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ENERGY

German government pledges to subsidise rising electricity bills

For most electricity customers in Germany, grid fees are set to rise next year. But the government plans to inject €13 billion to ease the burden on consumers.

A few lights on in a Leipzig housing block. Electricity prices have been rising in Germany.
A few lights on in a Leipzig housing block. Electricity prices have been rising in Germany. Photo: picture alliance/dpa | Jan Woitas

The four major transmission system operators (TSOs) said the price of grid fees would be set at an average of 3.12 cents per kilowatt hour next year, slightly higher than the current average of 3.08 cents/kWh. For the first time, the cost will be at the same level across Germany.

Grid fees form part of the electricity bills paid by consumers, along with other taxes and production costs. The charges make up about 10 percent of private customer bills. 

Those who live in the area of the network operator Tennet, which supplies Lower Saxony, Schleswig-Holstein and parts of Hesse and Bavaria, can, however, expect a slight decrease in the network fee.

In the rest of the country, grid fees currently stand somewhere between 2.94 and 3.04 cents per kWh. The four TSOs – 50Hertz, Amprion, Transnet BW and Tennet – said the price increases were due to the higher costs needed for procuring energy, following Russia’s invasion of Ukraine. 

READ ALSO: Why electric fan heaters could make energy crisis worse

The cost for transmission networks has more than tripled from €5 billion to €18 billion.

To ensure that grid fees for customers do not also more than triple, the German government has pledged to give a subsidy of €13 billion.

“We are now making sure that these cost increases are absorbed, thereby preventing an additional burden for industrial companies, small and medium-sized businesses and consumers,” said German Economic and Climate Minister Robert Habeck. “We will use almost €13 billion to keep costs down.”

He said this would be carried out in connection with the planned electricity price cap.

READ ALSO: Germany to spend €200 billion to cap soaring energy costs

The coalition government, made up of the Social Democrats, Greens and Free Democrats, is planning to dampen grid fees in the medium term by skimming off high windfall profits from electricity producers to fund a price cap. 

The money for the subsidy will also be covered by Germany’s Renewable Energy Act (EEG) funding. Electricity customers in Germany had to pay an EEG levy, aimed at boosting renewable energy, up until it was dropped earlier this year due to spiralling prices. 

The German Association of Energy and Water Industries (BDEW) called on the coalition to take action quickly and introduce subsidies.

“It is right that a state subsidy is planned for this exceptional situation,” said Kerstin Andreae of BDEW.

The significantly higher costs would otherwise lead to increased network fees that customers would have to pay, Andreae said. 

READ ALSO: German households see record hikes in heating costs 

Vocabulary 

Network fees/charges – (die) Netzentgelte

Electricity price – (der) Strompreis

Consumers – (die) Verbraucher

To increase/rise – steigen

We’re aiming to help our readers improve their German by translating vocabulary from some of our news stories. Did you find this article useful? Let us know.

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ENERGY

Norway and Germany seek Nato-led cooperation for key undersea structures

Germany and Norway want to start a NATO-led alliance to protect critical underwater infrastructure, their leaders said on Wednesday, weeks after explosions hit two key gas pipelines in the fallout from the war in Ukraine.

Norway and Germany seek Nato-led cooperation for key undersea structures

 “We are in the process of asking the NATO Secretary General to set up a coordination office for the protection of underwater infrastructure,” German Chancellor Olaf Scholz told a press conference in Berlin.

“We take the protection of our critical infrastructure very seriously and nobody should believe that attacks will remain without consequences,” he said.

Norwegian Prime Minister Jonas Gahr Store said the alliance would be “an informal initiative to exchange between civilian and also military actors” with NATO providing “a centre, a coordination point”.

Underwater cables and pipelines were “arteries of the modern economy” and it was necessary to create “a coordinated joint effort to ensure security for this infrastructure”, he said.

Scholz said he and Store would propose the plan to NATO Secretary General Jens Stoltenberg, who is due in Berlin for a security conference. The Nord Stream 1 and 2 gas pipelines off the Danish island of Bornholm were targeted by two huge explosions at the end of September.

The pipelines, which connect Russia to Germany, had been at the centre of geopolitical tensions as Moscow cut gas supplies to Europe in suspected
retaliation to Western sanctions over the invasion of Ukraine.

Although they were not in operation when the leaks occurred, they both still contained gas which spewed up through the water and into the atmosphere.

Russia and Western countries, particularly the United States, have traded bitter barbs over who is responsible for the blasts.

Several European countries have since taken steps to increase security around critical infrastructure. 

The G7 interior ministers warned earlier this month at a meeting in Germany that the Nord Stream explosions had highlighted “the need to better protect our critical infrastructure”.

Norway has become Europe’s main gas supplier in the wake of the war in Ukraine, taking the place of Russia.

The Scandinavian country has a vast network of pipelines, stretching for almost 9,000 kilometres, linking it to the continent, which experts have said are at risk of sabotage.

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