Grid Package 2026: New framework for grid connections proposed

On 29 July 2026, the German Cabinet approved the so-called grid package (Netzpaket). The draft act to amend energy industry legislation to synchronise plant expansion with grid expansion and improve the grid connection procedure aims to ensure that the expansion of generation capacity is more closely synchronised with grid expansion in future. To this end, new regulations are planned concerning the prioritisation and reservation of grid connections, on redispatch, and the transparency and digitalisation of procedures. At the same time, however, the legislative bill shifts new costs and risks onto those seeking access to the grid. 

Grid package aims to speed up grid connections to support energy transition

As the energy transition progresses, the challenges facing the energy networks are also increasing. In addition to the electrification of heating, transport and industry, and the expansion of renewable energy, other market participants such as large-scale battery energy storage systems (BESS) and data centres are placing demands on additional connection and transmission capacity. This means that competition for grid connection capacity – which is already in short supply – is set to increase significantly. 

Under the current legal framework, the legal options available to network operators for dealing effectively with the large number of applications for grid connection are limited. The grid package aims to counteract this. Whether this will succeed has been the subject of intense debate in political circles and the industry for months.

Relaxations to the redispatch reservation: Right to compensation to remain in place

The most significant changes in the legislative bill compared to the ministerial bill from the consultation with the federal states and associations, as well as the internal draft versions from February and April 2026 that have come to light, relate to the so-called "redispatch reservation".

In the versions originally made public, it was envisaged that the unconditional obligation to connect to the grid under section 8 German Renewable Energy Sources Act (EEG) would not apply in so-called "capacity-limited grid areas". Instead, the network operator would be required to offer a contract under which the applicant waives all financial compensation for redispatch measures for the duration of the capacity restriction.

From a (European) legal perspective, there were considerable doubts as to the lawfulness of these financial restrictions. Pursuant to Article 6 of the Electricity Market Directive (EU) 2019/944, the system operator may only refuse access to the system where it lacks the necessary capacity. Article 13 (7) of the Regulation on the internal market for electricity (EU) 2019/943 stipulates in this case that plant operators are, in principle, entitled to financial compensation for the redispatch measure except in the case of producers that have accepted a connection agreement under which there is no guarantee of firm delivery of energy. The latter, however, would require the contract to have been entered into voluntarily, that is to say, it would require there to have been a choice and a freely made decision.

Perhaps against this backdrop, and in light of criticism from the industry, the right to compensation is to remain in place under the legislative bill. However, where a connection is sought in a capacity-limited grid area, the grid connection contract must include a waiver of compensation for up to 20 per cent of the total electricity generated by the installation in a given year. For onshore wind turbines in acceleration zones as defined in section 2 (1) German Wind Energy Area Requirements Act (WindBG), a slightly lower proportion of 18 per cent applies. Another new point is a one-time extension of the waiver by 18 months, unless the conditions cease to apply earlier or the grid operator is at fault for the grid expansion not having been completed (section 13a (6) draft German Energy Act ("EnWG-RegE"), section 8 (4) draft German Renewable Energy Sources Act ("EEG-RegE")). It seems highly doubtful whether this will dispel the concerns regarding the regulations under EU law. 

When defining a so-called "capacity-limited grid area", pursuant to section 14 (1d) EnWG-RegE, the decisive factor is that the active power generation of the installations connected directly or indirectly was reduced by 5 per cent in the preceding calendar year, in accordance with section 13a (1) German Energy Act (EnWG) (instead of the 3 per cent originally envisaged). The designation applies for six (instead of the originally envisaged ten) years and is now specific to solar energy installations and wind turbine generators (section 14 (1d), sentence 4, EnWG-RegE). A new point in the legislative bill is the obligation on the network operator to revoke the designation without undue delay if these conditions are no longer met, based on the average over three consecutive years (section 14 (1d), sentence 6, EnWG-RegE). 

New model for system-beneficial grid connection capacity for solar energy installations and wind turbine generators

The official ministerial bill for the grid package also introduced the concept of system-beneficial grid connection capacity. From 1 January 2027, the right to grid connection will no longer be subject to a facility's maximum generation capacity. Instead, for first-segment solar installations, the maximum active power feed-in will be limited to 70 per cent of the installed capacity, and for the connection of onshore wind turbines to 280 watts per square metre of the swept area of the rotor (section 8 (1), sentence 4 EEG-RegE). The limit will apply on a permanent basis, irrespective of any potential capacity constraints at the grid connection point.

Prioritisation of grid connections as a key control tool

A key element of the draft grid package remains the shift away from the previous "first come, first served" principle for connection applications. Instead, transmission system operators (TSOs) are to develop standardised, transparent and efficient procedures for prioritising grid connections. The four German TSOs have already taken steps ahead of the future entry into force of this prioritisation option, as provided for in the legislative bill, by introducing the so-called "maturity assessment procedure" (Reifegradverfahren) with effect from 1 April 2026. Section 17a EnWG-RegE is to establish the relevant legal basis for this. At the same time, the German Federal Network Agency is granted a right of approval and the power to make amendments, neither of which were previously provided for in the maturity assessment procedure.

In addition to the prioritisation criteria explicitly set out in previous bills:

• security and reliability of the electricity supply system, 
• statutory expansion targets, 
• approved scenario frameworks, 
• requirements of adjacent or downstream networks, 
• efficient use of interconnection points,
• designations in regional development or local development plans

the draft now allows

• the location-specific nature of applications for connection 

to be taken into account (section 17b (1) EnWG-RegE).

