Bun­desnet­za­gen­tur pro­pos­es to low­er costs for electricity grid

Year of issue 2025
Date of issue 2025.04.23

The Bundesnetzagentur has today put out for consultation its draft determination on the current remuneration for distributed feed-in, known as avoided network tariffs. It plans to phase out the remuneration for decentralised installations, reducing costs for the electricity grid.

"We are proposing to save consumers and companies a total of €1.5bn over three years," said Klaus Müller, President of the Bundesnetzagentur. "Subsidising power plants through so-called avoided network tariffs at the expense of consumers is no longer appropriate."

Draft determination

The Bundesnetzagentur is planning to gradually phase out the payment of tariffs for distributed feed-in. The tariffs are to be reduced by 25% a year starting on 1 January 2026. No more tariffs for distributed feed-in will be paid out as of 2029. Network users will save a total of €1.5bn between 2026 and 2028.

Rather than doing away with the tariffs immediately, the Bundesnetzagentur has chosen to take a gradual approach in order to give operators of decentralised installations enough time to plan ahead.

Background to avoided network tariffs

The remuneration for distributed feed-in pursuant to section 18 of the Electricity Network Tariffs Ordinance (StromNEV) is a payment that network operators make to, among others, conventional generating installations connected to distribution systems. Solar and wind power are not covered by the rules. These avoided network tariffs are borne by electricity consumers as part of their general network tariffs, amounting to costs of around €1bn a year. Avoided network tariffs make up an average of about 3% of German network costs.

Remuneration for distributed generation was introduced over 25 years ago in the expectation that locally generated electricity would be consumed locally and thus reduce overall network costs because the overarching grid would not have to be used, but this assumption is becoming less and less accurate. Decentrally generated electricity is also increasingly transported over longer distances to consumption centres. In addition, downstream networks also have to be expanded in such a way that a region can be supplied from the upstream networks, for example when distributed generating installations are not available.

The existing regulation on avoided network tariffs expires on 31 December 2028 due to the revocation of the StromNEV. The Bundesnetzagentur will provide installation operators with planning certainty in the determination by indicating to them in good time that the regulation will not be extended and a predictable phase-out plan will be put in place.

Next steps

The draft determination is available at the following link: www.bundesnetzagentur.de/1057122. Consultation responses to the draft may be submitted until 23 May 2025.