GERMANY Law and Practice Contributed by: Udo Olgemoeller, Nicolaus Ascherfeld, Johann von Pachelbel and Janina Müller, A&O Shearman
carbon price fluctuations. In addition, an EU-approved industrial electricity price scheme (2026–2028) targets energy- and trade-intensive sectors, offering effective relief towards EUR 50/MWh on 50% of eligible con- sumption, conditional on reinvestment in decarboni- sation and flexibility measures. Heat Planning and Energy Efficiency Amendments to the heat planning legislation require municipalities with fewer than 15,000 residents to pre- pare “small heat plans”, and oblige new heat networks to meet a 65% renewable or waste-heat share, with existing networks required to reach 50% by 2030 and full decarbonisation by 2044. Germany’s transposi- tion of the EU Energy Efficiency Directive embeds an “efficiency first” principle in policy-making and major corporate investment decisions, with enhanced obli- gations relating to energy management systems, waste-heat reporting and data centre energy perfor- mance. EU-Level Reforms Reforms to the EU electricity market design and to the EU Regulation on wholesale Energy Market Integrity and Transparency (REMIT) require German transpo- sition and regulatory adaptation, including enhance- ments to market abuse surveillance and the introduc- tion of long-term hedging instruments, such as power purchase agreements and two-way contracts for dif- ference within the framework of state aid control. Urban Planning Amendments to the Federal Building Code ( Baug- esetzbuch – BauGB) now privilege battery storage near substations and underground hydrogen storage in planning decisions, enabling faster and lower-risk site selection and permitting for grid-adjacent infra- structure. 1.7 Announcements Regarding New Policies Grid Connection Allocation Reform (TSO Maturity- Based Procedure) As of 1 April 2026, Germany’s TSOs have replaced the longstanding “first come, first served” principle for transmission-level grid connections with a maturity- based allocation procedure ( Reifegradverfahren ). The shift responds to the growing imbalance between grid connection demand and available capacity: at trans-
mission level, virtually all technically available connec- tion points are already reserved for the coming five years. Under the new regime, grid connection requests for battery energy storage systems, energy consumers and mixed facilities are processed in periodic allo- cation cycles. Applications must meet defined mini- mum requirements and be accompanied by an appli- cation fee of EUR50,000 and a realisation deposit of EUR1,500/MW. Projects are then evaluated and pri- oritised on the basis of a maturity assessment encom- passing land and permitting status, technical concept, the applicant’s capability to realise the project, and grid and system benefits. Where available capacity is insufficient, only the high- est-scoring projects are awarded. Project progress is subsequently monitored against agreed milestones, with capacity reservations lapsing in the event of non- achievement of these milestones. The TSOs have published grid maps indicating connection capacities available in the first allocation cycle, and applications for this cycle were due to be submitted by 30 June 2026. Reform of Electricity Grid Fees (AgNes Procedure) The BNetzA is conducting a fundamental reform of the electricity grid fee framework in the AgNes ( Allgemeine Netzentgeltsystematik Strom ) procedure, which com- menced on 12 May 2025 and is expected to conclude by the end of 2026. The reform was triggered by the scheduled expiry of the Electricity Network Charges Ordinance ( Stromnetzentgeltverordnung – StromNEV) on 31 December 2028 and aims, in particular, to pro- mote flexibility and grid-friendly behaviour. Key elements under consideration include the intro- duction of grid fees for electricity generators (ie, for feeding electricity into the grid) and for battery energy storage systems, and the introduction of multiple tariff components comprising capacity charges, volumetric charges and dynamic network charges. The outcome of this procedure will have material implications for the investment cases of storage assets, renewable generators and large flexible loads.
107 CHAMBERS.COM
Powered by FlippingBook