New amendment to the Energy Industry Act (EnWG) introduced in July and August 2025

Briefing

The new amendment to the Energy Industry Act (EnWG) is intended to respond to European and national changes in energy policy. It combines climate protection, security of supply and economic competitiveness. The reasons for this are new EU requirements and the experiences from the energy crisis resulting from the war in Ukraine. The aim is to support the restructuring of the energy infrastructure towards greenhouse gas neutrality by 2045. Through the amendment, it is intended to create the legal basis for new measures relating to renewable energies, the expansion of networks and storage and energy sharing.

In the following article, we will focus exclusively on the amendment to the Energy Industry Act. Other legislative changes within the scope of the amendment will not be considered.

Status of proceedings

A comprehensive amendment to the EnWG and other energy law provisions was already initiated by the then governing traffic light coalition at the end of last year. However, the draft bill, which was over 400 pages long, only made it to the finishing line in a very slimmed-down version referred to as the Solar Peak Act. Several important issues fell by the wayside. With a “new” government draft dated 15 August 2025 (BR-Drs. 383/25), the Federal Ministry for Economic Affairs and Energy (BMWE) now wants to address at least some of the outstanding issues whilst politicians and associations are pushing for prompt implementation.

New regulations for battery storage

The amendment to the law provides for an extension of Section 11c of the Energy Industry Act (EnWG). This already stipulated that the construction and operation of energy storage facilities are in the overriding public interest and serve public health and safety. Based on Section 2, sentence 2 of the Renewable Energy Act (EEG), the following sentence is now to be added: “As long as the electricity supply in Germany is not almost greenhouse-neutral, the accelerated expansion of energy storage facilities should be included as a priority concern in the respective weighing of protected interests.” This sentence, which may seem insignificant at first glance, means that the facilities concerned will generally be given priority in the respective weighing of protected interests until net greenhouse gas neutrality is achieved in 2045. This is likely to be particularly relevant for the approval of battery storage facilities in outdoor areas. Now that numerous local authorities and, in some cases, state ministries have spoken out against (blanket) privileges for battery storage facilities under Section 35(1)(3) of the Federal Building Code (BauGB), the amendment to the law could provide new impetus for approval under Section 35(2) of the BauGB.

However, the draft law falls short of the industry’s expectations, as the critical issue of grid connection is not addressed in this amendment to the EnWG. The draft law proposed by the traffic light coalition still provided for specific deadlines and procedures for the grid connection process in Section 17 EnWG, thereby aligning the process with Section 8 EEG or the Ordinance Regulating Power Station Grid Connection (KraftNAV). The amendment also fails to address the issue of construction cost subsidies, which was ruled against by the Federal Court of Justice (BGH) for storage facilities.

New regulations for energy suppliers:

The introduction of the new Section 5 (4a) EnWG obliges electricity suppliers to develop and adhere to appropriate hedging strategies to limit the risk of changes in the energy supply at wholesale level for the economic viability of their contracts with customers, while maintaining liquidity in short-term markets and the price signals emanating from these markets (sentence 1). They must take appropriate measures to limit the risk of failure to supply their own customers (sentence 2). This implements a European requirement (Article 18a Electricity Market Directive) that was created in response to the energy crisis and the many discount store bankruptcies. Ultimately, the new regulations impose a certain obligation to hedge energy volumes in good time via the futures markets.

The Federal Network Agency (BNetzA) is responsible for monitoring compliance with these requirements. To this end, it may request the submission of the strategies referred to in sentence 1 at any time. If these do not meet the requirements set out in sentence 1 and are therefore not suitable for achieving the objectives specified therein, the BNetzA may demand that both the strategy and the corresponding measures referred to in sentence 2 be adjusted. At present, however, it remains unclear whether the BNetzA carries out such checks and whether it sets specific or very flexible minimum requirements for risk management – similar to the Federal Financial Supervisory Authority (BaFin) for the financial sector.

