Reform to German industrial grid fees overdue – report
Clean Energy Wire
Reforming Germany's grids fees for industrial electricity consumers as a way to incentivise flexible power consumption and boost the use of renewables is overdue, according to a report by energy industry consultancy Neon Neue Energieökonomik. Currently, large industrial consumers receive discounts for maintaining a constant demand for electricity to keep flows in the grid stable and predictable. However, this has been criticised for making it virtually impossible for companies to respond to electricity price signals.
"The flexibilisation of industrial electricity consumption and thus the use of cheap green surplus electricity is an essential building block for the affordability of the energy transition and Germany's industrial competitiveness," report author Lion Hirth said, adding that this is "why a reform is right, important and overdue." The report, commissioned by transmission system operator (TSO) TenneT, comes on the back of the country's Federal Network Agency's (BNetzA) proposal to adapt grid fees to incentivise energy-intensive industries to adapt their electricity demand based on current supply.
The authors of the consultancy report propose reforms for the short, medium and long term. In the short-term, they recommend keeping individual grid charges but switching to a discount for all customers with an annual consumption above a set level, and differentiate this regionally to reflect long-term grid bottlenecks. This, however, would mean that some companies are financially worse off compared to the status quo, the report reads. In the mid-term, a system of "dynamic grid fees" should be implemented. The consultancy's long-term recommendation is for grid fees for all consumers to be closely aligned with the actual costs to operate, maintain, modernise and expand the grid: These grid costs depend on grid load and vary over time and regionally, so charges would be variable and reflect the short-term situation.
When the plans for flexible grid fees were recently discussed, some industry players welcomed them, but others have pushed back. Wolfgang Große Entrup, managing director of the Association of Chemical Industries (VCI), told Handelsblatt in late August that the potential for flexibility in the chemical industry is limited.
