GERMANY Law and Practice Contributed by: Udo Olgemoeller, Nicolaus Ascherfeld, Johann von Pachelbel and Janina Müller, A&O Shearman
1.5 Central Planning Authorities Central Authority
to manage peak loads through regulated curtailment combined with tariff incentives – a change that par- ticularly affects heat pumps, electric vehicle charging infrastructure, and potentially large data centres. Grid fee treatment for battery energy storage systems – the so-called AgNes ( Allgemeine Netzentgeltsystematik Strom ) procedure – remains under active review by the BNetzA, with a further proposal interim update having been provided on 27 May 2026 stating that BESS commissioned by 4 August 2029 are expected to remain exempt from grid fees for 20 years. How- ever, this exemption will only apply if a final invest- ment decision (FID) is taken before the new regulation enters into force (not expected before early 2027). A preliminary draft of the new regulation is scheduled to be published this summer. Capacity Market and Security of Supply Germany is discussing legislation for a central capac- ity market, with first delivery from November 2031. Auctions are planned for 2026 (approximately 9 GW of long-duration capacity) and 2027 (approximately 2 GW of new-build capacity), with further technology- neutral rounds in 2027 and 2029 encompassing stor- age and demand response. Contracts may run up to 15 years, structured as reliability options with windfall rent caps, availability obligations and stop-loss settle- ments. Entry criteria include hydrogen-readiness for gas-fired plants, inertia and system-stability require- ments for storage, firm grid access, and EEA sup- ply chain resilience for long-term awards. The rel- evant legislation (the Electricity Supply Security and Capacity Act, or Strom - Versorgungssicherheits - und - Kapazitätengesetz – StromVKG), was passed by both the German Parliament and the Federal Council in early July 2026. Hydrogen Network and Decarbonisation Instruments The regulatory framework for a hydrogen core network has been advanced, including associated financing and tariff principles, creating a pathway for integra- tion with the electricity sector. At the federal level, 15-year carbon contracts for difference (CCfDs) have been introduced to provide long-term cash-flow sta- bility for low-carbon industrial investments, compen- sating capital and operating cost differentials and hedging against energy price volatility and EU ETS
The BNetzA oversees electricity supply, transmission and distribution development. It ensures system relia- bility and supply adequacy, and co-ordinates genera- tion and transmission planning (in close collaboration with the TSOs). Decisions from the BNetzA are subject to judicial review. Functions and Powers The agency regulates network access, approves investment plans, monitors supply adequacy, and enforces compliance with national and EU require- ments. However, the permits required to build and operate specific infrastructure are issued by local or regional authorities; they do not fall within the BNet- zA’s remit. 1.6 Recent Changes in Law or Regulation Renewable Energy and Auction Reform The EEG has been further amended to raise renew- able deployment targets, recalibrate auction design to improve realisation rates, and introduce stronger regional steering mechanisms. The so-called Solarpa- ket I simplified permitting and expanded support for rooftop photovoltaics. For onshore wind, accelerated permitting measures building on the 2023 Wind - an - Land - Gesetz and related changes to spatial planning targets have led to a notable increase in permits. New assets no longer receive remuneration during periods of negative wholesale prices, and the sliding premium has been aligned to technology-specific annual mar- ket values. Grid Expansion and Connection The EnWG has been amended in a number of mate- rial respects. The grid connection procedure in the Netzpaket reforms will introduce capacity reservation mechanisms and flexible connection arrangements in constrained areas, and will mandate digital connec- tion portals by 2028, together with public capacity maps. The updated Federal Requirements Plan ( Bun- desbedarfsplan ) locks in the grid development plan for 2023–2037/2045, encompassing major AC, HVDC and interconnector build-out. New provisions under Section 14a of the EnWG operationalise controllable consumption devices and demand-side flexibility, giving network operators a strengthened legal basis
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