Federal Minister for Economic Affairs and Energy · in office since 6 May 2025

Timeline Media
Katherina ReicheEnergy · Industry · Public office
15Energy & Industry · Systems

The grid as the bottleneck

Wind and solar parks can be added faster than the lines needed to carry their power. Katherina Reiche came to the ministry from five years running one of Germany's largest distribution-grid operators. Her signature infrastructure measure, the 2026 grid package, changes who gets connected, who pays and when curtailed generators are compensated.

Approved in 2025~2,000 km
Legally required~16,800 km
Grid packageFirst reading 24 Sep 2026
Katherina Reiche walking and talking with a colleague outside a modern glass building
Katherina Reiche in conversation with a colleague outside a modern glass building.
System map

How energy reaches the consumer

The electricity system runs through four levels, each with its own operators, rules and policy levers. Gas and hydrogen form a parallel molecule network.

Electricity
Level 1

Transmission

Extra-high-voltage lines, including the long-distance direct-current (HVDC) corridors that carry northern wind power south. Lines are approved by the Bundesnetzagentur; grid fees were subsidised with €6.5 billion in 2026.

Level 2

Distribution

Regional and local networks. According to Westenergie, more than 95% of renewable plants are connected at this level. Westenergie's grid companies alone operate about 196,000 km of power lines.

Level 3

Connection

Where new plants, batteries and large consumers join the grid. The grid package replaces "first come, first served" with a maturity principle and widens construction-cost contributions.

Level 4

Consumer

Households and firms, who pay grid fees on their bills. Smart meters, the basis for flexible use, were installed in under 3% of cases in 2025.

Gas & hydrogen
Import & storage

Gas supply

1,031 TWh imported in 2025, including LNG via terminals at Wilhelmshaven, Brunsbüttel, Lubmin and Mukran. Storage targets were relaxed in 2025.

Distribution

Gas grids

Westenergie's grid companies run about 37,000 km of gas network. Westnetz converted a public gas line to 100% hydrogen in a 2022–2023 pilot.

Conversion

Hydrogen core network

About 9,040 km approved in October 2024, roughly 60% converted gas pipelines, €18.9 billion, completion by 2032.

Sources: Bundesnetzagentur; Westenergie statement to the NRW Landtag (Oct 2024, company figures); FNB Gas; Gleiss Lutz summary of the ten-point plan.

Transmission expansion

Approvals accelerate, construction lags

Verified fact In 2025 the Bundesnetzagentur approved about 2,000 km of lines – 45 per cent more than the 1,280 km approved in 2024. In total about 4,700 km are fully approved, of about 16,800 km of expansion required by law nationwide; around 9,600 km fall under the agency's direct responsibility.

Analysis Approval procedures take years, so the 2025 figure largely reflects work begun before she took office. "Fully approved" also does not mean "built": the measure of success for consumers is lines in operation, and the clearest test is SuedLink in 2028.

Expansion required by law, nationwide16,800 km
Under Bundesnetzagentur responsibility9,600 km
Fully approved (cumulative)4,700 km
Approved in 20252,000 km
Approved in 20241,280 km

Approximate figures, scaled to 16,800 km. Source: Bundesnetzagentur, 2 January 2026.

The four north–south HVDC corridors
CorridorApproval statusNote
A-NordFully approved—
UltranetFully approved—
SuedLinkFully approved on 10 October 2025Due to be connected to the grid by 2028
SuedOstLinkFully approved—

Source: Bundesnetzagentur press releases of 10 October 2025 and 2 January 2026.

2026
Cabinet 29 July 2026 · First reading 24 September 2026

The grid package (Netzpaket)

Adopted together with the EEG 2027 reform, the package is designed to cut the cost of connecting new generation and of paying for power that the grid cannot absorb.

Maturity principle

Grid connections move from "first come, first served" to a "Reifegradprinzip": projects that are further advanced get priority, rather than whoever applied first.

Construction-cost contribution

Network operators get wider powers to charge a Baukostenzuschuss, a contribution from those connecting towards the cost of grid reinforcement.

Redispatch hotspots

Grid-congestion areas are to be designated where compensation for curtailment is limited. Ingenieur.de reports that up to 20 per cent of a plant's annual output could go unpaid.

Timetable

Final votes in the Bundestag and Bundesrat are expected in November 2026, as of October 2026.

Criticism

On the February 2026 draft, Green MP Michael Kellner wrote that it was "eine Gefälligkeit für E.ON, nicht für die Energiewende" (a favour for E.ON, not for the energy transition), in a guest article published by leinetal24. No ministry reply was found.

Money flows

Who pays for the grid

Grid costs reach consumers through grid fees. Since 2026 the federal budget has carried part of the transmission share.

€500bn

Special fund

Infrastructure and climate neutrality, created in March 2025 before Reiche took office. €100bn goes to the Länder and €100bn to the Climate and Transformation Fund (KTF). Implementing law published 2 October 2025.