It therefore remains unclear exactly what the strategy to be developed by energy suppliers should look like and which strategies the BNetzA considers appropriate or inappropriate in this context. For many energy suppliers, this is likely to involve a significant interference in their business decisions on energy procurement, meaning that, considering the new Section 5(4a) EnWG, energy suppliers should critically review and question their procurement strategy and risk measures to avoid having to provide explanations to the BNetzA.

In addition to Section 5 (4a) EnWG, the amendment provides for changes to Section 41 EnWG. According to this, in addition to the obligation to introduce dynamic tariffs, which has been in place for all energy suppliers since 1 January 2025, an obligation to maintain fixed-price contracts will also be introduced if the energy supplier has more than 200,000 customers. In this context, the information requirements regarding such tariffs and the sending of corresponding contract summaries will be tightened, which is likely to lead to additional administrative work for suppliers. On the other hand, new regulations are to be welcomed, according to which price adjustment letters will no longer be required in the event of an increase in sovereign charges if the energy supplier includes corresponding provisions in its contract. This should make things much easier, so energy suppliers should review their terms and conditions accordingly.

Further protection for end consumers

Furthermore, there are additions (Sections 40 et seq. EnWG) that further expand the existing protection for end consumers. These include specifying requirements in the event of consumption estimates (Section 40a (2) EnWG, new version), expanding the options for end consumers to contact their supplier (Section 41 (1) sentence 2 no. 1 EnWG, new version), termination options (Section 41(1) sentence 2 no. 5 EnWG, new version) and collective agreements, and precise regulations in favour of the consumer in the event of a supply interruption (Sections 41 f and g EnWG, new version).

Energy suppliers are therefore called upon to critically compare the new regulations with their existing terms and conditions and billing forms and, where necessary, to implement the corresponding new regulations.

The amendment aims to create the legal basis for the shared use of electricity from renewable energy sources (known as energy sharing) by introducing Section 42c EnWG. Initially, the shared use of electricity from renewable energy sources would only be possible within a single grid area, but in the future, it should also be possible to extend this to other grid areas. In this regard, the Federal Network Agency is to create both the technical and organisational framework conditions. However, the new regulations remain limited to the scope of application of private individuals or private user communities, although a corresponding sharing concept is also considered sensible in the commercial sector.

The issue of customer installations remains unaddressed

Although the amendment to the EnWG is broadly formulated, it does not include any new provisions about customer installations. In its ruling of 13 May 2025, the Federal Court of Justice followed the call of the European Court of Justice and largely undermined the concept of customer installations, ruling that a customer installation would only be possible if there was no distribution network according to European guidelines (see TW Insight of 25 May 2025). In view of the CJEU’s extremely broad definition of the term “distribution network”, this is currently leading to unacceptable legal uncertainties in practice. The boundary between a regulated distribution network and an unregulated network/ customer installation remains largely unclear, even though the consequences of regulation are significant. Many operators would not be in a position to meet the regulatory requirements in any way, nor to apply for a licence to operate the network. In view of the threat of fines, the industry is therefore calling for urgent clarification, as many neighbourhood or renewable energy projects could come to a standstill. For example, in its statement on the draft bill, the IDW also urgently calls for clarification on the distinction between customer installations and distribution networks.

Outlook

The draft bill introduces numerous new regulations for the energy industry. Energy suppliers are called upon to critically examine the new regulations to determine what action they need to take. For the renewable energy sector, however, the draft remains a double-edged sword. Despite the welcome expansion in Section 11c of the EnWG, the draft bill falls short of the expectations of the renewable energy sector. Some companies had already criticised the new amendment before it was published. From the perspective of the photovoltaic and storage industry, there is a great need for action, particularly with regard to better grid connection conditions, according to the German Solar Industry Association (BSW-Solar). In the opinion of BSW-Solar, the amendment must contain urgent measures that the solar industry and citizens are eagerly awaiting. Furthermore, it is incomprehensible why new regulations for the simplification, standardisation and digitalisation of grid connections are not included in the EnWG draft. There are also calls for the key parts of the “Solar Package 1” from 2024 and the “Solar Peak Act” from this spring, for which no state aid approval has been granted, to be urgently implemented with the current amendment to the EnWG.

Services et Groupes Environnement, Urbanisme et Réglementation