Energy Industry Act (Energiewirtschaftsgesetz, EnWG) · Glossary

The Energy Industry Act, EnWG for short, is officially titled the "Act on the Supply of Electricity and Gas" (Gesetz über die Elektrizitäts- und Gasversorgung). It is the central German statute for grid-bound energy supply. Under Section 1(1), the supply of electricity, gas and hydrogen to the general public is to be as secure, affordable, consumer-friendly, efficient, environmentally compatible and greenhouse-gas-neutral as possible, and increasingly based on renewable energy. Hydrogen and greenhouse gas neutrality have been expressly written into the Act through amendments in recent years. Older descriptions that mention only electricity and gas are therefore incomplete. The EnWG governs how energy supply networks are operated, who gets access to them, how network operators are regulated, what obligations energy supply companies have, and which authorities are responsible for supervision and market monitoring.

The term "grid-bound" (leitungsgebunden) is important here. Electricity does not reach the customer like a parcel delivered by a freight forwarder, but flows through a physically interconnected power grid whose use must be coordinated. Networks are natural monopolies: parallel lines for every provider would make no economic sense. Competition is therefore possible mainly in generation, trading and retail. Network operation, by contrast, remains a regulated monopoly area. The EnWG gives this separation a legal order. Under Section 1(2), network regulation serves effective and undistorted competition, long-term efficient and reliable network operation, and an energy supply that is optimized from a whole-economy perspective.

Legal framework for grid, market and supply

The EnWG does not regulate every detail itself. Many specific requirements are found in ordinances, in determinations of the Federal Network Agency, in directly applicable EU law such as the European network codes, in the Renewable Energy Sources Act (EEG), in the Metering Point Operation Act (Messstellenbetriebsgesetz) and in planning and acceleration laws. The EnWG nevertheless remains fundamental because it establishes responsibilities and principles. It is also expressly intended to transpose and implement European energy law. Its core elements include:

Non-discriminatory grid access: Network operators may not arbitrarily deny other market participants the use of the grid, and may not favor their own retail or generation interests.
Unbundling: Network operation and competitive activities are separated in terms of accounting, information, legal form and organization. Stricter requirements apply to transmission system operators, up to and including ownership unbundling or alternative models provided for by law. Relief applies to small distribution system operators.
Regulation of network charges and of the permitted revenues of network operators.
Connection and supply obligations, including basic supply (Grundversorgung) and default supply (Ersatzversorgung) for household customers.
The system responsibility of transmission and distribution system operators, as well as instruments to secure supply.

Unbundling is an institutional prerequisite for an electricity market to function alongside regulated networks. Without it, an integrated company could use its position in the network to disadvantage competitors in retail or generation, for example through delayed connections or preferential access to network data.

Network charges: from the ordinance model to determinations by the authority

Network charges finance the operation, maintenance and expansion of the networks. The Federal Network Agency stresses that they are not taxes but the consideration for the network infrastructure. Network operators may therefore only recover the costs that a regulatory authority has recognized in advance as efficient. Until now, charges have been determined under the Electricity Network Charges Ordinance (StromNEV). The Incentive Regulation Ordinance (ARegV) sets revenue caps and thus creates incentives to reduce costs. At present, only network users who draw electricity pay. Under the ordinance framework currently in force, no network charges are levied for feed-in.

A common older account needs correcting here. In future, the design will no longer rest with ordinances of the Federal Government. On 2 September 2021, the Court of Justice of the European Union ruled that the Federal Network Agency, as regulatory authority, had too little discretion and could not act independently enough. StromNEV and ARegV will therefore expire on 31 December 2028. They will be replaced by determinations of the Federal Network Agency. For the electricity charging system, the "AgNes" procedure (Allgemeine Netzentgeltsystematik Strom, the general electricity network charge system) has been running for this purpose since 12 May 2025. It deals, among other things, with a fair distribution of costs, with prosumers and storage, and with possible feed-in charges. The authority put the final draft determination out for consultation in 2026. The determination is planned for the end of the year so that market participants have about two years for implementation. Anyone discussing the electricity price should therefore keep energy procurement, network charges, taxes, levies and surcharges apart. The EnWG does not set end-customer prices, but it strongly shapes how the network cost block arises, is reviewed and is distributed.

Distinction from the EEG, market rules and technical grid operation

The EnWG is often confused with the EEG. The EEG mainly regulates support, remuneration and market integration of renewable electricity generation. The EnWG regulates the basic order of the energy industry, that is, grid access, grid operation, regulation, market roles and supply obligations. Both laws interlock and are often amended together in so-called omnibus amending acts (Artikelgesetze). For example, at the beginning of 2025 the so-called Solar Peak Act (Solarspitzengesetz) adapted rules on the controllability of photovoltaic systems in the EnWG, the EEG and the Metering Point Operation Act.

