Advisory Committee to BMWi Recommends Electricity Grid Charges Reflecting Grid Utilisation

The Scientific Advisory Committee to the Federal Ministry for Economic Affairs and Energy (BMWi) has published an expert opinion on “Congestion-related Payments by Users and Infrastructure Investments in Grids”, covering the transport, electricity and telecommunication sectors. For the electricity market the report recommends grid charges that reflect grid utilisation.

1. Recommendations

The report points out ways to use scarce grid infrastructure in a more efficient way in the transport, electricity and telecommunications sectors by introducing congestion-related grid charges.

For the electricity sector, the authors describe capacity constraints in view of Germany’s energy transition with a withdrawal from nuclear power by 2022 and a growing amount of renewable energy that has to be transmitted to consumers. The report mentions the two studies by the ManyElectronics Agency (dena) on the need for grid expansion dating from 2005 and 2010 (more information can be found here) and the 1,855 km of grid expansion projects that receive priority treatment under the Energy Line Extension Act (EnLAG), pointing out that only very few kilometers have so far been completed (for more information, please see here).

To deal with grid constraints and use grids more effectively the authors recommend to create the legal framework for congestion-related grid charges. To this end grid operators shall be able to charge separate tariffs for entry and exist points that reflect grid utilisation. These charges would provide a signal to market participants to adjust production and consumption according to grid utilisation, the report says. In the long-term they would also provide incentives for an efficient regional siting of power plants. Besides, the charges could also (partly) pay for the investment into the grids.

To date Section 15 para. 1 of the Electricity Grid Charges Ordinance (StromNEV) prohibits charging a tariff at an entry point. Hence, the authors recommend to abolish said provision.

2. Reaction by Economics and Energy Minister Sigmar Gabriel

In a letter to the Committee Economics and Energy Minister Gabriel (SPD) said that the coalition agreement of the ruling CDU/CSU and SPD parties foresaw a review of the grid charges to ensure a fair sharing of the investments into the grid infrastructure. The proposals made by the Advisory Committee would be included.

3. Background Information

The scientific advisory committee to BMWI is an independent body that advises BMWi with regard to economic policy matters. The committee decides itself on the matters in which it gives advice.

Source: Federal Ministry for Economic Affairs and Energy

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