Germany’s grid regulator is nearing an agreement to meet some demands from energy operators regarding infrastructure spending returns. The reform, covering the five years from 2028/2029, is expected to be finalised this year, Handelsblatt reported on Wednesday. According to draft reform documents, caps will be set on grid companies’ earnings. These caps aim to balance the need to control consumer bills with the provision of incentives for investors.
Klaus Mueller, president of the Bundesnetzagentur regulator, stated that the reforms aim to create an attractive investment environment while limiting costs to the necessary minimum. While the report didn’t specify the exact rates of return on equity, it noted that concessions have been made regarding operating cost increases for companies of all sizes over the five-year periods. The regulator has also reportedly eased efficiency requirements.
Grid firms will have improved ability to account for interest on debt capital. The reform process, known as NEST (Netze.Effizient.Sicher.Transformiert), is scheduled for completion by the end of this year. It will apply to electricity grids starting in 2029 and gas networks from 2028. Power grid operators, such as Amprion, have previously argued that current equity-return rates are insufficient to finance the energy transition to renewables.
The expansion and strengthening of networks is essential to manage rising power demand from AI-driven data centres and the electrification of heating and transport. Conversely, gas pipeline operators are facing declining customer bases due to reduced fossil gas use, even as they need to invest significantly in new hydrogen-compatible infrastructure. These reforms aim to address these evolving needs within Germany’s energy sector.