Better planning, operating of distribution network could save Germany billions in grid charges – report

Germany can limit the increase in grid fees during its energy transition and save up to 12.4 billion euros annually by 2045 through better management of its electricity distribution networks, according to a report by consultancy 3Epunkt. The findings challenge a growing political consensus that soaring grid costs are an unavoidable consequence of the transition to decentralised renewable energy sources and point to three concrete areas where savings could be made, said author Tim Meyer.

A large part of the potential gains, up to seven billion euros per year by 2045, could come from making better use of existing infrastructure. Germany's 851 distribution network operators are leaving significant capacity on the table, the report said. A cable linking a solar farm runs at just over 10 percent of its potential capacity, sitting idle at night, for instance, and a typical household connection averages just a few percent. Greater digitalisation and flexible pricing to shift consumption away from peak times could unlock those reserves, the report's author argued.

A further 3.5 billion euros per year by 2045 could be saved by standardising operations across Germany's fragmented network of operators, each running its own software systems, procurement processes, and administrative structures. Reforms that might take two years in the United States or China take a decade in Germany, partly because policymakers must negotiate with hundreds of individual operators and their lobby groups, business weekly WirtschaftsWoche said.

Meyer also singled out returns on equity, which averaged 24 percent among the 22 operators examined - far above the 3.5 to 5.1 percent the regulator intended. As electricity grids are natural monopolies with no local competition, customers have no choice but to accept whatever costs are passed on to them. Bringing those returns down could save consumers billions, according to the report.

The report was published amid a heated debate over grid investment in Germany, where wind and solar accounted for over 57 percent of electricity generation in 2025. Germany's economy minister Katherina Reiche has cited those rising costs as justification for policies she says are intended to better align renewables expansion with grid expansion. Some argue grid access reforms that would curb priority grid access for renewables could slow the energy transition at a time when fossil fuel dependence is becoming an increasing geopolitical liability.

According to the report, the real problem is one of management and regulation rather than capacity. "Exploding grid costs are not an inevitable scenario," according to a statement. "They only threaten to materialise in the absence of political action."