€6.5bn

Grid-fee subsidy 2026

Federal subsidy for transmission grid fees in 2026; the law has been in force since 12 December 2025.

€5.525bn

Per year, 2027–2029

Planned subsidy from the KTF, roughly 15% less than in 2026 (cabinet plan, August 2026).

Analysis The subsidy lowers bills without reducing the underlying cost of the grid, which is why the package also targets connection and curtailment costs. The planned reduction from 2027 means that households and firms will carry more of the cost again unless those measures work.

The congestion problem

Why missing lines cost money twice

When transmission capacity is short, power generated in the windy north cannot reach demand in the industrial south and west. Grid operators then order wind farms to curtail output and start plants on the other side of the bottleneck instead – a process called redispatch. Under existing rules, curtailed generators are compensated. Consumers therefore pay for the power that was not used and for the replacement power that was, on top of the cost of the grid itself.

Political position The ministry's answer has three parts: build lines (the approvals of 2025), steer new plants to where the grid can take them (the maturity principle, construction-cost contributions and redispatch hotspots), and use existing capacity more flexibly (smart meters, the grid traffic light, co-location of storage with generation).

Analysis Limiting compensation shifts part of the cost of grid delays from consumers to plant operators, and so changes where investors will want to build. Whether parliament keeps this "Redispatch-Vorbehalt" was an open question after the first reading in September 2026.

What to watch
  1. November 2026

    Final votes on the grid package

    Bundestag and Bundesrat decisions expected, together with EEG 2027.

  2. End of 2026

    EU approval of EEG 2023 expires

    The deadline that sets the pace for the reform.

  3. 2027

    Grid-fee subsidy falls

    Planned €5.525 billion a year until 2029, down from €6.5 billion.

  4. 2028

    SuedLink due

    The largest north–south corridor scheduled to be connected.

  5. 2032

    Hydrogen core network complete

    9,040 km scheduled; a technology-neutral capacity market also begins under the StromVKG.

Her perspective

A distribution-grid view of the energy transition

Before becoming minister Reiche spent a decade on the distribution side of the system: from 2015 to 2019 as chief executive of the VKU, the association of municipal utilities, and from 2020 to 2025 as CEO of Westenergie, E.ON's largest subsidiary. In a 2024 statement to the North Rhine-Westphalia state parliament, the company described distribution grids as the "infrastrukturelle Rückgrat" (infrastructural backbone) of the energy transition.

A Tagesspiegel Background interview with her ran under the headline "Der Fokus liegt zu stark auf den großen Trassen" – the focus is too strongly on the big transmission lines. The article is paywalled and its date could not be confirmed; only the headline is cited here.

Analysis That perspective is visible in her policy: attention to connection queues, construction-cost contributions and congestion at the distribution level, alongside the transmission build-out she inherited. It also explains why critics read the grid package through the lens of her former employer.

Criticism LobbyControl argued at her appointment that she would struggle to keep the necessary distance from the energy industry. The government's position is that the general legal rules on conflicts of interest apply and are followed; no formal recusal from E.ON-related matters has been documented.

Smart meters and flexibility

The ten-point plan of September 2025 put the smart-meter rollout at under 3 per cent and called for a "Netzampel" (grid traffic light), cable pooling and capacity-based grid fees, so that the existing grid can be used more fully before new lines are built.

Westenergie gas grid
~37,000 km (company figure)
Westenergie power grid
~196,000 km (company figure)
Renewables on distribution grids
"über 95 %" (Westenergie, 2024)
Total German distribution grid
Not stated here – no verified figure

Westenergie and VKU years

Sources
  1. Bundesnetzagentur — Grid expansion in 2025
  2. Bundesnetzagentur — SuedLink fully approved
  3. S&P Global — Cabinet approves EEG reform and grid package
  4. Ingenieur.de — EEG reform and grid package
  5. t-online — What the reforms contain
  6. Tagesspiegel Background — First reading
  7. Solarserver — Bundestag debate on redispatch
  8. Federal Government — Reduction in energy prices
  9. pv magazine — Grid-fee subsidy to fall
  10. VDIV — Grid fees 2027
  11. Federal Government — Special fund
  12. Vergabeblog — Bundesrat approves special fund law
  13. Gleiss Lutz — The ten-point plan
  14. Westenergie — Statement to the NRW Landtag, Oct 2024 (PDF)
  15. Tagesspiegel Background — "Der Fokus liegt zu stark auf den großen Trassen" (headline)
  16. FNB Gas — Hydrogen core network
  17. ZfK — Westnetz hydrogen pilot
  18. Bundesnetzagentur — Gas supply 2025
  19. LobbyControl — Appointment statement, Apr 2025
  20. Bundestag Drucksache 21/1136 — Government answer on compliance
  21. Wikipedia (de) — citation for the Kellner guest article (leinetal24, 26 Feb 2026)