Reform of industrial network charges
The Federal Network Agency has published a key issues paper on the further development of industrial grid fees in the electricity sector. The plan is to replace the existing financial incentives such as atypical grid usage and the individual grid fee in the near future. In future, “grid-friendly behavior” is to replace the current ones.
Dear readers,
The current grid fee system in the electricity sector includes various special grid fees that deviate from the general grid fees. These tariffs are intended to take account of special circumstances or encourage certain types of behavior. Particularly relevant for the industry are the special grid charges in accordance with Section 19 (2) StromNEV, which contain two privileged cases: atypical grid usage and electricity-intensive grid usage.
On 24.07.2024, the Federal Network Agency (BNetzA) presented a key issues paper that sets the course for the future design of industrial grid fees in the electricity sector. The reform aims to promote cost fairness, system stability and competitiveness. Below we summarize the most important contents and effects for industry and the energy sector.
The energy transition is significantly changing the electricity generation landscape, leading to new requirements in grid operation. The BNetzA therefore believes that an adjustment to the special grid fees is absolutely necessary.
Atypical grid usage
The term atypical grid usage describes a special form of electricity usage in which consumers deliberately deviate from the usual peak loads in the electricity grid. Electricity grids are designed in such a way that they offer sufficient capacity even during peak load times. Atypical grid usage is intended to control consumption in such a way that grid resources are used optimally and grid utilization is improved.
This measure became particularly important as the extra-high voltage grids were not originally designed for the new generation structures – with wind energy predominantly in the north and photovoltaics in the south. In order to better utilize the capacities of the existing grids, industry was encouraged to use less electricity during peak load times and to switch to off-peak times instead. Such behavior relieved the burden on the grid and brought both economic and technical benefits, which were rewarded in the form of reduced grid fees.
However, grid expansion has made significant progress in recent years. The transmission grids are now so well developed that atypical grid usage no longer offers any significant technical or economic advantage.
Individual grid fee
Individual grid charges, which are granted in accordance with the Electricity Grid Charges Ordinance (StromNEV) under certain criteria such as an annual consumption of at least 10 GWh and 7,000 hours of use, are aimed at relieving the burden on energy-intensive companies and promoting even grid usage. This regulation also supports the utilization of base load power plants, particularly during off-peak periods.
Companies that meet the criteria can negotiate individual grid fees that are significantly lower than the regular tariffs. In some cases, the grid fee can even be reduced to almost zero if the benefit for the grid is correspondingly high. However, this privileged treatment means that other consumers – such as smaller companies or private customers – have to bear a larger share of the grid costs in order to cover the total expenditure of the grid operators.
Why should the individual grid charge now be abolished?
- Fairness and burden sharing: There are concerns about fairness and burden sharing, particularly with regard to the costs for smaller consumers and private customers.
- Decreasing relevance of base load power plants: As the number of base load power plants, such as nuclear power plants, decreases, this regulation is becoming less relevant and effective.
Network-friendly behavior
The previous atypical grid usage and individual grid fees are to be replaced in future by the concept of “grid-friendly behavior”. The idea behind this is to use energy efficiently and sustainably. Essentially, commercial and industrial companies should align their electricity consumption more closely with the electricity exchange price.
If the price on the electricity exchange falls – for example because more renewable energy is being generated than is needed – this is a signal to use more energy. If, on the other hand, the price rises, for example due to low generation from renewable sources, consumption should be reduced.
The Ruling Chamber of the Federal Network Agency (BNetzA) plans to promote and specifically support this system-friendly behavior in the future. The aim is to reduce the load on the electricity grid and bring energy use more in line with the availability of renewable energy.
Original text from the BNetzAG key issues paper: “Usage behavior that has a positive effect on the costs of energy supply as a whole or on the costs of stable grid operation is considered to be beneficial to the system. In principle, grid fee privileges should be granted to those who significantly increase their consumption compared to their individual annual average during periods of particularly low prices and significantly reduce their consumption compared to their individual annual average during periods of particularly high prices.”
Economic impact on the industry
The reform could have noticeable financial consequences for electricity-intensive industries from 2029 at the latest. While some companies could benefit from bonuses through flexible load management, others may have to bear higher costs if existing privileges are removed. Companies should review their load profiles and make adjustments at an early stage in order to prepare for the new regulation.
Timetable and next steps
The key issues paper marks the start of a consultation process. Companies, associations and other stakeholders are invited to submit comments. The Federal Network Agency will draw up a final proposal based on this feedback.
Your opinion counts!
The Federal Network Agency encourages companies and associations to actively participate in the consultation. This is a unique opportunity to influence the future design of grid fees and ensure that the interests of all stakeholders are taken into account.
My personal opinion
The new regulation on “system-friendly behavior” is primarily aimed at energy-intensive companies. However, numerous discussions with such companies have shown that many find implementation challenging.
In my opinion, small and medium-sized companies in particular will be better able to cope with the requirements. For us at KBR EnergyManagement GmbH, too, the new requirement opens up promising opportunities for cost savings. Through targeted control of battery storage systems, e-charging stations, heat pumps and non-time-critical production processes, we can make our energy consumption more efficient and thus make considerable savings.
KBR is already working on innovative systems that will help to further reduce our customers’ energy costs by 2029 at the latest, thereby securing long-term benefits.
Yours, Christian Wiedemann
Head of Product Management & Power Quality
KBR GmbH
Note: This newsletter is based on the latest information from the Federal Network Agency. Changes are still possible as part of the consultation.
Further information
Further information on the key issues paper and the consultation can be found on the website of the Federal Network Agency: Federal Network Agency – Key issues paper
