Grid Connection Reform: Capacity Allocation and Connection Queues

Why grid connection has become the bottleneck

For most energy projects in Germany, permits are no longer the hardest part – grid connection is. Network operators have received connection requests far exceeding available capacity, particularly from large battery storage projects and data centres, while the expansion of transmission and distribution grids takes years. In a 2026 decision, the Federal Network Agency quoted the transmission system operators' statement that they had already issued connection commitments for around 51 GW of large battery storage, with further applications in a queue. For many regions, available grid connection capacity has become the decisive factor for project feasibility and value.

The legal framework is changing in response. Operators are moving from first-come-first-served to maturity-based allocation, flexible connection agreements are being used more widely, and the federal government has proposed legislation to synchronise the expansion of generation with grid expansion. This article explains the current rules, the new allocation procedures and the reform proposals as of November 2026.

The legal duty to connect

Under § 17(1) EnWG, operators of energy supply networks must connect end consumers, downstream networks, charging points for electric vehicles, generation and gas storage installations, biogas facilities and electricity storage facilities on technical and economic terms that are appropriate, non-discriminatory, transparent and no less favourable than those applied internally or to affiliated companies.

They may refuse a connection if they prove that it is impossible or unreasonable for operational or other economic or technical reasons (§ 17(2) EnWG). A refusal must be justified in text form; on request, in the case of a capacity shortage, the justification must include meaningful information about the specific grid expansion measures and costs that would be needed to make the connection possible.

For renewable energy plants, § 8 EEG adds a specific connection right: grid operators must connect such plants without delay and with priority at the point that is suitable in terms of voltage level and closest as the crow flies, unless another point is technically and economically more favourable (§ 8(1) EEG). The plant operator may choose another suitable connection point unless the resulting additional costs for the grid operator are not insignificant (§ 8(2) EEG). Importantly, the connection priority under § 8 EEG and the CHP Act does not apply against energy storage facilities (§ 17(2a) EnWG), which compete on equal terms.

The duty to connect is distinct from the duty to expand the grid: operators must optimise, strengthen and expand their networks where economically reasonable, but they are not obliged to provide immediate capacity for every request. Disputes about refusals can be brought to the Federal Network Agency in special abuse proceedings or to the civil courts.

Capacity allocation: from first come to maturity

Where capacity is limited, the order in which requests are served becomes critical. Historically, many operators applied the first-come-first-served principle, with the date of a complete application determining rank. In its decision of 6 May 2026 – BK6-25-512, the Federal Network Agency described how a transmission system operator applied that principle until 1 April 2026, requiring applicants to submit evidence of seriousness and complete documentation before a request took rank. The transmission system operators then introduced a maturity-based procedure (Reifegradverfahren) for connection requests from storage facilities and large consumers, into which pending requests were to be transferred.

Maturity-based procedures allocate capacity in rounds, comparing projects on criteria such as secured land, planning and permit status, technical design, financing and timing, and in some cases their usefulness for the grid. They aim to filter out speculative requests and allocate scarce capacity to projects that can actually be built. For developers, this means that early investment in land, permits and design becomes a prerequisite for grid access rather than a consequence of it. Financing structures, development agreements and land options should be adapted accordingly, because more capital is at risk before a connection is secured.

Distribution networks

Most solar parks, onshore wind farms, smaller storage projects and commercial consumers connect to distribution networks operated by several hundred distribution system operators. Their procedures vary considerably: some publish capacity maps and standardised application portals, others handle requests individually. Many have introduced their own reservation periods, security payments and lapse rules to manage queues. Developers active in several regions should track these differences and consider early, well-documented applications combined with flexible connection offers where capacity is limited.

Flexible connection agreements and overbuilding

Flexible connection agreements allow grid operators to connect projects earlier by limiting their maximum capacity. Under § 17(2b) EnWG, operators of electricity networks can offer connectees a flexible connection agreement giving the operator the right to require a static or dynamic limitation of maximum withdrawal or feed-in capacity. The agreement must regulate, in particular, the maximum capacity, the periods of limitation, the duration, technical requirements and the connectee's liability for exceeding the limits. For renewable plants, § 8a EEG provides a corresponding instrument for limiting active power feed-in at the connection point, which can be combined with the choice of connection point under § 8(2) EEG.

