EEG 2027: Electricity from renewable energy plants is to be secured in the future through Contracts for Difference and marketed within competitive structures

The EEG 2027 introduces the new support mechanism for renewable energy plants required under European law. In the future, Contracts for Difference (CfDs) will protect plant operators when electricity prices are low; at the same time, a portion of the additional market revenues will be returned via the refinancing contribution. This will align support more closely with cost efficiency and market integration. For plant operators, this means less risk with limited revenue potential. In addition to the refinancing contribution, the de facto obligation to engage in direct marketing—which the Ministry is aiming to establish—also contributes to the goal of market integration for renewables. In this context, it is essential to ensure that the technical and regulatory conditions necessary for direct marketing on a large scale are established in a timely manner.

From the industry’s perspective, it is precisely this market-driven integration that must now take place to enable system-supporting signals for the operation of renewable energy plants. Grid-supporting operation of renewable energy plants is central to a cost-efficient overall system, which we urgently need against the backdrop of rising grid expansion and electricity costs. Incentivizing co-location—that is, the construction of storage facilities directly adjacent to generation plants—is also essential for a sustainable electricity system. The EEG 2027 provides for capping feed-in peaks from smaller solar plants, thereby making storage economically more attractive.

Grid Package: Grid connections should be distributed more equitably, and the expansion of renewable energy should be more closely aligned with criteria that serve the system

The German Grid Package addresses one of the key bottlenecks of the energy transition: the increasingly scarce and overloaded grid connections. Currently, the “redispatch reservation” remains controversial; under this provision, grid operators would be allowed to designate overloaded grid areas as capacity-limited for up to 10 years; in such cases, no compensation payments would be made to plant operators for the hours during which their plants are curtailed (due to grid congestion). This is intended to align the expansion of renewable energy more closely with grid requirements and thereby limit redispatch costs. From the industry’s perspective, the goal of the redispatch provision—the expansion of new renewable energy facilities in a manner that serves the system—is welcome in the interest of a cost-efficient electricity system. At the same time, the instrument used to achieve this must not lead to an unintended slowdown in the expansion of renewable energy. An adjustment to the redispatch clause is therefore currently being discussed between policymakers and the energy industry.

Less controversial is the transparent and efficient allocation of grid connections, which the Grid Package is intended to facilitate. The “first-come, first-served” principle currently in effect is to be replaced by a procedure developed by the transmission system operators. From the industry’s perspective, a new procedure that prioritizes connection requests based on their level of readiness is long overdue. Now, political guidelines are also needed to ensure transparent and efficient prioritization of grid connections. From the industry’s perspective, greater emphasis should be placed on where grid connection capacities directly enable industrial transformation, decarbonization, and value creation.

It is now crucial to carefully coordinate both reforms. The EEG 2027 and the Grid Package can make an important contribution to a more cost-efficient electricity system. For industry, it is crucial that the reforms reduce system costs without hindering the expansion of renewable energy or industrial transformation projects.