Red-Greens want to reduce electricity costs - search for majority

Berlin (dpa) - The red-green minority government wants to relieve companies of the burden of high electricity costs. In a circular procedure, the Federal Cabinet approved a proposal for a federal subsidy for grid costs in the coming year, as announced by the Ministry of Economics. Economics Minister Robert Habeck (Greens) explained that grid fees should be curbed in the short term for 2025. "Parliament now has the basis to decide on the relief quickly. I am campaigning for us to reach an agreement here quickly - in the interests of the economy and consumers."

The red-green coalition with the FDP no longer has a majority in the Bundestag following the collapse of the traffic light coalition. Habeck and Chancellor Olaf Scholz (SPD) have long been campaigning for a reduction in grid fees in the face of massive demands from industry. They are a component of the electricity price and are rising due to the high costs of expanding the electricity grid.

Union: Habeck is patching things up

The CDU/CSU rejected the red-green government's proposal. "This proposal is inadequate, half-baked and unfunded," said CDU/CSU parliamentary group deputy Andreas Jung to the Handelsblatt newspaper. Even the financing of the planned 1.3 billion euros remains completely open. In addition, it is unclear how the technical implementation could even take place at the beginning of the year in view of a decision at the end of December. "We need a big plan with reliability instead of hectic window dressing."

Jens Spahn, deputy leader of the parliamentary group, added: "Robert Habeck is frantically patching things up. For three years, he has driven German industry into crisis, now he is coming around the corner with half-baked mini-solutions." This law will not meet with their approval.

Thousands of kilometers of new power lines are expensive

Thousands of kilometers of new power lines are needed so that wind power, which is mainly produced in the north, can reach large consumption centers in the south. This will cost many billions. According to the ministry, rising grid fees are a burden on end customers, as these costs are passed on to the electricity price. Low-income households in particular suffer from the high energy costs. A state subsidy would alleviate this burden.

Red-Greens want to change the law

Specifically, the cabinet decision concerns changes to energy industry law - technically, it is a formulation aid for the coalition parties. According to a spokesperson for the Ministry of Economic Affairs, the subsidy for the pro rata financing of transmission grid costs of up to 1.32 billion euros for the calendar year 2025 is to be financed by federal funds. The subsidy will reduce the level of transmission grid costs, which are to be refinanced via the grid fees, and will therefore benefit all consumers.

It is conceivable that part of the Intel funding actually earmarked will be used for financing. The funds will be freed up by the postponement at the Intel chip plant in Magdeburg. According to the comparison portal Verivox, the discontinuation of the billion-euro federal subsidy for transmission grid fees also had a significant impact on consumers. Last year, grid fees rose by an unprecedented 23.4 percent to a new record level. At 30 percent, the share of grid fees in the electricity price is currently significantly higher than in previous years.

Location under pressure

The industry has long complained about the high cost of electricity compared to other countries. A federal subsidy of up to 5.5 billion euros was actually planned for this year to proportionally finance the transmission grid costs. However, as a result of a budget ruling by the Federal Constitutional Court, the federal government had canceled this subsidy to save money. The lack of a subsidy is a particular burden on energy-intensive industry. Habeck said that a reduction in grid fees in the coming year was important for companies, but also for consumers. "Germany as an industrial location is under pressure and we should do everything we can to strengthen its competitiveness. To achieve this, electricity prices in particular must come down. Grid costs are part of this."

Fundamental reform required

In the medium term, the grid fees would have to be comprehensively refinanced, said Habeck. "The high initial costs of the climate-neutral electricity system should not be unilaterally passed on to current consumers. After all, this is a development effort for future generations." Habeck had already suggested spreading the costs of expanding the electricity grids over time. With an "amortization account", the costs for investments in grid expansion could be distributed much more evenly between current and future users. Such an account already exists for the development of a hydrogen network.