- Germany’s network agency plans to distribute the €450 billion renewable energy grid expansion cost more evenly across the country, addressing regional disparities in electricity prices.
- The initiative aims to support Germany’s goal of 80% renewable electricity by 2030 and climate neutrality by 2045, focusing on fairness between northern and southern states.
- The agency will assess network operators’ costs and financially compensate those disproportionately affected. A detailed plan is expected by mid-October.
Germany’s network agency announced a new strategy on Friday, August 30, to distribute the financial burden of integrating renewable energy into the power grid more evenly across the country. This plan emerges as Germany faces an estimated €450 billion ($498.4 billion) in grid expansion costs by 2045. The initiative supports Germany’s goal to cover 80% of its electricity needs with renewables by 2030 and achieve climate neutrality by 2045.
The plan addresses growing disparities in electricity costs between northern and southern states. Northern Germany faces higher electricity prices despite abundant wind power. The high costs of connecting wind turbines to the grid in sparsely populated areas drive these prices up, leading to higher per capita costs.
Eastern Germany experiences a 22% higher electricity price than the West, even when adjusted for purchasing power. This disparity creates a significant obstacle to public support for renewable energy expansion.
The new regulations enable the Federal Network Agency to identify network operators facing exceptionally high costs due to renewable energy integration. These operators will receive financial compensation, and electricity consumers nationwide will share the additional costs more evenly.
As president of the Federal Network Agency, Klaus Mueller emphasised the collective effort required for the energy transition, stating, “Investments in the grids benefit everyone.”
The agency plans to refine the specifics of the new model in the coming months. The approach will start by assessing whether a network operator faces disproportionate costs from renewable energy expansion. By mid-October, the agency expects to provide detailed estimates of the extra expenses and specific relief measures for individual network operators.
Germany is also considering establishing a special government fund to help distribute the costs of electricity network expansion across generations.
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