Bavaria rejects German grid regulator鈥檚 plans for different power price zones
S眉ddeutsche Zeitung / Neue Osnabr眉cker Zeitung
The government of Bavaria has rejected a proposal by Germany鈥檚 Federal Network Agency (BNetzA) to reform the country鈥檚 electricity price system to relieve cost pressure for regions with a high share of renewable energy sources. Splitting up Germany into different power price zones would be 鈥渁 big mistake,鈥 said Markus S枚der, conservative CSU state premier of the southern economic powerhouse state. A reform that reduces costs for regions with a high share of renewables, especially wind turbines in northern Germany, would result in 鈥渁pplying the axe to Germany as an industry location and threatening southern Germany鈥檚 role as the economic heartland鈥 of the country, S枚der argued in an聽聽with the S眉ddeutsche Zeitung. The state premier faces a state election on 8 October where he hopes to keep his party the dominant political force in Bavaria.
BNetzA head Klaus M眉ller had聽聽newspaper Neue Osnabr眉cker Zeitung that the current system puts a burden on regions with a higher share of renewable energy, as they tend to pay higher fees to grid operators for connecting scattered wind turbines and solar PV arrays with the electricity grid and operating it. That means that consumers in southern German states with less renewable capacity often pay lower prices for electricity. Parliament would need to work on a law reform that replaces this 鈥渉istorically grown鈥 system with one where the BNetzA has direct control over the grid fees paid by consumers in each region of the country, which would also benefit the southern German regions providing a lot of renewable power capacity. 鈥淥bviously, we should be rewarding renewables expansion,鈥 M眉ller said.
Germany鈥檚 states have been聽arguing over a grid fee reform for months. While northern state leaders have repeatedly criticised the current system for effectively penalising their renewable energy expansion efforts, southern state leaders generally reject the idea of splitting the country into different prize zones arguing that this would undermine the integrity of the country鈥檚 economy. The country should instead aim for an accelerated expansion of the electricity transmission grids to transport renewable power to the south and better framework conditions for聽storage聽facilities and hydrogen production. The EU and neighbouring countries have also called on Germany to split its price zone, as the lagging grid expansion in the country has led to costly problems, such as so-called "loop flows". The EU Agency for the Cooperation of Energy Regulators (ACER) in 2022 a split-up of Germany鈥檚 power price zone to encourage interregional trade and enable more cost-efficient investments in clean technologies.