Germany’s federal regulator for the electricity grid, Bundesnetzagentur, just released a bombshell proposal. This new plan, adopted in early 2023, will reduce network costs for electricity customers by €1.5 billion (roughly $1.71 billion) between 2026 and 2028. This program’s intent is to really modernize the nation’s infrastructure. It will provide a critical and efficient path to transmit wind energy from the northern plains to the more energy-hungry southern states.
Under the plan as proposed, reimbursement for small, conventional power generation plants would be drastically reduced. These units are the basis for avoided network tariffs, which currently assist with offsetting network costs. These tariffs, totaling €1 billion per year, cover only 3% of Germany’s total network costs. Klaus Müller, the head of Bundesnetzagentur, emphasized the necessity of this reform, stating, “Subsidising power plants through so-called avoided network tariffs at the expense of consumers is no longer appropriate.”
Starting on January 1, 2026, Germany plans to reduce tariffs by 25% per year. Importantly, it implies that no additional compensation for feed-in distributed generation will be provided after 2029. Today’s payment system for distributed feed‐in is governed by section 18 of the Electricity Network Tariffs Ordinance (StromNEV). It narrowly focuses on traditional power plants connected to municipal grids and excludes renewable energy providers such as the ones from solar and wind energy.
To support its transition towards greener energy sources, Germany has initiated a project to connect the offshore wind power port of Emden with Meerbusch, located near Düsseldorf. This new transmission link should come online by the middle of 2027, which further demonstrates the country’s seriousness in improving its power transmission network.
Müller highlighted the importance of this transition in his remarks: “We are proposing to save consumers and companies a total of €1.5bn over three years.” The initiative demonstrates impressive cognizance of the steps Germany has taken in its ongoing renewable energy transition. It has finally gotten to a point where it does not need additional reinforcement at these local low-voltage levels.
The debate over Bundesnetzagentur’s proposal will go on through a consultation period that lasts until May 23. The groundwork for this project has been laid since 2018, underscoring Germany’s long-term commitment to modernizing its energy grid and promoting sustainable energy solutions.