Germany is set to reduce electricity transmission charges by more than half next year, aiming to ease the strain of high power costs on both households and industries.

Transmission operators 50Hertz, Amprion, TenneT, and TransnetBW announced that grid fees are projected to drop from 6.65 cents per kilowatt hour (kWh) to 2.86 cents/kWh in 2026. The sharp 57% cut will be made possible through €6.5 billion ($7.6 billion) in government subsidies drawn from the national climate fund.

The plan still needs parliamentary approval by December 5. If confirmed, it would represent one of the steepest single-year reductions in transmission fees Germany has seen.

Electricity costs in the country remain among the highest in Europe, burdened by taxes, levies, and grid expenses. According to the German Association of Energy and Water Industries (BDEW), private consumers currently pay an average of 40 cents per kWh—about 20% more than before the energy crisis triggered by Russia’s invasion of Ukraine.

Energy-intensive industries, from chemicals to manufacturing, have long warned that elevated prices threaten competitiveness and investment. The government hopes that cutting grid fees and lowering electricity taxes—plans currently under consideration—will ease pressure on businesses and the wider economy.

Chancellor Friedrich Merz’s coalition has also pledged to reduce electricity taxes for industrial and agricultural users to the minimum allowed under EU law. Together, these measures are intended to soften the impact of high energy costs while keeping Germany on track with its climate and energy transition goals.

($1 = €0.8509)