GERMANY Trends and Developments Contributed by: Udo Olgemoeller, Nicolaus Ascherfeld, Johann von Pachelbel and Janina Müller, A&O Shearman
mandate digital connection portals by 2028. Section 14a of the Energy Industry Act ( Energiewirtschaftsge- setz – EnWG) contains provisions that operationalise controllable consumption devices, giving network operators a strengthened legal basis to manage peak loads through regulated curtailment combined with tariff incentives. For DSO investors, the digitalisation mandate creates a capex cycle that must be reflected in regulatory revenue allowances. Outlook Germany’s power sector in 2026 is characterised by the simultaneous acceleration of renewable deploy- ment, the reconfiguration of network ownership, and far-reaching market design reform. The TSO owner- ship transactions of 2025–2026 demonstrate that private institutional capital and sovereign investors can coexist in financing critical grid infrastructure, but governance arrangements and regulatory return frameworks will determine sustainability at scale. At the distribution level, smaller municipal utilities must find paths to consolidation, platform solutions or inno- vative financing if they are to meet the demands of electrification and digitalisation.
The foreign investment environment is in flux. The OGE precedent signals rigorous scrutiny of critical infra- structure transactions, even as the government sig- nals its openness to broader commercial investment. Grid connection scarcity – particularly for data cen- tres – is transforming grid access into a strategic and potentially contested resource. Across all segments, the trend towards greater complexity underscores the importance of specialist legal and commercial advice. The AgNes and capacity market proceedings are all expected to produce outcomes during 2026 that will materially affect the risk-return profile of generation, storage and network assets across the German power sector.
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