Status of the NEST process at the end of 2024/beginning of 2025
In February 2024 the Bundesnetzagentur launched the “NEST” process with the aim of redesigning the regulatory framework in light of the judgment of the Court of Justice of the European Union.
At the beginning of 2025 the Bundesnetzagentur is reporting on the status of the proceedings relating to the most important issues with a view to increasing the transparency of these proceedings. The individual proceedings are all at different stages, with discussions still ongoing in all cases.
The Bundesnetzagentur is publishing a range of documents reflecting the current status of discussions; one of the aims is to give sector stakeholders and consumers an idea as best as possible and as early as possible of the key future economic framework conditions based on the present status of the ongoing proceedings.
The Bundesnetzagentur is now reporting on the following proceedings and work processes:
RAMEN
The RAMEN determination proceedings [GBK-24-01-3#3] are at a relatively advanced stage. The Bundesnetzagentur is publishing the draft operative part of the determination together with the accompanying considerations. The planned determination essentially describes the future incentive system, sets the length of the regulatory period, introduces key regulatory tools (such as efficiency benchmarking, the productivity factor, an instrument to reflect changes in operating costs in the fifth regulatory period), standardises the calculation of the cost of capital and defines a list of cost categories.
The Bundesnetzagentur is giving sector stakeholders the opportunity to comment on the draft operative part and considerations until 28 February 2025. This is not a formal consultation. A formal consultation process will be held on the final draft determinations at a later stage. The responses submitted will be published. If your response contains trade and business secrets, please mark your response accordingly and submit an additional version with the confidential information blacked out. Please use the form below and add the name of your company/organisation to the file name when your save the file. Please send your response to gbk@bnetza.de in an email marked “GBK-24-01-3#3; name of your company/organisation”.
Form for responses relating to RAMEN
The responses to the current draft will be collected under the present reference (GBK-24-01-3#3). As it is expected that the final rules for the electricity and gas sectors will differ considerably, the Grand Ruling Chamber for Energy has decided to issue two separate determinations on incentive regulation for the two sectors and has allocated two different references to the separate proceedings: GBK-25-01-1#1 for the electricity sector and GBK-25-01-2#1 for the gas sector. The two separate proceedings will be formally opened at the latest when the draft determinations are published for consultation..
20250116 RAMEN Operative part and considerations - in german only
The issues regulated in the RAMEN determination are closely related to those covered in the proceedings for the determination of the base levels for electricity and gas operators.
Base levels for electricity and gas
The determination proceedings for the base levels for electricity and gas [GBK-24-02-1#3 and GBK-24-02-2#3] are also at a relatively advanced stage. The Bundesnetzagentur is therefore also publishing draft operative parts of these two determinations together with the accompanying considerations. The two operative parts are being published side-by-side in one document for the purpose of the consultation. However, it is still planned to issue two separate determinations.
The planned determinations essentially comprise provisions on setting the base level used in calculating the revenue caps. The most important issues include changing the capital maintenance concept to purely general price level accounting as well as rules for setting a reference basis for the weighted average cost of capital (WACC) rate, for calculating trade tax and for a standardised approach to determining current assets.
The Bundesnetzagentur is giving stakeholders the opportunity to comment on the draft operative parts and considerations until 28 February 2025. This is not a formal consultation. A formal consultation process will be held for the final draft determinations at a later stage. The responses submitted will be published. If your response contains trade and business secrets, please mark your response accordingly and submit an additional version with the confidential information blacked out. Please use the form below and add the name of your company/organisation to the file name when your save the file. Please send your response to gbk@bnetza.de in an email marked “GBK-24-02-1#3/GBK-24-02-2#3; name of your company/organisation”.
Form for responses relating to electricity and gas base levels
The draft operative part is provisional as regards the question of how construction cost contributions will be taken into account in the calculation of the interest basis in that a submission from the German Association of Energy and Water Industries (BDEW) of 13 December 2024 - in german only had not yet been assessed and a further expert dialogue is planned on this issue.
20250116 Electricity and gas base levels Operative parts and considerations - in german only
Return on capital
The Bundesnetzagentur is publishing a report it commissioned on the return on capital employed, for which proceedings have now also been opened [GBK-25-02-3#1]. The report provides the scientific basis for laying down methodologies for calculating the input parameters for the weighted average cost of capital (WACC) rate, including the cost of equity, cost of debt and gearing ratio.
Report by Frontier Randl Zechner - in german only
The Bundesnetzagentur has drawn up a paper summarising and assessing the main findings of the report. The paper does not pre-empt any determinations to be made and is not to be seen as an advance consultation. The aim is instead to give sector stakeholders and consumers an idea of the current status of discussions.
Preliminary assessment of the report - in german only
The Bundesnetzagentur is giving sector stakeholders the opportunity to comment on the report produced by Frontier Economics and on the Bundesnetzagentur’s preliminary assessment until 28 February 2025. This is not a formal consultation. A formal consultation process will be held for the final draft determination at a later stage. There will also be an opportunity to comment on the report during the consultation process for the methodology determination. The responses submitted will be published. If your response contains trade and business secrets, please mark your response accordingly and submit an additional version with the confidential information blacked out. There is no specific form to be used for responses.
Please add the name of your company/organisation to your file name and send your response to gbk@bnetza.de in an email marked “GBK-25-02-3#1; name of your company/organisation”.
A further expert dialogue is planned to discuss questions addressed in the report and the preliminary assessment.
Efficiency benchmarking
The Bundesnetzagentur has drawn up a paper summarising the status at the end of 2024 of the discussions relating to the methodology determination for efficiency benchmarking [GBK-24-02-3#5].
The paper presents the Bundesnetzagentur’s preliminary assessment of the key questions put to the network operators ahead of the expert dialogue held on 15 November 2024.
20250116 Efficiency benchmarking – current status - in german only
This paper is also not to be seen as a determination or consultation document. The aim is instead to give sector stakeholders and consumers an idea of the current status of discussions.
A further expert dialogue is planned for the first quarter of 2025 to enable an in-depth discussion on how to deal with the (potentially) increasing degree of heterogeneity among operators’ supply tasks and on how to consider forward-looking network expansion. The views presented in the paper in particular on these points are therefore to be seen as provisional.
Current status of other Grand Ruling Chamber proceedings:
Quality regulation
The Bundesnetzagentur published an initial key elements paper for consultation in October 2024 for the determination on quality regulation and the methods for incentive mechanisms for quality of supply in energy supply networks [GBK-24-02-1#4]. The paper presents the status of the work and discussions, which is also being supported by a commissioned report. A more in-depth dialogue with sector representatives is planned for January 2025.
A draft determination will be published at the end of 2025 based on the responses received to the paper and the findings from the expert discussions, including the dialogue held on 29 October 2024. The next step will be to collect data to be integrated as efficiently as possible into the 2025 monitoring process.
The Bundesnetzagentur still aims to carry out a multi-stage process as presented in the key elements paper and industry workshop. The first stage would comprise collecting suitable data; the second stage would involve deriving indicators and publishing the values determined for the individual network operators from the indicators; and the third stage would be to examine and, if necessary, develop a methodology for designing a monetary incentive tool using the indicators.
General sectoral productivity factor
The Bundesnetzagentur published a key elements paper in the third quarter of 2024 for the determination proceedings on the general sectoral productivity factor [GBK-24-02-3#4]. A draft determination is currently being drawn up on the basis of the responses to the key elements paper and the findings from the expert dialogue held on 2 September 2024; the draft is expected to be published for consultation at the beginning of the second quarter of 2025.
The Bundesnetzagentur has put out a tender for a report to support these proceedings; the commissioning process is still ongoing.