German regulator proposes grid fee reform, options include charging generators

Germany's energy regulator BNetzA has launched a consultation on a comprehensive reform of electricity grid fees, proposing fundamental changes that could see power producers paying grid charges for the first time and introducing capacity-based pricing to better reflect system costs.

The reform aims to address three key challenges: the shrinking base of fee-paying users amid rising costs, insufficient price signals for cost-efficient grid development, and a lack of incentives for flexible consumption behavior, according to an options paper published on May 12.

"We need to reform the system by which grid fees are collected," said BNetzA President Klaus Mueller. "Our goal is to make the grid fee system fit for the future and adapt it to the challenges of the energy transition. We are at the beginning of our decision-making process and are starting with an open mind."

A central proposal involves broadening the financing base by requiring power producers to contribute to grid costs.

Currently, in Germany, unlike in some other European countries and the gas transmission system, grid fees are paid exclusively by end-consumers.

The regulator notes that renewable power expansion is a major driver of grid costs, yet producers pay nothing for grid access.

The discussion paper suggests either usage-based fees for power injection or a basic grid fee that producers would pay, distributing costs "across more shoulders."

The reform comes as Germany's energy system undergoes a profound transformation.

High volumes of wind and solar are driving substantial grid expansion costs while creating increasingly feed-in dominated networks.

The growing number of prosumers (consumers who also produce electricity) is simultaneously reducing the financing base for grid costs, it said.

"The current strongly consumption-dependent components create a permanent incentive for economical use of grid capacity, which is often unnecessary and hinders flexible demand behavior," the regulator said.

New pricing mechanisms

The consultation also explores introducing new fee components such as basic or capacity pricing.

Currently, grid fees above the low-voltage level are entirely consumption-based, despite consumption not being the primary cost driver. A flat basic fee could more accurately reflect actual costs, according to BNetzA.

For prosumers at the low-voltage level, strengthening the existing basic price component could ensure an adequate contribution to grid costs.

The regulator also questions whether direct pricing of reserved grid connection capacity would be appropriate, as connection capacity plays a significant role in network expansion.

Dynamic grid fees that would translate network utilization into time-differentiated local price signals are another option under consideration.

A simpler preliminary form would be static time-variable grid fees, with different tariff levels set well in advance, changing rarely and typically applying to large areas.

To ensure system-friendly integration of storage facilities, the discussion paper separately addresses fees for storage users.

The consultation comes after a 2021 ruling by the European Court of Justice that determined BNetzA must regulate networks independently and make autonomous regulations in the area of grid fee regulation, it said.

The framework determination will reregulate the principles of the electricity grid fee system previously set out under the Electricity Grid Fee Regulation (StromNEV).

Stakeholders can submit comments on the discussion paper until June 30.

Germany's ruling CDU/CSU and SPD parties plan to allocate some Eur23 billion over the 2025-29 to halve grid fees, which doubled to over Eur60/MWh in recent years.