A related approach is overbuilding: connecting more generation capacity behind a connection point than the connection capacity – for example combining solar, wind and storage – and accepting that peak output is curtailed. Such structures make better use of existing connection points and are often the fastest route to market. They require careful technical and contractual design, including metering, control systems and agreements between the operators of the different plants sharing the connection.

Connection costs, commitments and disputes

The connectee generally bears the costs of its own connection line and installations up to the connection point. Grid operators may also charge construction cost contributions towards the upstream grid infrastructure needed for the connection, whose calculation is subject to regulatory requirements and has been disputed, particularly for storage. For renewable plants, the costs of grid optimisation, strengthening and expansion are borne by the grid operator under the EEG, while the plant operator bears the costs of the connection itself.

Connection commitments typically contain conditions: deadlines for project milestones, security payments, information duties and rules on when the commitment lapses. These conditions must themselves be appropriate and non-discriminatory under § 17 EnWG. Developers should negotiate them carefully and track deadlines, because a lapsed commitment usually returns the capacity to the pool. When projects are sold, buyers should confirm that the commitment is transferable and that no lapse events have occurred.

Disputes about refusals, conditions or the ranking of requests can be brought before the Federal Network Agency in special abuse proceedings under § 31 EnWG, or before the civil courts. Such proceedings require detailed evidence, including the operator's justification, the capacity situation at the connection point and the treatment of competing requests. Interim relief is difficult to obtain, because courts are reluctant to order connections that may affect grid security. Negotiation, supported by a well-documented request and a clear understanding of the capacity situation, remains the most effective route in most cases.

The grid connection reform package

On 29 July 2026, the federal cabinet adopted two bills, according to the Federal Ministry for Economic Affairs and Energy: a reform of the EEG and a grid connection package – the draft Act amending energy law to synchronise the expansion of installations with grid expansion and to improve the grid connection procedure. The ministry describes the package as aligning new installations with grid expansion, sizing grid capacity to typical feed-in profiles rather than isolated peaks, accelerating connection procedures and allowing grid operators to prioritise connection requests and reserve capacity.

The EEG bill (Bundestag printed paper 21/7867) provides, according to the Bundestag's summary, that first-come-first-served will no longer apply when capacity is scarce, and that grid operators may prioritise by planning maturity and usefulness for the grid.

The bill also proposes that, in overloaded grid areas, compensation for part of curtailed electricity will be waived – limited to 18–20% of annual output and generally six years – to steer new plants towards locations where the grid can absorb their output. As of November 2026, both bills are in the parliamentary procedure; the content may change, and the EEG reform also requires EU state aid approval. Our article on the EEG reform 2027 covers the support changes.

Grid connection for large consumers

Large consumers – data centres, electrolysers, industrial heat pumps, electrified industrial processes and charging hubs – face the same scarcity. They are covered by the transmission system operators' maturity-based procedure and by distribution operators' own queue management. For them, the key strategic questions are site selection near available capacity, flexibility (whether the load can be reduced at grid peaks, which supports flexible connection agreements and may affect network charges), and the timing of grid expansion relative to their own investment. Municipal heat planning and industrial park planning increasingly take grid capacity into account. Our article on data centres covers specific obligations for that sector.

Construction cost contributions and connection costs can be significant, and their calculation is subject to regulatory oversight. Large consumers should also consider whether a direct connection to a generation plant or a customer installation structure can reduce reliance on the public grid. Such structures have their own legal requirements, which our article on direct lines and customer installations explains, and they do not remove the need for a backup connection in most cases. Early engagement with both the grid operator and the municipality helps to align site development, grid expansion and permitting timelines.

How TRW & Co helps with grid connection

We advise developers, investors, storage operators, industrial companies and data centre operators on grid connection in Germany. We prepare connection requests and maturity documentation, negotiate connection commitments and flexible connection agreements, structure shared and overbuilt connections, challenge refusals before the Federal Network Agency and the courts, and assess grid connection risks in transactions. We also follow the reform package and advise on its implications. Our work connects with our grids and EnWG and renewables practices and our article on battery storage projects. Please contact us. This article is general information and not legal advice.