The EnWG should also not be equated with technical grid rules. Frequency control, voltage control, technical connection conditions and congestion management rest on technical rulebooks, European network codes, contracts and determinations by the authority. The EnWG creates the legal basis for network operators to be allowed or required to take such measures. Redispatch makes this particularly clear: where congestion threatens, network operators may, under defined rules, instruct generation plants, storage or loads to change their feed-in or withdrawal. The technical measure only becomes effective, however, once responsibilities, financial compensation, data obligations and intervention rights have been regulated.

The EnWG is also not an electricity price act. Section 1 even expressly names the goal of strengthening free price formation for electricity through competitive market mechanisms and of enabling supply and demand to be balanced on the electricity markets at all times. At the same time, the Act protects household customers, for example through rules on basic and default supply, contract information and supplier switching. At the end of 2025, these supplier obligations were revised in the course of implementing new EU consumer protection requirements. A provision on the shared use of locally generated renewable electricity, so-called energy sharing, was also added.

Why the EnWG matters for the electricity system

Electricity supply rests on simultaneity: generation, consumption and network capacity must match at every moment. This task cannot be solved by voluntary market decisions alone. The EnWG assigns tasks to transmission system operators and distribution system operators, such as grid connection, network expansion planning, congestion management, system responsibility and cooperation with one another. Under Section 1, regulation is to take into account, among other things, the forward-looking expansion and digitalization of the networks, as well as the flexibilization of the electricity system including energy storage, and an appropriate distribution of network costs in the expansion of renewable generation.

With electrification, the practical importance of these rules is growing. Heat pumps, wallboxes, battery storage and photovoltaic systems change load profiles and feed-in patterns, above all in the distribution networks. These networks were long planned for only one direction of flow: from above to the consumers. A vivid example is Section 14a EnWG. Since 1 January 2024, a newly connected controllable consumption device in the low-voltage network with more than 4.2 kW of grid connection capacity must allow the network operator to "dim" it. This applies, for example, to heat pumps, private charging points, air conditioners or electricity storage units. The network operator may curtail consumption only temporarily, when overload or damage to the network threatens. Even then, at least 4.2 kW must remain available. In return, the operators receive reduced network charges. This shows how the EnWG shifts the question: away from mere connectability, toward coordinated network use, in which expansion and targeted control work together.

Typical misunderstandings

"The EnWG is merely administrative law." In fact, it influences which investments pay off, which costs are recognized, how grid connections are processed, which data must be exchanged and which rights market participants have against network operators.
"More competition means less regulation." In the electricity sector, competition precisely presupposes regulated grid access, transparent charges and clear unbundling. Otherwise the monopoly position of the networks would spill over into trading and retail.
"The EnWG guarantees security of supply." A law cannot create physical security. It creates procedures, responsibilities, monitoring, reserve instruments and intervention rights. Security of supply itself arises from power plant and network availability, flexibility, imports, fuel supply and crisis preparedness.

Institutional significance

The EnWG shows that electricity supply is neither a completely free market nor a purely state-run infrastructure. It consists of regulated monopoly areas, competitive segments and public guarantee tasks. The Federal Network Agency, the state regulatory authorities, network operators, suppliers, metering point operators, plant operators and final consumers act in legally defined roles. Anyone who mixes up these roles easily misreads conflicts. If, for example, a grid connection is delayed, this may be due to a lack of network capacity. But it may also be due to processes, staff, data requirements or regulatory incentives. The EnWG does not regulate every processing step. It does, however, set the framework for connection claims, reasonableness, obligations and dispute resolution.

The same applies to flexibility. A battery can physically shift energy over time. Whether it trades on the market, is used for the benefit of the grid or is burdened twice by charges is decided by rules in the EnWG and in the subordinate determinations. The Act thus does not describe the flow of electricity itself. It describes the order in which electricity flows are planned, traded, measured, limited, settled and secured. In doing so, it determines who may act, who must act and which costs are recognized and distributed. Because the Act and the determinations are frequently amended, the current version should always be checked for specific legal questions.

Sources

Energiewirtschaftsgesetz (EnWG) § 1 Zweck und Ziele des Gesetzes — Bundesministerium der Justiz / Bundesamt für Justiz (gesetze-im-internet.de); unbekannt (§ 1 in der Fassung seit 29.12.2023). § 1 Abs. 1, Abs. 2 und Abs. 4
„AgNes“ erklärt — Bundesnetzagentur; unbekannt (Stand 2026). Einleitung, Abschnitte Zielbild und Status quo
§ 14a EnWG Steuerbare Verbrauchseinrichtungen – Integration von steuerbaren Verbrauchseinrichtungen — Bundesnetzagentur (Verbraucherportal); unbekannt. Abschnitte Anwendungsbereich und Mindestleistung
Bundesnetzagentur startet Konsultation zur Reform der Netzentgeltsystematik Strom — Bundesnetzagentur (Pressemitteilung); unbekannt (2026). Pressemitteilung, Einleitung und Zitat des Präsidenten

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Edited by eCMS on 11.11.2026 19:46