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Exclusive-Germany to subsidise electric bills with 13 billion euro grid fee payment

The sun rises over power lines near highway A4 between Waltershausen and Erfurt

By Markus Wacket

FRANKFURT (Reuters) -Germany will subsidise power bills next year by paying just under 13 billion euros ($12.8 billion) towards the usage fees charged by the four high-voltage transmission grid companies (TSOs), economy minister Robert Habeck said on Wednesday.

The fees form part of electricity bills, accounting for around 10% of overall costs for retail customers and around a third for industrial companies in sectors such as steel or chemicals.

The intervention stabilises the fees, which otherwise would have risen threefold given runaway wholesale power prices and rising operational costs for the TSOs, Habeck said. [EL/DE]

"We are now making sure that these cost increases are absorbed, thereby preventing an additional burden for industrial companies, small and medium-sized businesses and consumers," he said. "We will use almost 13 billion euros to keep costs down."

Sources had earlier put the price tag at 12.7 billion euros.

The TSOs later issued a statement saying the unified fee would be set at 3.12 cents per kilowatt hour (kWh), only slightly higher than the average of 3.08 cents/kWh last year.

The TSOs' higher costs stem from interventions to manage grid flows and stabilise systems in Europe, where Germany is the biggest power market and transit country.

France has experienced technical problems at its nuclear reactor fleet while droughts have curbed river transportation of coal to power stations, tightened water supply at river-based plants and lowered run rates at hydroelectric plants.

There are also increasing fluctuations in the feed-in of wind and solar power, with the number of generation units expanding under a long-term roll-out of green energy, although Germany is also reactivating some conventional power plants as it responds to a drop in Russian fuel imports.

All these factors are causing more erratic than normal grid flows, which the TSOs - Amprion, 50Hertz, TransnetBW and Tennet - must balance at a time when costs of equipment and labour are rising.

Habeck said the subsidy would initially be funded by the surplus on an account under the renewable energy bill (EEG), which has been swelled by payments from the state budget and funds from CO2 pricing, and eventually covered by measures including an electricity price brake and an energy bailout package.

($1 = 1.0151 euros)

(Reporting by Markus Wacket, writing by Vera Eckert, editing by Kirsten Donovan)