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German Cabinet Approves €6.5 Billion Annual Grid Subsidy and Targeted Power-Tax Cut

The plan now moves to the Bundestag, where approval is needed before any region‑dependent savings reach bills.

Overview

  • From 2026, transmission operators will receive €6.5 billion per year from the Climate and Transformation Fund to lower network charges, with €26 billion earmarked through 2029.
  • The government will make permanent a reduced electricity tax for more than 600,000 producing firms and for agriculture and forestry, while rejecting a universal household tax cut.
  • Ministry estimates point to average household network-charge relief of roughly 2–2.4 cents per kWh, though Verivox calculates about 1.6 cents and effects will vary by grid area.
  • Suppliers are not legally required to pass the subsidy on to customers, and industry and consumer groups warn some regions may see little or no benefit.
  • Officials signal a possible shift in 2027 to subsidise the offshore-grid levy subject to EU approval, and network operators cite an October 10 deadline for legal changes to affect January 2026 tariffs.