Federal government plans lower subsidies for grid charges in 2027 – households face additional costs

Costs for households

Overall, the funding cut corresponds to an increase in average electricity grid fees for households of around 3 percent. Average electricity prices for households would therefore likely rise by around 1 percent. According to Verivox, the elimination of one billion euros in subsidies means an increase of around 0.25 cents net per kilowatt hour.

Grid charges are fees that grid operators levy for the use of the electricity grids. They flow primarily into operation, maintenance, and grid expansion. In the course of the energy transition, thousands of kilometers of new power lines are planned so that wind power produced mainly in the north can reach large consumption centers in the south. Grid charges account for about a quarter of the electricity price; more than grid charges, end consumers are burdened by taxes, levies, and surcharges, which on average make up 34 percent of the electricity price.

Burden on industry

This year's subsidy of 6.5 billion euros had, according to Verivox, reduced average low-voltage grid charges for households by around 1.7 cents per kWh net. The German Association of Energy and Water Industries (BDEW) stated: For consumers, this means that the relief on grid charges in 2027 is likely to be somewhat weaker than in 2026 due to the lower volume.

The BDEW is calling as an alternative for the electricity tax to be reduced for everyone, including household customers, to the European minimum of 0.1 cents per kilowatt hour (currently 2.05 cents per kilowatt hour). "In this way, the relief would reach all consumers immediately and at the same level," the association's statement says. The federation argues that reducing the electricity tax would reach households more directly than subsidizing through transmission grid charges.

Regional differences

From the perspective of energy-intensive industry, the planned cuts weigh significantly more heavily. Kerstin Maria Rippel, Managing Director of the Steel Industry Association, warned: "For the steel industry alone, this threatens additional grid costs of around 50 million euros per year – an increase of around 20 percent." Rippel also criticized, "Just recently, the explosive rise in grid charges was reversed and the 2023 level was restored" – the planned cut now calls this relief into question again. Charges had risen significantly in recent years, mainly due to the high costs of grid expansion.

Transmission grid operator TenneT also commented on the plans. A spokesperson said it would be "conducive" for electricity customers if the subsidies for grid charges were committed to over a longer period. TenneT announced that the preliminary grid charges for 2027 were to be published on 1 October. The federal government has meanwhile passed a state-subsidized industrial electricity price to relieve energy-intensive companies.

As Storck explained, regional differences are significant: "Grid areas that generate a lot of electricity themselves are less dependent on transmission grid charges. Less of the additional burden would be passed on there than in grid areas with lower electricity generation." The BDEW also emphasized that the state subsidy initially reduces transmission grid charges, which has a positive effect on industrial customers directly connected to the transmission grid as well as on the downstream distribution grids.

The final grid charges for 2027 will only be determined after the publication of the preliminary figures in early October. Until then, it remains unclear to what extent the planned funding cut will actually feed through to end customers' electricity bills.