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Germany is well wired: the power grid from low to high voltage is 1.8 million kilometers long.

Nevertheless, large power plants and large factories are often right next to each other, as if electricity could only be transported over short distances.

The reasons for this are partly historical, partly current.

Now, however, the German energy transition is breaking the traditional neighborhood between electricity producers and electricity consumers - with potentially drastic consequences.

In any case, there is an alarm mood in the aluminum, steel and chemical industries.

The industries that are particularly dependent on competitive energy prices suddenly notice that the coal and nuclear phase-out also have very special consequences that nobody had foreseen.

The costs of your grid connection, one of the biggest items on the electricity bill, have doubled in some cases practically overnight.

Additional costs up to giving up existence

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The effect has so far only affected a few large electricity consumers, but it should soon be felt across the board and put a considerable strain on the competitiveness of the German basic materials industry.

The companies, which with hundreds of thousands of employees are the starting point for far-reaching value chains, “will face substantial additional costs in the foreseeable future and even give up their existence,” says an internal working paper of the Association of Industrial Energy and Power Management (ViK), which WELT is available.

The advocacy group of large industrial electricity consumers sees the explosive development of network usage charges as a "threat to the location".

In essence, it is about the financing system of the German electricity grid as a whole.

According to Paragraph 19.2 of the Electricity Network Charges Ordinance (StromNEV), the amount of the network usage charges for large industrial consumers is calculated according to the “physical path to the nearest suitable power plant”.

But with the shutdown of more and more coal and nuclear power plants, the next suitable power plant is suddenly closed.

The nearest power generator that would still be suitable to supply a large steel or chemical plant with the necessary amount of electricity is then suddenly hundreds of kilometers away.

The costs of using the network increase sharply with distance.

Aluhütte measures Moorburg power plant

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This is the experience of the Trimet aluminum smelter with its Hamburg plant.

The largest electricity consumer in the Hanseatic city has so far been supplied by the nearby Moorburg power plant in the port of Hamburg.

But the operator Vattenfall shut down the coal-fired power plant for a short time at the turn of the year.

Moorburg coal-fired power station in the port of Hamburg

Source: Pressebild.de/Bertold Fabricius

The responsible network operator in Brokdorf, Schleswig-Holstein identified the next suitable power plant that would be able to supply the Trimet plant in Hamburg, which alone accounts for almost 1 percent of German electricity consumption.

However, the distance to the nuclear power plant there is around 70 kilometers, ten times the previous network length between the aluminum plant and its previous supplier in Hamburg-Moorburg.

A leading Trimet employee confirms that the network costs "have more than doubled."

The additional costs - according to reports it is a high single-digit to double-digit million euro amount - should be entirely at the expense of the profit margin of the location, which is under high international competitive pressure.

And the costs will soon continue to rise.

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Because by the end of 2022 at the latest, the lights will go out forever at the Brokdorf nuclear power plant due to the federal government's decision to phase out nuclear power.

In the entire metropolitan region of Hamburg up to the Danish border there will then no longer be any large power plants.

Trimet managers have identified the next suitable power plant in Bremen, which would then set prices according to the provisions of the Fee Ordinance.

Distance to the Hamburg Trimet melting furnace: almost 100 kilometers.

The network costs are correspondingly higher.

But in the Bremen plant - a coal-fired power station - "the social plans are already being written for the employees," sighs a Trimet manager.

The reason is the politically decreed coal phase-out.

This means that power plants at even greater distances should soon become the main factor in calculating network charges.

Trimet also operates locations in North Rhine-Westphalia, which are likely to face the same problem soon because of the rampant power plant dying there too.

Changing the formula for calculating the network usage charges would be a time-consuming process.

Because the corresponding regulation applies to all large-scale consumers with more than 7,000 hours of electricity consumption and ten gigawatt hours of annual consumption - and thus most of German heavy industry, which in turn accounts for almost half of German electricity consumption.

The companies therefore co-finance a large part of the German electricity network through their network usage fees.

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And the network expansion in the course of the energy transition will cost many more billions in the next few years.

It is therefore important to find a regulation that neither reduces the international competitiveness of the German aluminum, steel, chemical and cement industries nor excessively increases the cost burden for other electricity consumers: a complex challenge.

The Federal Network Agency considers the new burdens to be bearable.

She is aware of "individual, larger cases" in which the costs of the network charges to be paid could double.

But these companies still benefit from the discounts of the network fee regulation.

The companies only paid a fifth of the network charges of other end consumers.

Cost increases in the high one- or two-digit million euro range "appear extremely unlikely and should only affect genuine exceptional cases."

Christian Seyfert, Managing Director of the Association of the Industrial Energy and Power Industry, does not want to leave this "trivialization" of the problem by the Federal Network Agency as it is.

The fact that large energy-intensive companies only have to pay around 20 percent of the normal network charges is not a “gift”, but an essential requirement for industries in international competition.

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Foreign competitors often built their own power lines to the nearest power plant, thus completely saying goodbye to the financing of the network.

This cost-saving path is not open to German industry: the network costs for private consumers would then explode.

After all, industry also makes a contribution to stabilizing the grid through its high, constant consumption of electricity.

“In the past, high investments have been made in trust in the continued existence of the network usage fees,” says ViK boss Seyfert.

They must not be devalued now.

“After all, the shutdowns of power plants are not the responsibility of the companies, but an exogenous shock from their point of view.

The problem will only worsen as the nuclear and coal phase-out continue.

Since nobody knows which power plant will be connected to the grid next, there is no longer any planning security for the industry, says Seyfert: "This is a fluctuating reason, so no company that relies on electricity supplies can plan seriously."

The industry representatives are therefore calling for a short-term “moratorium” to freeze the amount of network usage charges at the previous level until a solution is found.

This text is from WELT AM SONNTAG.

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Source: WORLD