German regulator proposes lower revenues for electricity and gas networks
FRANKFURT, July 14 (Reuters) – Germany’s federal network agency on Wednesday released a draft equity interest rate proposal for gas and electricity networks showing operators risk seeing their revenues cut during the five-year periods starting in 2023 and 2024, respectively.
The authority has proposed an authorized return for new infrastructure of 4.59% before corporation tax, compared to 6.91% currently, in regulated sectors, where costs are recovered by fees collected on the prices of end customers. .
The old infrastructures would gain 3.03% against 5.12% currently, he said in a press release.
Decisions in this area will be taken in the fall when operators have had the opportunity to present their case.
The outcome of the process will impact the speed of the expansion of renewable energy and the reuse of gas pipelines for low-carbon uses, such as transporting hydrogen to be produced from renewable sources.
Operator lobbies have said they will demonstrate the need to factor in the higher spending needed to upgrade grids for new roles in carbon-free energy systems.
Bundesnetzagentur President Jochen Homann said his agency, which reports to the Ministry of the Economy, was aware of the need to protect operators’ incomes but also obliged to reduce the impact on consumer prices.
“We want investments in networks to remain attractive at all times,” he said.
The lower proposed rates reflected valuations of significantly lower interest rates in the capital markets now and in the future, while assigning appropriate risk premiums.
“When determining the final tariffs, we will take into account the proposals resulting from the consultation process,” said Homann.
Reporting by Vera Eckert, editing by Kirsti Knolle and Douglas Busvine
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