for additional government subsidies to lower these as well. The announcement of distribution grid fees is due next week, and industry insiders told Reuters that private households could face an increase of about four cents per kWh.