(Bloomberg) -- Germany plans to punish companies and households in regions that have been slow to expand renewables with higher grid fees, a move that aims to relieve the cost burden for those living near large wind and solar facilities.
“We want to achieve a fairer distribution of costs,” said Klaus Müller, president of the country’s grid regulator. “In regions that generate significantly more renewable electricity than they consume, the costs of converting the grids are considerable.”
Germany currently produces most of its renewable energy in the windy north, while the grid is being expanded so the bulk of that power can be consumed in the industrial south. For the transmission system alone, grid operators peg costs at €250 billion ($272 billion) by 2045. Costs of integrating clean-energy sources are currently shouldered entirely by consumers living near them, even though the generated power is spread across Germany.
To even out the cost burden, the regulator proposed raising the nationwide grid fee to 0.64 cents per kilowatt-hour. An average household in Germany’s most industrialized and populous state North Rhine Westfalia — as well as in the city-states Berlin, Hamburg and Bremen, which struggle to expand renewables — would have to pay €8.40 more annually.
Meanwhile, an average household in the north of the country would see its grid fees drop by up to 25%, generating savings of €120 per year.
Germany’s industrial southern states — which consume far more energy than they produce — have voiced criticism over similar reforms in the past in fear of higher power costs. Grid fees account for as much as one fifth of the power price for households and businesses, however some large, energy-intensive industries can apply for reduced fees or even exemptions.
The network regulator, which recently was given more power to independently set grid fees, will accept feedback to its proposal until the end of January, and aims at specifying the exact regional grid costs in the third quarter of 2024.
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