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Glossary · Energy industry & energy transition

Basic supply (Grundversorgung)

Default supply Default supplier electricity supplier final consumer electricity price Household customers regulation emergency supply electricity market

In Germany, basic supply (Grundversorgung) refers to the statutorily regulated supply of household customers with electricity by the default supplier (Grundversorger) responsible in the respective network area. A corresponding regime exists for gas, but this entry covers electricity only. The default supplier must publicly announce General Terms and General Prices for supply at low voltage and publish them on the internet. It must supply every household customer on these terms. Exceptions apply where supply cannot reasonably be expected of it for economic reasons. Basic supply applies above all when someone uses electricity without having concluded their own supply contract with another provider. For example, anyone who moves into a flat and switches on the light concludes a basic supply contract under the Electricity Basic Supply Ordinance (StromGVV) through this consumption alone, that is, tacitly.

Basic supply is not a technical state of the electricity grid but a supply relationship in the legal and energy-industry sense. Physically, electricity always flows through the local distribution grid, regardless of which electricity supplier supplies the customer. The default supplier has the role of supplier: it procures electricity and manages consumption in a balancing group. It invoices electricity, network charges, taxes, levies and surcharges. The network operator, by contrast, is responsible for safe grid operation.

Legal basis and determination of the default supplier

The most important bases are Section 36 of the Energy Industry Act (EnWG) and the StromGVV. The default supplier is the energy supply company that supplies the most household customers in a network area of general supply. The operators of these networks must determine this every three years as of 1 July for the next three calendar years. They must publish the result on the internet by 30 September and notify the competent state authority. What matters is therefore the number of household customers, not the form of ownership. A municipal utility, a regional supplier or a large group can be the default supplier. If another company takes over this role, existing basic supply contracts continue on the previous terms and prices. Section 36 EnWG does not apply in closed distribution systems.

The term household customer is broader than a private household in everyday usage. It refers to final consumers who purchase energy predominantly for their own household. It also includes consumers who use electricity for professional, agricultural or commercial purposes, as long as this consumption does not exceed 10,000 kilowatt-hours per year. A small office or a craft business with low consumption can therefore be a household customer. A commercial business with higher consumption, by contrast, has no entitlement to basic supply and must conclude a supply contract itself. A special rule concerns customers who cover their own needs with their own generation plant or have themselves supplied by third parties. They have no entitlement to basic supply at the General Price. They can, however, demand basic supply to an extent and on terms that are economically reasonable for the supplier.

Distinction from special contracts and default supply

A special contract is a freely negotiated electricity supply contract, for example with a price guarantee, bonus, minimum term or green electricity. It does not have to follow the standard terms of basic supply. The local default supplier also usually offers such special tariffs. Anyone on a special tariff with it is its customer, but is not supplied under basic supply.

Default supply (Ersatzversorgung) under Section 38 EnWG is a statutorily ordered emergency supply. It applies when electricity consumption cannot be assigned to any supplier or any supply contract, for example after the insolvency of a supplier or in the event of errors during a supplier switch. Unlike basic supply, it is available to all final consumers on the low-voltage network of general supply, not only household customers. It ends as soon as a new supply contract applies, but no later than three months after it begins. There is no notice period for its end. Household customers who continue to draw electricity afterwards move into basic supply. For other final consumers, basic supply does not follow after three months.

The two types of supply also differ in prices. Since the legal amendment of July 2022, the default supplier may set its own General Prices for default supply, including for household customers prices higher than in basic supply. It must then show the procurement costs included separately. They must not be higher than for short-term procurement of the necessary quantities via exchange products. It may adjust default supply prices without notice on the 1st and 15th of a month. It must keep the prices of the last six months available on its website. The earlier rule, under which default supply prices for household customers could not exceed basic supply prices, no longer applies in this form. In practice, many default suppliers nevertheless charge no surcharge.

Basic supply is also not the same as security of supply. Security of supply describes whether the electricity system has enough generation, grid capacity and reserves to meet demand at all times. Basic supply answers a different question: who supplies a household that has no contract of its own?

Why the electricity market needs basic supply

Since liberalisation, households can freely choose their supplier. For this competition to work across millions of metering points, a reliable fallback rule is needed. Refrigerators, heating pumps, communication devices or medical aids should not fail merely because a contract is unclear. In such cases, basic supply clearly assigns responsibility for supply to a local company.

In return, the default supplier bears a particular risk: it must take on customers whose consumption it has not planned for. In the energy price crisis of 2021/22, many low-cost providers terminated their contracts or stopped supplying. Default suppliers then had to buy additional quantities at short notice at very high wholesale prices. Some therefore introduced separate, more expensive tariffs for new customers. The legislator prohibited this in 2022: General Terms and Prices may no longer differentiate according to when the basic supply contract came into being. The higher price for quantities procured at short notice has since been reflected through default supply.

Price, regulation and common misunderstandings

  • Not a state tariff: The default supplier calculates its prices itself and publishes them. No authority approves them in advance. The publication must be easy to find and clearly labelled as basic supply. Price changes are bound by statutory deadlines and information obligations and can be reviewed by the courts. Customers can terminate basic supply at short notice and switch.

  • Not automatically cheap: Depending on timing, basic supply can be cheaper or considerably more expensive than competitive tariffs. Anyone comparing should consider the energy price per kWh, the basic charge, their own consumption and the contract terms together. The end-customer electricity price follows the wholesale electricity price only with a time lag. This is due to long-term procurement and to fixed electricity price components.

  • No unlimited protection against disconnection: If a household customer does not pay despite a reminder, the supplier may have supply interrupted under Section 41f EnWG, at the earliest four weeks after a warning. For this, the payment arrears must reach a minimum amount. It is twice the instalment payment attributable to the current month or, if there are no instalments, one sixth of the expected annual bill. The supplier must announce the start of the disconnection in writing eight working days in advance. Disconnection is impermissible if it would be disproportionate, in particular if someone in the household is especially vulnerable. In basic supply, the default supplier must additionally offer an avoidance agreement under Section 41g EnWG, for example payment in instalments. The rules mitigate hardship in cases of energy poverty but do not remove the obligation to pay. The earlier disconnection rules in Section 19 StromGVV were moved into the EnWG.

  • Not the network operator: The network operator is responsible for connection, grid operation and physical transmission. The default supplier only sells the electricity. Both roles are legally separated through unbundling, even if they often come from the same municipal utility. The supplier can be changed, the network operator cannot.

Significance for the electricity price debate and electrification

The basic supply price is often seen as a political yardstick for the burden on private households. Anyone wanting to assess it fairly must look at more than the current wholesale price: the procurement strategy, the price components, the time lag and the costs of customers taken on without planning. Under the EnWG, a report evaluating basic supply is to be available by July 2027. It is to examine above all how the default supplier is determined and what alternative procedures there might be.

With heat pumps and electric mobility, consumption and the importance of the load profile are rising in many households. This makes flexibility, controllable consumption devices and time-variable tariffs more important, for example a time-of-use tariff. Classic basic supply with a uniform energy price per kilowatt-hour barely reflects such differences. It remains the safety net but is usually not the suitable price model for flexible loads.

In short: basic supply guarantees neither cheap electricity nor a stable grid. It sets out by law who supplies a household customer without a contract of their own. Precisely because this fallback solution exists, the electricity market can allow free choice of provider.

Sources

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Edited by eCMS on 12.11.2026 05:05

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