In Germany, a significant change in the electricity sector is imminent from January 2024. In response to the increasing challenges that increasing electricity demand – particularly from electric cars and heat pumps – poses to existing low-voltage networks, network operators will be allowed to throttle customers’ electricity purchases under certain conditions.
Causes, background and future electricity demand in Germany
The existing low-voltage networks in Germany are currently not designed for the increasing demand for electricity, which is primarily caused by the increasing spread of electric cars and heat pumps. This poses a significant challenge to the existing network and has a significant impact on the country’s electricity needs. At the inaugural meeting of the Climate Neutral Electricity System Platform in February 2023, Federal Economics Minister Robert Habeck predicted that current electricity consumption will rise from around 550 terawatt hours to 700 to 750 terawatt hours by 2030 and may even reach the 1,000 terawatt hour mark by 2045.
In response to the trend of increasing electrification in Germany, the federal government intends to increase the share of renewable energy in electricity generation to around 80 percent by 2030, a significant increase compared to the current share of 44.6 percent, it said . This objective is reflected above all in the efforts to reduce greenhouse gas emissions through the electrification of various areas.
The transmission system operators in Germany develop a scenario framework every two years, which is examined by the Federal Network Agency and used as a basis for planning future electricity network expansion, as Bürgerdialog Stromnetz reports. This framework includes political climate goals as well as transformation in various economic sectors and includes three scenarios (A, B and C) that show ways in which Germany could achieve a climate-neutral energy supply by 2045, it continues. In all scenarios, a significant increase in electricity generation from renewable sources is expected by 2037. The switch to battery-powered vehicles, the use of heat pumps and power-to-heat systems as well as the increased demand for electricity in industry, especially for the production of environmentally friendly hydrogen, are contributing significantly to this increase.
In order to ultimately respond to this development, the Federal Network Agency introduced an amendment to the Energy Industry Act that enables grid-oriented control. This innovation is intended to help adapt the low-voltage networks to the sharp increase in electricity demand in the future and to ensure security of supply in Germany. But how should network-oriented control work?
This is the new regulation from January 2024
The new regulations will come into force as early as January 2024, allowing network operators to restrict customers’ electricity purchases in certain situations in order to prevent overloads on the electricity network, as the Federal Network Agency reports in an online article. In particular, network operators are allowed to temporarily throttle the electricity consumption of new controllable heat pumps or wall charging stations, the so-called wallboxes. During such overload periods, network operators are allowed to reduce the power supply to up to 4.2 kilowatts, according to the Federal Network Agency. This reduced minimum output allows heat pumps to continue to operate and electric cars to charge for a distance of 50 kilometers in around two hours, while regular household electricity remains unaffected by this measure.
The legal basis for these regulations is Section 14a of the Energy Industry Act, which will be valid from January 2024. The law determines which consumers are affected by the throttling and that the network fee must be reduced accordingly, as it goes on to say. In compensation for the grid-oriented control of their devices, affected households receive a discount, which is paid out either as an annual flat rate in the network fee or as a reduction of the electricity labor price by 60 percent for the affected devices. According to the Federal Network Agency, from 2025 onwards, consumers will also have the option of choosing a time-variable network fee, which provides for lower costs in times of low network utilization.
However, the Federal Network Agency assumes that such interventions by network operators will only be necessary in rare, exceptional cases and will not be associated with any significant loss of comfort. In order to ensure transparency, network operators are obliged to publish such control interventions on common internet platforms. This is intended to enable the public to understand overload problems in individual network areas. Long-term transitional regulations apply to existing systems that already have an agreement for control by the network operator. Investments without such an agreement will remain permanently exempt from the new rules, but can participate voluntarily. Night storage heaters are permanently exempt from the new regulations, as it concludes.
Critical voices from politics
The regulations, which will come into force in Germany in January 2024, have provoked a number of reactions and points of criticism. The FDP energy expert Michael Kruse described the plans to the Bild newspaper as an “expression of political failure” and expressed concerns that the switch to electromobility could be at risk if consumers only had electricity available sporadically for their vehicles. This criticism underscores concerns that frequent cuts could weaken support for the energy transition in Germany.
Kruse emphasized that network operators who reduce electricity purchases are also responsible for the rapid expansion of the network. This view is also shared by the Federal Network Agency, whose President Klaus Müller emphasized that such interventions in the power supply should only take place in exceptional cases, as it goes on to say.
The “Bild” newspaper and Mark Helfrich, energy policy spokesman for the Union parliamentary group, spoke out in favor of viewing electricity cuts as an emergency instrument. Helfrich warned that without quickly charged electric cars and warm houses, the mobility and heating transition would fail. The Federal Network Agency pointed out that most consumers would hardly notice the interventions because household electricity was not affected and a minimum performance was guaranteed, as it concluded.
D. Maier / editorial team finanzen.net