01 Dec 2023, 13:31
Carolina Kyllmann

German grid agency proposes fee reduction for regions with high renewables share

Clean Energy Wire

Germany's grid agency has proposed to reduce electricity grid fees in areas with a high share of renewables, in a bid to distribute the costs of rolling out wind and solar energy more fairly across the country. Grid fees should fall for operators with particularly high costs due to renewable energy expansion, and the additional costs incurred should be distributed nationwide, BNetzA said in a key points paper. "There is broad agreement on the need for action on grid fees," BNetzA head Klaus Müller said. The agency is proposing a three-tiered model, whereby the cost burden for a grid operator caused by the expansion of renewables would be determined first. If a threshold value based on the renewable energy capacity connected to the grid is exceeded, the additional costs would then be evenly distributed nationwide "in a spirit of solidarity," BNetzA proposed. Favoured grid operators would ultimately receive financial compensation for the additional costs of integrating renewables.

The politically sensitive debate on whether to split Germany's bidding zone – a trading area with a uniform market price on electricity comprising the whole country – has been ongoing for years. Grids have to be expanded and modernised to deal with the expansion of a decentralised electricity system based on renewable sources. The ensuing costs are unevenly distributed across Germany, with consumers in the windy north, for example, currently bearing all the costs for the integration of offshore wind power into the grid – electricity that is needed in the country's industrial south. "Over the years, this development has taken on an unacceptable dimension," BNetzA wrote, adding that further renewable expansion would only worsen the situation. The agency now wants to discuss the proposal with relevant stakeholders and make a decision by the third quarter of 2024, with new rules entering into force by January 2025.

Northern German state leaders have repeatedly criticised the current system for effectively penalising their renewable energy expansion efforts, while southern state leaders generally reject the idea of splitting the country into different prize zones, arguing that this would undermine the integrity of the country’s economy.

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