With the new prioritisation option, it will no longer be the date of the application that determines how quickly a project is implemented or whether capacity is reserved for other projects, but rather the grid-related and system-related quality of the project. For project developers and plant operators, reliable evidence regarding the project's progress, the system's performance and, where applicable, the project's integration into the planning framework is essential. At the same time, network operators face an increased risk of regulatory and legal disputes if the criteria, or the way they are applied, are not sufficiently transparent, non-discriminatory and objectively sound.

While the maturity assessment procedure is currently only applied at the transmission system level, distribution system operators (DSOs) will now also be able to prioritise projects (section 17b (2) EnWG-RegE). They are to adopt the prioritisation principles for their network area as confirmed by the Federal Network Agency and, in addition, be permitted to use the regional scenarios that have been drawn up, as well as the requirements of upstream networks, to differentiate when allocating connections. 

No priority for grid connection over energy storage systems

A special provision will apply to energy storage systems (section 17 (2a) EnWG-RegE): The priority for grid connection granted to renewable energy installations and combined heat and power (CHP) plants will not apply to them. Furthermore, grid connection for co-located energy storage systems must not be refused on the grounds of a lack of capacity if the previous maximum feed-in or withdrawal power does not increase. 

Flexible connection agreements aim to reduce grid congestion

It is already becoming apparent that a growing number of grid operators are turning to Flexible Connection Agreements (FCAs) to enable grid access despite limited capacity. In the event of demonstrable constraints on available grid capacity, section 17a (2) EnWG-RegE will authorise TSOs to make grid connections conditional upon the conclusion of an FCA, provided that the Federal Network Agency has approved the limitation of the withdrawal or injection capacity. This does not apply if the applicant for grid connection agrees to bear the relevant costs. To meet the growing need for harmonisation and standards with such agreements, it appears, in principle, to be a sensible step to extend the Federal Network Agency's regulatory powers to include flexible grid connection agreements under section 8a German Renewable Energy Sources Act (EEG)(section 17 (4) EnWG-RegE). However, it is also true that harmonisation only makes sense where the circumstances are comparable. The supply and withdrawal profiles of different types of plants vary greatly in practice. 

New guidelines on reservation and release of grid connection capacities 

Compared with the previous drafts, the provisions governing the reservation and release of grid connection capacity remain largely unchanged in terms of content.

When implementing projects, the reservation of grid connection capacity is a key component; however, there are no laws governing this to date. Section 17f EnWG-RegE will require DSOs to develop a standardised framework for the reservation and release of grid connection capacity for connections with a rated output of 135 kW or more. The reservations are to be made in defined time periods, linked to the progress of the project, and may be subject to a fee. As with prioritisation, the Federal Network Agency's approval is also required for the reservation policy. 

In addition, section 17 (1a) EnWG-RegE provides network operators with the option to adjust the capacity to be maintained if it has not been utilised, or has not been utilised at the agreed level, for more than five years and is not expected to be required at the agreed level on a long-term basis. The new regulations aim to enable network operators to remove speculative requests from the pipeline, eliminate connection bottlenecks and to increase the efficiency and utilisation of the existing infrastructure.

Grid connection procedure: Greater transparency, time limits and digitalisation 

The bill also contains a number of procedural requirements which are likely to simplify the site selection process, the preliminary assessment of projects and communication with grid operators for project developers. Grid operators will be required to show available grid connection capacity on grid maps and to update them monthly (section 17c (1) EnWG-RegE). In addition, from 2028, DSOs will be required to provide an electronic procedure for non-binding grid connection information for connections of 135 kW or more and fully digitise their communication processes (sections 17c (2) and 17e (2) EnWG-RegE). One new aspect is that the information must now include a non-binding estimate of the anticipated costs of the grid connection (section 17c (3) EnWG-RegE). 

In addition, clear information requirements will be introduced: Upon receipt of a grid connection application, status updates must, as a general rule, be provided within a shortened period of two months or be updated on an ongoing basis if a decision has not yet been reached within that period (section 17d (1) EnWG-RegE). Other general information must be made available on the relevant website of the network operator (section 17d (2) EnWG-RegE). 

Contribution towards network costs to be introduced for power generating plants

The revised version of section 17 EEG-RegE introduces a contribution towards network costs for power generating plants, which would, for the first time, shift part of the grid expansion costs onto power generating plants. The Federal Network Agency will be authorised to lay down guidelines on procedures or criteria for flat-rate charges or charges that differ by region based on grid-related parameters. When selecting a location, it would therefore be necessary to take into account that higher connection costs are likely to be incurred in grid-critical regions.

Grid package 2026: Implications for project development and financing

It remains to be seen whether the grid package will become law in its current form. Although the legislative bill has already addressed some of the points of criticism, the debate is still ongoing. It remains to be seen to what extent further changes will be made during the parliamentary process following the summer recess. The grid package is still under fire from various fronts. A key factor for its subsequent implementation will be, in particular, how the waiver of compensation in grid areas with limited capacity is actually structured, which existing and transitional arrangements protect projects already at an advanced stage, and how the prioritisation of projects is handled in practice. However, the following already applies: In future, anyone developing new projects will need to consider grid connection, site selection, flexibility options and financing structures in much closer conjunction with one another, and address potential future requirements at an early stage.