Financing and permitting reforms needed to reach German 2030 renewables target – grid operators

Many German network operators agree that the country’s target of achieving 80 percent renewables in electricity consumption by 2030 cannot be reached in the electricity distribution grids without substantial regulatory reforms, local utility association VKU said based on a survey among its members. Around one fifth of the association’s 756 member companies with an electricity division participated in the survey. Of these, 91 percent agreed or partly agreed with the statement: “Without structural changes – particularly in terms of financing, the approval and planning procedures for grid expansion, and the use of flexibility measures – the target of increasing the share of renewable energy to 80 percent of gross electricity consumption by 2030 cannot be achieved within the distribution networks.”Germany’s energy transition is advancing with a massive expansion of renewables, with sources like wind and solar power covering nearly 56 percent of the country’s gross electricity consumption in 2025. This transition comes with substantial challenges for local and regional electricity distribution networks, which have to manage an increasing share of intermittent renewables feed-in, as well as a rising number of power consumers like heat pumps and electric vehicles (EVs). Regulation is only one of the challenges that distribution network operators face, said VKU. Survey respondents said that the bureaucratic burden involved in planning grid routes (66%), shortages of materials and transformers (54%), lengthy approval and environmental impact assessments (48%) and a lack of construction capacity (47%) are also major obstacles to grid expansion. Almost 80 percent of respondents said a recent rule reform that governs the risk and return profile of network operators – the so-called NEST process (Networks-Efficient-Safe-Transformation) – has negative effects on their business.Expanding and upgrading electricity distribution grids is key for a successful energy transition. Bottlenecks have meant that queues for access are getting longer, and that renewable electricity is curtailed instead of used.

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