German court ruling on grid returns releases funds for investments but means higher costs for customers – reactions

The German Association of Energy and Water Industries (BDEW) says the ruling by a German court blocking a significant decrease in grid operators' guaranteed returns will boost necessary infrastructure investments. “The rate determined by the Federal Network Agency (BNetzA) in 2016 is one of the lowest in Europe – while Germany is among the EU countries with the greatest need for grid expansion,” BDEW head Stefan Kapferer says in a press release. Kapferer says the higher rate of return allows grid operators to accelerate grid expansion and to prevent costs caused by grid bottlenecks. The BDEW says Germany’s grid operators face the “triple challenge” of revamping the country’s grid to cope with more intermittent renewable energy sources, the expected rise in the number of e-cars, and the electrification of the heating sector.
By contrast, the Association of Energy Market Innovators (bne) says the lower rate of return that the BNetzA had aimed for would have meant an “appropriate” financial relief for power customers. The guaranteed rate of 6.91 percent “would still have allowed for more than just acceptable returns,” bne head Robert Busch says in a press release. Busch argues that grid fees have been rising constantly in recent years, while investments in the grid remained wanting in many places. Customers now face additional costs of up to one billion euros, he says. With regard to the planned “giant merger” of grid operators E.ON and innogy, Busch says that “we need effective regulation that considers the interests of everyone and is transparent.”

Read the BDEW’s press release in German here, and the bne’s press release in German here.

For background, read the CLEW factsheets Re-dispatch costs in the German power grid and What German households pay for power.