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ENERGY

German government pledges to subsidise rising electricity bills

For most electricity customers in Germany, grid fees are set to rise next year. But the government plans to inject €13 billion to ease the burden on consumers.

Published: 6 October 2022 10:22 CEST
A few lights on in a Leipzig housing block. Electricity prices have been rising in Germany.
A few lights on in a Leipzig housing block. Electricity prices have been rising in Germany. Photo: picture alliance/dpa | Jan Woitas

The four major transmission system operators (TSOs) said the price of grid fees would be set at an average of 3.12 cents per kilowatt hour next year, slightly higher than the current average of 3.08 cents/kWh. For the first time, the cost will be at the same level across Germany.

Grid fees form part of the electricity bills paid by consumers, along with other taxes and production costs. The charges make up about 10 percent of private customer bills. 

Those who live in the area of the network operator Tennet, which supplies Lower Saxony, Schleswig-Holstein and parts of Hesse and Bavaria, can, however, expect a slight decrease in the network fee.

In the rest of the country, grid fees currently stand somewhere between 2.94 and 3.04 cents per kWh. The four TSOs – 50Hertz, Amprion, Transnet BW and Tennet – said the price increases were due to the higher costs needed for procuring energy, following Russia’s invasion of Ukraine. 

READ ALSO: Why electric fan heaters could make energy crisis worse

The cost for transmission networks has more than tripled from €5 billion to €18 billion.

To ensure that grid fees for customers do not also more than triple, the German government has pledged to give a subsidy of €13 billion.

“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,” said German Economic and Climate Minister Robert Habeck. “We will use almost €13 billion to keep costs down.”

He said this would be carried out in connection with the planned electricity price cap.

READ ALSO: Germany to spend €200 billion to cap soaring energy costs

The coalition government, made up of the Social Democrats, Greens and Free Democrats, is planning to dampen grid fees in the medium term by skimming off high windfall profits from electricity producers to fund a price cap. 

The money for the subsidy will also be covered by Germany’s Renewable Energy Act (EEG) funding. Electricity customers in Germany had to pay an EEG levy, aimed at boosting renewable energy, up until it was dropped earlier this year due to spiralling prices. 

The German Association of Energy and Water Industries (BDEW) called on the coalition to take action quickly and introduce subsidies.

“It is right that a state subsidy is planned for this exceptional situation,” said Kerstin Andreae of BDEW.

The significantly higher costs would otherwise lead to increased network fees that customers would have to pay, Andreae said. 

READ ALSO: German households see record hikes in heating costs 

Vocabulary 

Network fees/charges – (die) Netzentgelte

Electricity price – (der) Strompreis

Consumers – (die) Verbraucher

To increase/rise – steigen

We’re aiming to help our readers improve their German by translating vocabulary from some of our news stories. Did you find this article useful? Let us know.

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INHERITANCE

EXPLAINED: How to write a will in Germany

German succession law is pretty clear on what happens to your assets if you die without a will. But there are some big advantages - particularly for foreigners - of writing one.

Published: 26 April 2024 10:19 CEST
EXPLAINED: How to write a will in Germany

First and foremost, the largest advantage when it comes to writing wills as a foreigner in Germany – is the option to decide which country’s law applies when you write your will.

“Foreigners living in Germany have a huge advantage over German citizens, because you can choose the law of your own country for your will – even if you live in Germany,” says Andreas Moser, a Chemnitz-based immigration and family lawyer who runs a popular blog on German citizenship and family law. “Dual citizens who are German and have another nationality also have this advantage.”

READ ALSO: Everything you need to know about German inheritance law

Whether you want to do this of course, depends highly on the other country concerned and its law – and how much it differs from German law.

In specific detailed cases, you may want to consult a lawyer who specialises in wills and estates. One example of how German law may differ though is that many countries don’t have “forced heirship”, which requires you to leave certain shares of your estate to certain immediate family members.

By contrast, Germany has forced heirship. If, however, you would like to get around this for some reason, you can specify that your will should go under the other country’s law – if, for example, that country doesn’t have forced heirship.

This is unlikely, however, to result in people resident in Germany you leave assets to being able to get around inheritance tax, as this counts towards the receiver’s tax and not the deceased’s. However, there are other cases when using either country’s estate law might have different implications for certain assets – something a specialised lawyer can give you more information about.

If you want your other country’s rule to apply, make sure you specifically state that in your will.

EXPLAINED: The rules around inheritance tax in Germany

When should you definitely have a will?

Moser suggests that foreigners in Germany who want their native country’s law to apply write a will and specifically state that as their wish.

He also recommends wills in particular for those who have “patchwork” families, where one or both spouses have been married before or have children from previous marriages – in order to avoid complicated proceedings over who gets what.

A family sit at a lake.

Foreigners in Germany – even if they are dual German citizens – can choose the succession law they want to apply in their will. Image by Eva Mospanova from Pixabay

How should I write a will?

When it comes to composing a will, you have three main options:

The first is to write an international will that’s valid in your home country and that specifically states that you want the law of your home country to apply. 

The disadvantage of this approach is that your heirs may have to later pay to have it translated into German. You can also arrange to have an official German translation of it done.

Your second choice is to handwrite a will and sign it. This is known as a holograph will or Eigenhändiges Testament in German. It can be in any language, although again – your heirs may have to pay to have it translated later.

This option also avoids certain expensive legal fees – and you can state which country’s law you want to apply. However, for it to be valid, it must be entirely handwritten and include the date and place of signature. It cannot be typed and signed. If you’re concerned about the will going missing, you can deposit it with your responsible probate court for a fee of €75.

The final option is to write a public testament – which is prepared by a German notary. These wills are pretty ironclad but can be expensive – with fees that differ depending on the size of the estate. Once prepared, the notary will then file it with the public registry – so there is always a record of it.

READ ALSO: Do foreigners in Germany owe tax on money that is inherited from overseas?

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