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Glossary · Energy industry & energy transition

Direct line

Direct Line electricity supply grid connection PPA Industry renewable energies

A direct line is an electrical line through which a generation facility supplies a customer directly. The electricity does not flow through the public distribution grid. Generation and consumption are linked by a dedicated physical connection. Typical examples are lines from a wind farm, a photovoltaic installation or a combined heat and power plant to an industrial company, an electrolyser, a data centre or a commercial site. The term has a technical and a legal side. Technically, it concerns a line. Legally, the question is whether this line may be operated outside grid regulation.

Legal definition in the EU and in Germany

Under EU law, the Electricity Market Directive (EU) 2019/944 defines two variants of the direct line in Article 2, point 41. The first is a line that connects a single production site with a single customer. The second is a line that connects a producer or supplier directly with its own premises, subsidiaries and customers. Under Article 7, Member States must ensure that producers and suppliers can supply their customers through a direct line without being subjected to disproportionate administrative procedures or costs. Member States may, however, make construction subject to authorisation. The criteria for this must be objective and non-discriminatory. In addition, customers' right to conclude ordinary electricity supply contracts alongside remains unaffected.

In Germany, the Energy Industry Act (Energiewirtschaftsgesetz) defines the term almost word for word. In the currently available version, the definition is found in § 3 No. 27 EnWG. Older versions and many specialist texts still cite § 3 No. 12. The EnWG also counts a gas line built in addition to the interconnected grid to supply individual customers as a direct line. This gas variant is not covered here. Another consequence is important: anyone who supplies electricity to others via a direct line may be regarded as an energy supply undertaking under § 3 No. 39 EnWG. Supplier obligations may then arise even if no grid is operated.

The German definition of the customer installation (§ 3 Nos. 65 and 66 EnWG) expressly refers to the direct line in its current version. According to it, a customer installation may also exist where installations within the meaning of § 3 No. 1 EEG are connected via a direct line. This line may be no longer than 5,000 metres. Its nominal voltage must be between 10 and 40 kilovolts inclusive. Under § 3 No. 37 EnWG, customer installations are not energy supply grids. This rule applies to installations generating electricity from renewable energy sources. The limits relate to the length and voltage of the line, not to the capacity of the connected installations.

CJEU judgment of 17 September 2026

On 17 September 2026, the Court of Justice of the European Union interpreted the EU-law concept in the joined cases C-722/24 and C-756/24. Both cases came from Latvia. In the first case, a combined heat and power plant supplied several industrial customers via its own underground cable about 7.6 kilometres long. A further customer was to be added via a spur line of about 400 metres. In the second case, a customer already connected to the grid wanted to keep that connection as a backup.

The Court ruled that a new customer can be connected to an existing line without the line losing its status as a direct line. Moreover, a backup connection to the distribution grid does not preclude classification as a direct line. The Directive therefore does not require complete separation from the grid. However, the backup connection must not impair the tasks of the distribution system operator. The customer may therefore be subject to obligations, in particular an appropriate financial contribution. The CJEU expressly left open whether a direct line may supply any number of customers. The judgment therefore concerns specific constellations and is not a free pass for private parallel grids.

For Germany, the judgment is important above all because of the debate on the customer installation. In November 2024, the CJEU ruled that a Member State may not exempt line structures from grid regulation if they are distribution grids under Union law. Whether the direct line becomes a viable alternative for district, tenant electricity or industrial projects now depends on German implementation, permitting practice and the specific line models. There is as yet no conclusive clarification on this.

Distinction from grid connection, grid and self-supply

An ordinary grid connection links an installation to a grid for general supply. Such a grid is in principle open to every final consumer and is operated under regulation. A direct line, by contrast, serves a specific supply relationship between producer or supplier and customers. Grids carry other obligations, such as non-discriminatory grid access, regulated charges, unbundling, market communication and connection obligations. Where a line in its use takes on the characteristics of a grid, it is not the designation that decides but the legal classification. This applies, for example, if it permanently supplies a growing number of changing final consumers. Possible classifications are direct line, customer installation, closed distribution system or grid for general supply.

