Reiche expects medium-term falling electricity prices through accelerated grid expansion

Reiche pointed out that the expansion of renewable energies should take place specifically where sufficient grid capacities already exist. "Gleichzeitig geben wir klare Signale, wo dieser Ausbau stattfinden soll – nämlich dort, wo ausreichend Netzkapazitäten vorhanden sind", she is quoted as saying. This applies to more than 90 percent of German substations, including in wind priority areas. "Es gibt ausreichend gute Standorte und Projekte", said Reiche.

A prerequisite for falling electricity prices, however, is a reliable investment environment and a significantly faster conversion and expansion of the transmission grids, the minister emphasized. Currently, grid bottlenecks are slowing down the expansion of new wind and solar capacity, because electricity from windy regions in the north and east cannot always be transported unhindered to the consumption centers in the west and south. Without the elimination of these bottlenecks, the electricity supply will remain scarce and therefore expensive.

Criticism from business and associations

Criticism of the previous subsidy policy came, among others, from the Bund für die EEG-Förderung 17. The association sees the existing surcharge mechanisms as a burden on innovative projects and calls for a fundamental reform so that investments in renewable energies and storage technologies pay off more again. From the perspective of the federal government's reform plans, subsidy funds should in future be concentrated more on locations with grid capacity than on an even distribution across the country.

The Association of the Chemical Industry had also recently pointed out high electricity costs as a locational disadvantage and demanded more planning security for energy-intensive companies. The industry is one of the largest electricity consumers in Germany and reacts particularly sensitively to price fluctuations. Falling exchange electricity prices could improve competitiveness in the medium term, provided grid fees and surcharges do not rise at the same time.

Accelerated approvals as the key

Reiche emphasized that the federal government wants to shorten the approval procedures for power lines and wind turbines and to advance the digitalization of grid control. This should significantly reduce the period between planning and commissioning. Business associations had recently repeatedly complained that approvals for large line projects sometimes took decades and thus delayed investments.

With regard to consumers, the Ministry of Economics pointed out that a large part of the burden came from taxes, levies and surcharges and not from the pure exchange price. Falling wholesale prices would therefore only have a noticeable effect on households if the state-regulated price components were simultaneously reviewed for their effectiveness.

Outlook: Falling prices not in the short term

Overall, the minister's statements outline a course that aims for stronger market orientation and a more consistent alignment of expansion with the existing grid infrastructure. According to Reiche, the next steps are to be the adoption of the reform plans and the completion of ongoing planning approval procedures. However, according to observers, it is likely to take several years before falling prices are actually noticeable on electricity bills.

How quickly the grid expansion actually progresses also depends on the federal states and municipalities that issue approvals for routes and installations. Reiche called on those involved to cooperate constructively, but at the same time warned against too high expectations of short-term price reductions.

At the same time, the minister made it clear that security of supply continues to take precedence. An accelerated expansion of renewable energies must not come at the expense of grid stability. The electricity supply in Germany is considered one of the safest in Europe, and this standard should also be maintained during the transformation of the energy system.