Germany’s Energy Burden

Germany's Energy Burden

A study by Enportal, an energy procurement advisor for businesses in Germany, shows that network fees are becoming a significant burden for companies. According to the analysis, which was reported by “Spiegel” the cost of network fees for the typical consumption of a mid-sized industrial enterprise has risen sharply in many cities since 2021. For example, in Munich, the increase was 109%, in Frankfurt am Main 98% and in Düsseldorf 96%. Network fees currently make up about 28% of the average price of electricity, but this varies regionally.

One reason for the increase is the billions of euros being invested in network expansion, which are financed through fees. Additionally, costs related to network congestion, such as when grid operators in northern Germany temporarily throttle wind turbines and power plants in the south step in, contribute to the increase.

According to the coalition agreement, the Union and SPD plan to cap network fees for electricity “permanently” in order to relieve companies and households. However, there is no relief in sight for gas network fees. According to Enportal, gas network fees for a mid-sized industrial enterprise in Dresden have risen by 154% since 2021 and by 73% in Munich. This is due to factors such as a shift towards more environmentally friendly alternatives and a weak economic outlook, as grid operators tend to pass on costs to a decreasing number of gas consumers and a declining demand.