A direct line is also not the same as self-supply. In self-supply, someone consumes electricity from their own installation themselves. With a direct line, producer and consumer can be the same person but do not have to be. A wind farm operator can, for example, supply a third-party industrial company. The assessment then depends not only on the line. Ownership, operator status, supply relationship, metering concept and spatial proximity are also decisive. Likewise, the direct line differs from accounting-based green electricity procurement. Through guarantees of origin or a virtual PPA, electricity is only allocated commercially, while physically it continues to flow through the general grid. A direct line, by contrast, creates a real connection. However, it does not by itself answer questions of additionality, simultaneous supply or climate impact.

Technical design: energy, power and profiles

Electrical energy is transported over the line, measured in kilowatt-hours or megawatt-hours. For the design, however, the maximum power in kilowatts or megawatts matters most. A business with high but steady annual consumption does not necessarily need a large line. A business with moderate consumption and short, strong load peaks, on the other hand, may require high transmission capacity. The line, protection equipment and transfer points must therefore match the consumer's load profile and the installation's generation profile. The annual energy quantity alone is not sufficient as a yardstick.

No self-sufficiency: backup and residual load

Wind and solar power fluctuate with the weather and time of day. A solar park supplies no electricity at night, and a wind farm may generate little for hours or days. The firm capacity of weather-dependent installations is therefore well below their installed capacity. Anyone planning a direct line must consider the site's residual load. This is the demand that remains after deducting the directly supplied generation. It must be covered via the public grid, storage, dispatchable generation or load adjustment. The CJEU judgment confirms that a backup connection alongside the direct line is permissible under Union law. The grid operator may, however, demand an appropriate contribution for it. For security of supply, the public grid usually remains the central safeguard.

How much a direct line delivers depends heavily on the consumer's flexibility. An electrolyser, a battery, a refrigeration plant or individual process steps can partly adjust their power consumption to the supply of renewable generation. Chemical plants or smelting processes can usually do so only to a limited extent. The less flexible the consumption, the more grid electricity, storage or additional firm generation remains necessary.

Economic viability, metering and grid impact

For direct lines, avoided grid charges and grid-related levies as well as more direct price formation are often cited. Which charges, levies and taxes actually fall away in an individual case depends on the legal classification and on the metering concept. This must be examined separately for each project. The calculation is also incomplete without the costs for the line, permitting, securing land, maintenance, metering, operational management, backup connection and procurement of residual electricity. A dedicated line is not a free detour around the grid. It shifts tasks that the public grid performs collectively onto the parties involved. These include technical availability, protection equipment, switching authority, fault management and coordination with grid operators at the transfer points.

Metering is central. It must be clearly recorded which quantities are consumed directly, which are fed into the public grid and which are drawn from it. Without a reliable metering concept, supplied quantities, balancing groups, guarantees of origin, levies, taxes and contracts cannot be allocated cleanly. This applies particularly to sites that draw direct electricity and grid electricity at the same time.

Direct lines are sometimes presented as a substitute for grid expansion. That falls short. In individual cases they relieve the grid because electricity is consumed close to where it is generated. But they can also create new requirements, for example if the consumer draws high power from the grid during a period of low wind and solar output (Dunkelflaute) or if surpluses are fed in. What matters is which load and feed-in profiles remain at the grid connection points. Spatial proximity usually improves costs and grid compatibility. According to the CJEU's interpretation, however, it is not a mandatory prerequisite of the legal concept.

Conclusion

A direct line shows that electricity supply encompasses more than generation and consumption. It also includes allocation, transport, backup and rules. It makes sense where suitable load and generation profiles, clear ownership and supply relationships, a viable metering and operating concept and a legally secure classification come together. It becomes problematic when it is understood as an easy way out of grid charges, permits or grid bottlenecks. Since the CJEU judgment of 2026, the room for manoeuvre under Union law is greater. National permitting, metering and supplier obligations nevertheless remain in place.

Sources

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Edited by eCMS on 11.11.2026 19:14

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