Increase in forthcoming energy costs expected
In 2024, German consumers are bracing for a change in electricity costs. Despite the end of the gas and electricity price brakes, which were intended to protect consumers from high energy prices, the average grid fee for electricity is still expected to be 6.43 cents per kilowatt-hour, as previously announced by TransnetBW.
These grid fees are included in the unit prices for electricity at energy service providers, and the early end of the price brakes does not affect this fact. The price brakes, which capped costs based on previous years' consumption, will end in December, and the end of these brakes does not affect the grid fees adjustments by transmission grid operators for 2024.
In 2023, grid fees were at 3.12 cents per kilowatt-hour due to a subsidy from the Economic Stabilization Fund. However, with the discontinuation of these subsidies, consumers can expect relatively high electricity costs. Household electricity prices for basic supplier contracts are projected to be around 46 euro cents per kilowatt-hour as of April 2024. This reflects a price level still above pre-crisis values despite decreases from the 2022 peak.
A new surcharge may also be introduced to fund gas-fired power plants aimed at providing backup capacity during low renewable energy production periods. This levy, expected to be around two cents per kilowatt-hour, would add to consumer grid fees and is considered potentially costly by some political voices.
However, certain exemptions from grid fees, such as for battery storage systems, are currently in place until at least the end of 2028 or potentially extended to 2034. This may mitigate some cost increases related to grid fees for specific technologies.
The Federal Constitutional Court's budgetary ruling on the Energy and Climate Fund will also impact energy prices in Germany. For 2024, a subsidy of 5.5 billion euros from the Economic Stabilization Fund was initially planned to stabilize transmission grid fees, but this will no longer be provided. As a result, transmission grid operators 50Hertz, Amprion, TenneT, and TransnetBW are adjusting their grid fees for 2024.
Despite these changes, a strong price shock is not expected for many customers due to the decrease in energy prices in recent months. However, the ongoing reforms to grid fee structures suggest further changes to cost allocation may occur in the medium term.
The grid fees, which are included in the unit prices for electricity at energy service providers, are expected to remain at 6.43 cents per kilowatt-hour in 2024, even after the end of the price brakes. A new surcharge, to fund gas-fired power plants, is anticipated to be introduced, potentially adding about two cents per kilowatt-hour to consumer grid fees.
