The head of Germany’s federal networks agency (BNetzA) has kicked off a debate over grid fees that are ironically punishing consumers in regions with the highest activity in wind power construction, sparking aggressive pushback from southern Bavaria, a laggard in wind energy.
BNetzA president Klaus Müller in an interview with the Neue Osnabrücker Zeitung newspaper revealed that the government in Berlin is currently working on a legislative proposal that would authorise his agency to introduce a fairer distribution of grid fees.
“As soon as the law is passed, we will make a proposal for a reform,” he was quoted as saying.
Grid fees currently make up about a quarter of the final electricity price paid by consumers, which typically varies between €0.30 and €0.40 per kilowatt hour. But the fees differ considerably as consumers in regions with high construction costs have to pay more to compensate operators of regional distribution grids for building new power lines.
According to BNetzA data, grid fees in coastal Schleswig-Holstein, for example, can top €0.10/kWh, while most power consumers in the southern state of Bavaria pay nearly half of that, a fact that could undermine the acceptance of locals in the North for more wind power.
The cost of the country’s grid expansion is likely to go up further, as the government aims to boost Germany’s renewable power share to 80% by 2030, up from 52% of the country’s gross electricity consumption during the first half of this year.
Müller didn’t say how exactly a reform of grid fees could work, but a possibility would be to simply add up all costs for local grids across Germany and then divide those costs among all power consumers. That is already being done with the costs for the (very expensive) construction of several high-voltage direct current (HVDC) lines that are being built from North to South to bring inexpensive wind power from windy coastal regions and at sea to southern population and industry centres.
But the prospect of potentially having to pay more for electricity due to higher grid fees isn’t going down well in the South, where Bavarian state premier Markus Söder reacted to Müller’s cautious call for reform with a rant against dividing Germany into different price zones altogether for electricity (which is also a demand by some northern states but was not the subject of Müller’s proposal).
“Different power price zones would be a grave mistake,” Söder told the Süddeutsche Zeitung newspaper, whose conservative Christian Social Union in the past years had blocked most new wind power in Bavaria through a draconic distance law while at the same time delaying the construction of the much-needed North-South HVDC lines.
To talk about different price zones is to “lay the axe on Germany as an industrial location and endangers southern Germany as the industrial heart of the republic,” Söder is quoted as saying. The at times maverick politician wants to get re-elected in state elections in October and has been using every opportunity he can to accuse the federal government of a supposed bias against the South.
Different price zones would constitute a further attack on the South by Chancellor Olaf Scholz's Social Democrat-Green-Liberal coalition in Berlin, he said.
While Müller hadn’t been talking about different price zones, those would actually make sense in Germany as states such as Bavaria or the also southern Baden-Württemberg have in part acted as free-riders of the country’s energy transition, letting northern and eastern states shoulder the heavy lifting in the onshore and offshore wind expansion.
Unsurprisingly, Armin Willingmann, the Social Democratic energy minister of the northeastern state of Sachsen-Anhalt, has welcomed plans for a power price reform. His state and others in the North and East for years have been almost punished for the expansion of renewables, he is quoted as saying on the dpa newswire.
“Hardly any state agrees with the current system of network charges,” he said, adding that the issue is likely to be discussed at a conference in late September among state energy ministers, the BNetzA and federal economics and climate minister Robert Habeck.
Given the proximity of the Bavarian state elections, it is doubtful that that meeting will render results.