Reduction in gas-related charges
Year of issue 2023
Date of issue 2023.09.29
The balancing neutrality charges will be cut to zero euros per megawatt hour (€/MWh) with effect from 1 October 2023. This will lead to reductions in the price of gas for suppliers serving household and industrial customers. The new charges will apply for the next twelve months.
Klaus Müller, Bundesnetzagentur President, said: "This is good news for gas customers in Germany. The reduction in the charges means lower costs for suppliers, which we ultimately expect to be passed on to consumers"
Change due to cuts in consumption over the last year
The market area manager, Trading Hub Europe (THE), levies balancing neutrality charges to cover the expected shortfall from the gas balancing regime, which serves to guarantee the stability of the German gas network; the charges are levied on the balance responsible parties. The balance responsible parties are generally gas suppliers in the market area and can themselves pass on the charges to their final customers. The balancing neutrality charges are payable for gas delivered to standard load profile (SLP) customers (household customers) and to interval-metered (RLM) customers (industrial customers).
On account of the uncertain supply situation and the volatile gas market as a result of the war in Ukraine, the SLP charge last gas year was €5.70/MWh, while the RLM charge was €3.90.
In the course of the last gas year, THE generated considerably more revenue than projected, in particular through the sale of balancing gas, which was possible not least because of the large cuts in consumption made by household and industrial customers. According to THE's forecasts for the gas year 2023/2024, the resulting liquidity of the balancing neutrality accounts means that the charges can be reduced to €0/MWh for the next twelve months.
Overall burden of gas charges lower
In light of the security of gas supply, the federal government had set specific minimum storage level requirements for gas storage facilities and deadlines for the facilities to meet these requirements. A gas storage neutrality charge was introduced in October 2022 to cover the costs associated with the new requirements. This charge is also levied on the balance responsible parties.
The gas storage neutrality charge will remain at €1.45/MWh. However, there will be a considerable reduction in the overall charges payable by balance responsible parties as a result of the reduction in the balancing neutrality charges.Up until now, balance responsible parties serving customers in Germany had to pay an additional €5.70/MWh for gas delivered to household customers and an additional €3.90/MWh for gas delivered to industrial customers.
Background
The task of the market area manager, THE, is to guarantee safe and efficient network operation. Gas is bought or sold as balancing gas for this task. This guarantees the stability of the whole gas network.
The market area manager is required to manage two separate balancing neutrality accounts, one for SLP exit points and one for RLM exit points, to record its costs and revenues.
Balancing neutrality charges are levied when necessary to cover an expected shortfall from the balancing system. The level of the charges is based on factors including the forecast demand for balancing gas and the resulting costs and revenues.