Germany plans to cap grid fees for all customers with subsidies worth billions by 2026 – media

Germany's government plans to lower costs for all electricity customers with subsidies worth 6.5 billion euros, news agency dpa reported in an article published on news site ntv. According to dpa, the economy ministry presented a draft to the government cabinet to address the relatively high costs for electricity customers by reducing fees covering the operation of electricity grids. From 2026 onwards, the grid fee subsidy would be covered by the Climate and Transformation Fund (KTF), according to the plans.

The government parties from the conservative CDU/CSU alliance and the Social Democrats (SPD) pledged to bring electricity costs down in their coalition agreement. The parties said they would aim to reduce grid fees, ideally with a permanent cap. Other measures to reduce electricity prices further would be possible, the ministry said.

Grid fees are added to electricity bills to ensure grid operators can manage the transport of electricity and cover investment costs that go towards expanding and modernising the electricity transmission infrastructure. This becomes increasingly important with the expansion of renewables and as heating, transport and industry transition from fossil fuels to being powered by electricity. Grid fees are thus set to rise steeply in future.

Economy minister Katherina Reiche earlier this year said she expected grid operators to fully pass on cost reductions to customers, although these can vary significantly depending on the region. The government had previously caused an uproar by excluding households and small businesses from a reduction of electricity taxes it granted to major industry, despite promising cuts to all customers in the coalition agreement. According to dpa, the government plans to extend the cuts for industry but still does not plan to reduce taxes for all customers due to budgeting constraints.