Germany’s grid digitalisation benefits remain largely untapped – European Commission

The European Commission has criticised lagging progress in Germany's efforts to digitalise its electricity infrastructure, including the smart meter rollout, and called on the government to focus efforts especially at the distribution grid level.

“The digitalisation of distribution grids is a key lever as smart grids can detect bottlenecks earlier, enable more efficient expansion planning and improve system stability,” it said as part of the 2026 European Semester Spring Package – a collection of reports aimed at providing guidance to European Union member states to steer action towards key EU priorities. 

Germany has been especially slow in rolling out smart meters. The technology allows customers to adapt their electricity demand to periods of high or low supply, and enable dynamic tariffs that reward households for shifting consumption to times when power is cheap and plentiful. More flexibility on the consumption side will be crucial as the share of renewables grows. As of December 2025, only 5.5 percent of customers in Germany were equipped with smart meters compared with 63 percent in the EU, said the report.

In its report, the Commission said Germany had made significant progress in renewable electricity expansion, but emphasised that more efforts were needed to reduce the overall dependence on fossil fuels. Germany should do more to encourage grid-friendly renewable electricity generation and flexible consumption patterns, as well as install more storage capacity to prevent negative price episodes during periods of high renewable generation, and alleviate grid congestion by reducing the need for curtailment and long-distance electricity flows. It also called on Germany to strengthen regional integration by expanding transmission corridors and supporting the cross-border integration of electricity markets and grids.

The Commission also criticised lagging decarbonisation progress in the transport, buildings and industry sectors. Existing “lengthy and complex permitting for industry installations” represented a hurdle to the swift deployment of clean industry technologies, “undermining decarbonisation efforts”.

Measures aimed at reducing energy prices had done little to change the fact that Germans still paid more for electricity than citizens in other EU member states, the report said. In 2025, Germany abolished the gas storage levy, reduced grid fees and the electricity tax, subsidised electricity for energy-intensive industry and financed the renewable energy sources surcharge from the federal budget, the report explained. “Despite these interventions, electricity prices have remained high, with households paying 31 percent more than the EU average,” it said. The Commission emphasised that any future measures aimed at cushioning the impact of rising energy prices should be “temporary, targeted at protecting vulnerable households or at addressing the needs of energy-intensive firms, and preserve incentives for energy savings.”