German Grid Regulator Plans to Spread Clean Energy Costs Across All Regions
German Grid Regulator Plans to Spread Clean Energy Costs Across All Regions | OilPrice.com
The semiconductor foundry industry is…
OPEC+ reached a deal on…
Consumers in Germany’s states with lower clean energy production may end up paying higher grid fees as the regulator plans to spread out evenly among regions the higher costs of adding renewables to the system.
The Federal Network Agency, Bundesnetzagentur, proposed on Friday a plan to evenly distribute the higher costs of adding a lot of renewable energy generation to the grid.
This essentially means that German states in the north of the country, where most of the onshore wind power is generated, would pay lower grid fees. But the large industrial consumers in the south of Germany, as well as households, may end up paying more in grid fees per kilowatt-hour, according to the plan.
Renewable energy sources are expected to generate more than 50% of Germany’s electricity this year, Economy Minister Robert Habeck said in September. By 2030, Germany aims to have renewables account for 80% of its electricity generation, Habeck said.
“Regions that generate significantly more renewable electricity than they consume incur significant network costs,” Klaus Müller, the president of the network regulator, said.
The regulator proposes that these network fees be reduced for regions with high renewables share and distributed nationwide “in a spirit of solidarity,” he added.
“In regions that generate significantly more electricity than they consume, there are considerable costs for upgrading the grid. At the same time, the electricity not only supplies the region, but also the whole of Germany,” the regulator in its rationale for the proposal.
“The network fees in these regions should decrease. On the other hand, this leads to manageable additional costs for all electricity consumers in Germany,” Bundesnetzagentur added.
ADVERTISEMENT
The regulator is now seeking feedback on the proposal until January 31, 2024. It will announce its decision on the appropriate distribution of the grid fees in the third quarter of 2024. If the plan wins approval, it would come into effect on January 1, 2025, at the earliest.
By Charles Kennedy for Oilprice.com
More Top Reads From Oilprice.com:
Join the discussion| Back to homepage
ADVERTISEMENT
Related Knowledge Center: ENERGY BASICS: electricity
Electricity is a secondary energy source: it is generated through the conversion of primary energy sources such as natural gas, coal, solar, hydropower, and wind. Electricity’s versatility is not cost-free: a substantial amount of energy is lost in its generation and the cost of storage is high, compared with fuels such as coal, oil and natural gas. The economics of battery technology hold the key to expanded use of renewable sources to generate electricity.