Germany is one of the countries with the highest electricity prices in the world – even if you take purchasing power into account. But not all sectors suffer equally: large consumers from the chemical or aluminum industries, for example, more than IT companies. So is it only logical to subsidize the price of electricity to just a few cents for those affected, as the Greens, parts of the SPD and some federal states are demanding?
Not necessarily. There is always a certain arbitrariness attached to such measures. Where exactly do you draw the line? What about companies that fall just below this limit – possibly because they invested in energy-saving technology in a timely manner? And how long should the subsidies last? They are actually only intended as a “bridge” until renewables have largely driven expensive gas-fired power plants out of the market. But experience shows that once introduced, withdrawing subsidies is difficult.
The current electricity price is already a hodgepodge of exceptions, special cases and ad hoc solutions that governments that have long since been voted out of office have introduced at some point. The actual procurement only accounts for around half of the final price for household electricity. The rest is network fees, electricity tax, concession fees to the municipalities, taxes for combined heat and power, Section 19 NEV levy, offshore network levy, VAT.
The list shows: If there was a financial problem somewhere, a new levy was simply levied – and some of it was withdrawn again for industrial customers. One reason why industrial electricity is so much cheaper than household electricity today is “the sometimes generous exemptions for industry in network fees and levies (combined heat and power surcharge and offshore Grid connection levy)”, writes the Agora Energiewende on request. “The exceptions were introduced at the time for two reasons: firstly as an industrial subsidy, secondly as an incentive to keep electricity consumption as constant as possible, because the main electricity producers in the old system – coal and nuclear power plants – cannot ramp up and down their production as flexibly as they want. “
A particularly bizarre example is the §19 NEV levy. It is currently only a good 0.4 cents/kWh, but it is symptomatic of the entire regulatory mess. The Federal Network Agency explains it as follows: “According to Section 19 of the Electricity Network Fees Ordinance, certain final consumers have the opportunity to receive lower individual network fees from the local network operator. The transmission system operators (TSOs) must reimburse the local network operators for the revenues lost due to these lower fees. The TSOs equalize the payments for These lost revenues are divided among themselves and a surcharge is calculated on the network charges, which is passed on to all final consumers as a levy.”
Gregor Honsel has been a TR editor since 2006. He believes that many complex problems have simple, easy-to-understand, but wrong solutions.
Understood? It’s a little more understandable at E.on: “Energy-intensive companies can apply for individual reduced network fees under certain conditions” – if “the annual maximum power consumption either predictably falls during periods of low load or deviates significantly from the annual maximum load of all tapping points in the respective voltage level.”
It is therefore – quite reasonable – an incentive for companies to reduce the load on the network. But why do the network operators have to be compensated for this? Finally, the lower income is offset by a lower network load.
But instead of doing away with such special regulations, another complicated instrument is now to be added with the industrial electricity price brake, from which only some of those affected will benefit under certain conditions. It should only apply to companies that compete internationally, adhere to collective agreements, commit to transformation and provide a location guarantee. All legitimate requirements, but also things that need to be proven and controlled. Another piece of bureaucracy.
Other injustices, however, were not addressed at all for years – especially when it came to network fees. They are particularly high in the north and northeast because a lot of wind power is installed there and the electricity network is expanded accordingly, and the costs are then passed on to comparatively few consumers. The electricity generated there also benefits users, who have to pay much lower network fees. What would be fairer would be staggered network fees that are based on the actual demand on the network – both in terms of time and space. The Federal Network Agency recently announced a step in this direction.
Such radical conversions are of course complicated. But there is an even simpler solution: reduce taxes on electricity for everyone. Private customers would also benefit from this. Although high electricity prices provide an incentive to save more energy, they also stand in the way of the shift from fossil to renewable sources – for example in cars and heat pumps. Whether these are profitable depends crucially on the price difference between electricity and fossil fuels. But instead of ensuring an appropriately small gap, the governments are again relying on little measures, for example in the form of purchase bonuses for electric cars. If it were to reduce electricity taxes and raise CO₂ prices, the federal government could in return save on many funding programs.
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