Germany to subsidise electric bills with 12.7 billion euro grid fee payment, sources say

Germany will subsidise consumer power bills next year by paying 12.7 billion euros (US$12.6 billion) towards the usage fees charged by the four high-voltage transmission grid companies (TSOs), government and industry sources said on Wednesday.

The fees form part of electricity bills, accounting for around 10% of overall costs for retail customers and around a third for industrial companies in sectors such as steel or chemicals.

The intervention could stabilise the fees, the sources said, which otherwise were set to jump given runaway wholesale power prices and rising operational costs for the TSOs.

The sources spoke as the TSOs prepare to release their network fees for next year.

The rising TSO costs are related to interventions to manage grid flows and stabilise systems in Europe, where Germany is the biggest power market and transit country.

France has experienced technical problems at its nuclear reactor fleet while droughts have curbed river transportion of coal to power stations, tightened water supply at river-based plants and lowered run rates at hydroelectric plants.

There are also increasing fluctuations in the feed-in of wind and solar power, with the number of generation units expanding under a long-term roll-out of green energy, although Germany is also reactivating some conventional power plants as it responds to a drop in Russian fuel imports.

All these factors are causing more erratic than normal grid flows, which the TSOs - Amprion, 50Hertz, TransnetBW and Tennet - must balance at a time when costs of equipment and labour are rising.