Germany boosts the independence of its electricity grid regulator

Following a 2021 judgement by the EU’s court of justice, Germany has boosted the independence of its federal grid agency, the Bundesnetzagentur, a move heavily criticised by the opposition.

The 2021 ruling from the EU’s top court said the country’s energy network regulator was not sufficiently independent from the government. 

Until now, the agency – which is also in charge of regulating gas and telecoms infrastructure – was unable to independently determine grid fees charged by electricity grid operators to recoup their investment. 

“The European Court of Justice has long since ruled that this issue does not lie with the German Parliament, but at the European level,” explained Ingrid Nestle, the Greens’ energy expert.

The proposal to boost the regulators’ powers, contained in an amendment to Germany’s energy act, was adopted thanks to the backing of parliamentarians from the German government coalition, despite opposition from the conservatives. Germany’s federal states, the Länders, will debate the proposal in December but their assent is not required to pass the law.

The proposed amendment deletes two paragraphs that subjected the regulator to orders from the government, in line with the EU court ruling. This means Germany will finally be able to change electricity network access fees, Nestle explained on 10 November ahead of the parliament vote.

As a consequence, the regulator is becoming a much more influential body. Its president, Klaus Müller, told Handelsblatt that they would “have to work out many regulations themselves in future”.

With more than 800 electricity distributors (DSOs), Germany sees stark variations in local grid fees, with consumers in the North charged extra for grid access even though they contribute heavily to renewable electricity production from wind power.

“This topic is a high priority for us,” Müller noted, promising a proposal within the year.

Renewables are likely to be given special consideration. “We are putting up for discussion the idea that grid operators who are expanding their grids, especially for renewables, should be relieved,” Müller explained. 

A new super-regulator?

Opposition parties, meanwhile, expressed worries that the new law will create some kind of super-regulator with disproportionate powers. 

“With this law, the German government is turning the Federal Network Agency into a new super authority and failing to create an appropriate system of checks and balances,” warned Mark Helfrich on behalf of the centre-right CDU party. 

The government even “prevented the introduction of a scientific advisory board that would have ensured modern scientific standards in grid regulation,” he added, saying: “trust is good, control is better”.

Müller sought to allay those fears, saying he didn’t want “overemphasise” the agency’s newly found autonomy. “It has its limits,” he said, with courts particularly likely to be much more rigorous in their scrutiny given the regulator’s increased independence.

[Edited by Zoran Radosavljevic and Frédéric Simon]

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