power poles; Source: iStock.com/Aryut

© iStock.com/Aryut

The Bundestag has adopted the Act on the Modernisation of the Grid Fee Structure.

Minister Zypries said: “If you want the energy transition to work, you need a rapid expansion of the grid. A fair distribution of the costs across the whole of society is crucial for this project to meet with public acceptance. For this reason, we will be reducing regional disparities in grid fees in future, by gradually removing the costs incurred from avoided grid fees and gradually harmonising grid fees for transmission grids. This is an important and correct step. I am glad that it has proved possible to reach an agreement on this before the end of this parliament.”

The Act on the Modernisation of the Grid Fee Structure contains two important points: firstly, the gradual harmonisation of transmission grid fees, and secondly, the gradual removal of the privilege of avoided grid fees. The transmission grid fees are to be gradually aligned across the country. In order to implement this, the Act contains an authorisation for the Federal Government to adopt an ordinance with the approval of the Bundesrat. The process is to take place in five steps, starting on 1 January 2019. From 1 January 2023, all the fees for transmission grids will be the same across the country. At present, transmission grid costs account for about 25% of the total costs of the electricity grids.

The removal of the payments to power generators for “avoided grid fees”, as envisaged by the Act, is appropriate. It used to be assumed that locally generated and consumed electricity would save costs for the upstream grid, but this is less and less the case: rather, wind power has to be transported from the north to the centres of consumption in the south and west, and this requires the use of grids. In the light of this, the way the avoided grid fees are calculated will be adapted to the current situation for all existing installations, and from 2018 will be frozen at the 2016 level.

As the avoided fees are removed, a distinction will be made between the volatile (solar, wind) and controllable generation installations (e.g. CHP). In the case of volatile installations, the avoided grid fees will be abolished entirely for new installations from 2018, and will be fully removed for existing installations for existing installations in three stages from 2018. In the north and east, this can result in a tangible reduction in the rise in grid costs, and this will benefit the electricity consumers in these grid regions. In the case of controllable installations, new installations will not receive any payments from avoided grid fees from 2023.

The next stage in the legislative process is that the Act will be considered by the Bundesrat (but the Act does not require the approval of the Bundesrat). The Act is scheduled to enter into force in the late summer of 2017.