German Minister proposes subsidies for stabilizing electricity network fees

German Economy Minister Robert Habeck proposed Tuesday subsidies to stabilize fluctuations of electricity network fees. Consumers and businesses are bearing the brunt due to high energy costs, which have hindered investment and production.

Habeck, speaking at a Berlin industry conference, said that the subsidies would be "a short-term measure" for 2025. They could be technically implemented by a 2024 supplementary budget.

In Germany, the cost of using the electricity network accounts for around 20%. High energy prices are also affecting the production and competitiveness of German companies, resulting in a negative impact on the economy.

The cost of grid improvements to accommodate large volumes of renewable energy is likely to reach several hundred billions euros by 2045.

Habeck stated that the preparations for the subsidy were completed, but that the proposal's prospects are uncertain in the current legislative session after the collapse of Germany’s ruling coalition.

Habeck believes that the costs of expanding Germany's electrical network to accommodate decentralized wind and solar power should be spread over generations in the medium-term. This effort will cost consumers around 450 billion euro by 2045.

Habeck wanted to further reduce electricity prices, which are among the highest in Europe. He was for a reduction of electricity tax at the European Minimum for all consumers.

Habeck said that the electricity price would drop by 2 cents per kilowatt hour. (Reporting and editing by Miranda Murray, Bernadette B. Baum and Bernadette Murray)

(source: Reuters)