Where do customer systems play a role in the expansion of renewable energies?
The expansion of renewable energies is becoming increasingly complex. Whereas in the past a system was usually connected to the public grid through a direct line, today there are a variety of constellations in which the grid connection is shared. For example, either a common cable or a common route is used or various renewable energy systems are connected to a common substation or a battery storage system is installed at the sub-station or along the cable route. In addition, the rights to the renewable energy system, the connection infrastructure to the substation and the substation itself are increasingly being split between different companies.
In practice, the classification under energy law of the park cabling, the connection infrastructure and the substation has hardly been relevant to date, as the term “customer system” has been used in cases of doubt. In this context, the legislator only clarified at the end of 2023 that this also includes direct lines with a length of up to 5 km (Section 3 no. 24a(a) Energy Industry Act (EnWG)).
What does the categorisation as a customer system mean?
German law distinguishes between (unregulated) customer systems (Section 3 no. 24a and b EnWG) and direct lines (Section 3 no. 12 EnWG), whereby the direct line requires use by only one person/company (single use) and (partially or fully) regulated electricity grids. The law does not (yet) recognise a special category for connection infrastructures, meaning that these also generally fall into one of the three categories. The operation of a customer system or direct line is significantly less costly than grid operation and is also economically more attractive. According to Section 3 no. 16 EnWG, customer systems are not part of the energy supply grid and the operators of such systems are accordingly exempt from the grid operator obligations. In contrast, regulatory requirements apply to grid operation, grid fees must be calculated and charged (along with grid-related levies and charges) and grid operation requires approval from the regulatory authority.
What did the ECJ decide?
In its ruling of 28 November 2024 (preliminary ruling procedure), the ECJ ruled that there is no model in European law for the customer system provision created in Germany in accordance with Section 3 no. 24a EnWG. The German regulation is therefore contrary to European law because it provides for additional exemptions from the obligations of a network operator over and above those provided for by the Internal Electricity Market Directive.
The Federal Court of Justice is expected to rule in May 2025, whereby there is virtually no room for argument in the constellation to be decided. However, it remains unclear whether the BGH and the BNetzA will apply the decision to all constellations or whether there will be special regulations due to the reversed constellation in the feed-in instead of withdrawal sector. This also applies to avoid jeopardising the clarification regarding direct lines that was only included in Section 3 no. 24a (a) EnWG.
It is still unclear whether Section 3 no. 24a EnWG will even be retroactively declared contrary to European law (meaning that grid fees, levies and charges will have to be charged retroactively), but this seems rather unlikely.
What does this mean for the renewable energy sector?
Particularly in constellations in which there is no single use of the connection lines or the sub-station, the question arises as to whether the ECJ’s decision will result in the infrastructure becoming a (regulated) network and its operator becoming a network operator subject to authorisation. This could have far-reaching consequences, particularly for contractual constructs for line or sub-station (shared) use and turn previous cost distribution mechanisms on their head.
Due to the far-reaching consequences of an infringement (fines and illegality of contractual provisions), it is not recommended to wait for a possible (positive) clarification for the renewable energy sector, but to consider the issues for new projects and projects in the planning stage.
We generally recommend the following steps in this regard:
- Appraisal of the status quo to identify the problem
- Determine whether possible alternative concepts are available that can solve the problem
- Determination of the need for adaptation to develop a legally secure and economically viable supply concept (if necessary, grid operation by third parties)
- Communication with the authorities namely the Federal Network Agency and, if applicable, the energy regulator (as soon as the Federal Court of Justice has ruled in May 2025)
If you have any questions, please do not hesitate to contact us.
