The German government is planning to adjust incentives for renewable energy sources to better align with actual grid needs, potentially lowering electricity prices and stabilizing networks. A draft law from the Ministry of Economic Affairs, led by Katherina Reiche (CDU), proposes allowing grid operators to reject fresh connections from green energy providers in certain regions—unless those providers agree to forgo payment for electricity that cannot be used.
The draft also proposes that renewable energy producers contribute more to grid costs. Grid operators would be permitted to charge regionally differentiated “construction cost contributions” based on the “grid compatibility” of wind or solar parks.
According to the draft, which was reviewed by F.A.Z., the changes respond to a situation where providers have been connected to the grid and compensated even when their energy production exceeds demand and transmission capacity. This drives up network and electricity costs, jeopardizes system stability, and requires a complex “redispatch” process—where wind turbines, primarily in the north, are sometimes curtailed because their electricity cannot be transported. They still receive compensation for this curtailment, while reserve power plants in the south are sometimes needed to meet demand.
More “Grid-Neutral” Battery Storage
The proposal introduces a “redispatch reserve” and a special regulation for “capacity-limiting network areas”—sections of the grid where more than three percent of generated electricity could not be delivered last year due to transmission limitations. In these areas, grid operators will offer contracts where producers waive compensation for curtailment for up to ten years. Refusal could result in the grid operator overriding connection rights.
The draft also addresses the current practice of grid operators being required to consider connection requests for electrical storage even when no need exists or when projects are unlikely to be realized. This has disadvantaged other applicants, such as data centers and industrial businesses. The proposal would prioritize connection requests and allow unused connections to expire after three years.
The draft criticizes the fact that transmission system operators have already received storage requests totaling over 250 Gigawatts (GW), with distribution networks adding another 400 GW—despite the expectation that only a fraction of these projects will be viable. For comparison, Germany’s total installed electricity generation capacity is less than 300 GW. The draft does not reject storage outright, but aims to promote the construction of “grid-neutral” batteries in conjunction with renewable sources to optimize supply.
A Disservice to the Energy Transition?
The plans have been met with approval in the network sector. Stefan Kapferer, Managing Director of transmission system operator 50Hertz, stated that they welcome the Ministry’s initiative to reorganize grid connection procedures, as reported by F.A.Z. He emphasized the need for a new, efficient, and legally sound process to better prioritize connection requests.
Kapferer also stated We see sensible to rank applications based on their maturity and to hold capacity. He added that coupling the expansion of renewables more closely with grid expansion is crucial, and that continuing the current approach could be a “disservice to the Energiewende” (energy transition).
However, there is also criticism. Nina Scheer, energy policy spokesperson for the SPD parliamentary group, argued that the draft does not meet the coalition agreement’s provisions for utilizing the full potential of renewable energies. Katharina Dröge, leader of the Green Party faction, stated that Reiche intends to “stifle” the expansion of renewable energies.
Frequently Asked Questions
What is the purpose of the proposed changes?
The proposed changes aim to lower electricity prices and stabilize networks by better aligning renewable energy incentives with actual grid needs.
What is a “redispatch”?
A “redispatch” is a process where wind turbines, primarily in the north, are sometimes curtailed because their electricity cannot be transported, even though they receive compensation.
What is the current status of the proposal?
The 34-page draft, dated January 30th, is currently being referred to as the “Netzpaket” or “Netzanschlusspaket” and does not yet include details on costs or potential savings, which are “still under review.”
As these proposals move forward, will they successfully balance the need for renewable energy expansion with the practical realities of grid infrastructure?
