Reform of electricity network charges must benefit consumers and help protect the climate

• Consumer protection experts and industry appeal to policy-makers to come up with regulations that benefit consumers and help protect the climate, during the planned reform of network charges.
• Joint call on the Federal Minister for Economic Affairs and Energy to support the “time-of-use” pricing model.
• Expert report from the vzbv shows that the proposed model takes consumer interests and grid stability into account.

The German Government wishes to revise the rules governing the integration of electric vehicles and heat pumps into the electricity grid. Wherever possible, customers should consume power during off-peak periods. The politicians assume that the transition to renewable energy will see millions of electric cars and electrically powered heat pumps drawing electricity from the grid. The planned reform of the network charges should protect against overloading of the networks. The Federation of German Consumer Organisations (vzbv), the German Association of the Automotive Industry (VDA) and the German Heat Pump Association (BWP) have written an open letter to Federal Economics Minister Peter Altmaier, other federal ministers and members of the Bundestag, asking them to support the application of time-of-use tariffs, drive forward digitization of the grids, and encourage grid operators to increase flexibility in the near future.

“The planned reform of network charges is a great opportunity to enhance climate protection, promote flexibility and reduce electricity costs for consumers. However, to achieve this the German Government must give its support to time-of-use tariffs as the standard model. The proposal offers consumers a wide choice of tariffs along with lower costs. If consumers charge their electric cars at night and thus relieve demand on the grid, this will also be good for their electricity bills. This will create incentives to switch to electric mobility, which will help protect the climate,” said Klaus Müller, Executive Director of the vzbv.

“The planned reform will enable the German Government to make a key contribution to ramping up electric mobility and thus to climate protection – if the project is properly implemented. This will include the application of time-of-use price tariffs. Focusing solely on reducing peak demand in combination with additional fees for unlimited consumption can lead to steep price rises,” VDA President Hildegard Müller explained. “If the owners of electric cars receive a guaranteed service only on very high tariffs, that could put the ramp-up of electric mobility at risk and jeopardize the goal of carbon-free mobility.”

“Controllable heat pumps already help to stabilize the energy system. If the network charges are reformed, it will be essential to ensure that over one million heat pump owners are not put at a financial disadvantage. Focusing solely on the model of reducing peaks in demand must not result in new obstacles to switching from fossil-fuel heating systems to climate-friendly heat pumps,” according to BWP chair Paul Waning.

Making electricity consumption more flexible

The generation of electricity is subject to increasing fluctuation due to the growth in renewable energy. One option for balancing out these fluctuations more effectively is to match consumption more closely to generation. Making consumption more flexible can and must improve grid utilization and thus reduce the price per kilowatt hour.

Good for consumers and the climate

The electrification and intelligent networking of transport, buildings and industry will play a major role in achieving Germany’s climate goals. Against the background of the shift to sustainable mobility and the associated increase in private charging equipment for electric vehicles, and electrification in the building sector owing to electric heat pumps, consumers are now turning their attention to the options for flexible electricity consumption. Some e-cars could be charged at night, with the operation of heat pumps interrupted for a limited period.

Associations demand time-of-use network charges as standard consumer-friendly approach

The associations reject the “reducing peak loads” approach as the general solution. Instead they call for support for “time-of-use network charges.” This means that consumers would be offered differing prices depending on the time of day, and would then adjust their consumption accordingly. They would be able to make these adjustments themselves. For example, consumers could charge their e-cars and/or operate their heat pumps when demand is low and electricity is cheaper.

An expert report on behalf of the vzbv also concluded that time-of-use network charges as the standard solution should be legally anchored in the Energy Industry Act during the planned reform.

Press contacts:

German Association of the Automotive Industry (VDA)

Eckehart Rotter, tel.: +49 30 897842-120, e-mail: eckehart.rotter@vda.de

Federation of German Consumer Organisations (vzbv)

Franka Kühn, tel.: +49 30 25800-525, e-mail: presse@vzbv.de

German Heat Pump Association (BWP)

Katja Weinhold, tel.: +49 30 208799716, e-mail: weinhold@waermepumpe.de