The regulatory privilege granted to large electricity consumers in the industry, known as the demand-smoothing benefit, has been extended until the end of 2031. This decision was announced by Klaus Müller, head of the German Federal Network Agency (Bundesnetzagentur), in a statement to Politico. The agency is scheduled to officially release the updated regulations this Wednesday. Originally, this arrangement was set to expire in 2028.
Müller explained the extension as a desire to significantly lengthen the transition period because he has observed that companies first need time and capital to invest in the necessary infrastructure and prepare themselves to operate more flexibly. The Federal Network Agency’s stated aim is to ensure that energy-intensive industries can continue to maintain production within Germany.
Under the current demand-smoothing benefit, energy-intensive sectors-such as chemical, paper, and glass manufacturers-receive significantly reduced grid fees provided they meet a minimum usage requirement of 7,000 full-load hours per year. These hours measure how evenly a company consumes its power.
According to Müller, this system was appropriate for a time when large coal and nuclear power plants produced a very uniform supply of electricity, which was expected to be consumed similarly. However, with the rapid expansion of renewable energies, the amount of electricity in the market fluctuates more drastically. “Therefore, the new skill in the electricity system of the future is consuming more flexible power” Müller noted. Consequently, the subsidies must be adapted to reward flexible consumption behavior and to establish a solution that complies with European law.
To facilitate this transition, the Federal Network Agency is currently running a pilot program involving six key companies, with support from the business associations BDI and DIHK. This trial will conclude by the end of this year, allowing the agency to introduce a general regulation in early 2027. This future rule is designed to complement the existing protective regulation, ensuring permanently low grid fees while requiring the receiving companies to provide European-legally compliant flexibility in return.
