Energy sharing establishes a new legal framework for the joint use of electricity generated from renewable energy facilities. However, the framework remains narrow in scope, limiting participation to small consumers and excluding industrial users for the time being. Furthermore, in transposing the EU model, the German legislature chose not to enhance the attractiveness of energy sharing through financial incentives.
Current status
The “Act to Amend Energy Industry Law to Strengthen Energy Consumer Protection and Amend Further Provisions of Energy Law” (Gesetz zur Änderung des Energiewirtschaftsrechts zur Stärkung des Verbraucherschutzes im Energiebereich sowie zur Änderung weiterer energierechtlicher Vorschriften) was passed by the Bundestag on 13 November 2025. Among other measures, the Act introduces section 42c Energy Industry Act (Energiewirtschaftsgesetz, “EnWG”), under which end consumers within an electricity distribution system operator’s balancing zone will be able to participate in energy sharing from 1 June 2026. From 1 June 2028, energy sharing will also be permitted within the balancing zone of a directly adjacent electricity distribution system operator located in the same control area.
Background and opportunities
Energy sharing transposes a core element of EU internal energy market policy into national law and closely follows the draft bill published by the Federal Ministry for Economic Affairs and Climate in August 2024. The basis for this is Article 15a of the Internal Electricity Market Directive (Directive (EU) 2024/1711).
The “Schönauer Energy Community” pilot project by EWS Elektrizitätswerke Schönau illustrates the potential of energy sharing in practice. By sharing and managing solar power locally, the community increased self-consumption, enhanced public acceptance of renewable energy, and optimised generation and consumption through digital platforms and smart metering systems. The project highlights both the opportunities offered by energy sharing and the importance of clear regulation and efficient technical solutions.
Concept and requirements of energy sharing
According to section 42c EnWG, operators of a renewable energy facility (“facility operators”) can join forces with end consumers to share the electricity generated, provided certain requirements are met. It should be noted that the electricity shared under this arrangement merely supplements the existing residual electricity supply; the original energy supplier therefore remains unchanged (cf. section 42c(6) EnWG). Energy sharing requires the following:
- End consumers: Participation is limited to natural persons, microenterprises, small and medium-sized enterprises (“SMEs”), municipalities and other public law entities.
- Supply contract: Electricity must be supplied by the facility operator via the public electricity distribution network on the basis of individual supply contracts concluded between the facility operator and each participating end consumer.
- Joint use contract: In addition to the supply contract, a joint use contract must be concluded between the facility operator and each participating end consumer. The Act specifies minimum mandatory terms, namely (i) the scope of use, (ii) the allocation key and (iii) the remuneration;
- Territorial limitation: The renewable energy facility and all consumption points supplied must be located in the same area in which use is possible. From 1 June 2026, this is limited to the balancing zone of a distribution system operator; from 1 June 2028, it will also include the balancing zone of a directly adjacent distribution system operator within the same control area;
- Non-commercial main purpose: The operation of the renewable energy facility must not predominantly serve a commercial activity or self-employed activity of the facility operator, the end consumers, or the public law entity; and
- Interval metering: Both the electricity generated or stored in the facility and the electricity purchased at each supplied consumption point must be measured using interval metering, with readings taken at 15-minute intervals.
Obligations for grid operators and practical challenges
Section 42c EnWG gives rise to specific organisational, contractual and procedural requirements that grid operators, in particular, should address early on. For the sake of clarity, the legislature has insisted on two separate contracts: a supply contract and a joint use contract. This dual-contract structure has been expressly criticised by the Bundesrat as creating unnecessary bureaucratic obstacles and, in practice, such a structure requires increased coordination and documentation efforts.
Grid operators will also have additional obligations. From June 2026, electricity distribution system operators will incur compliance costs to enable energy sharing. In addition, the newly introduced section 20b EnWG requires electricity supply grid operators to establish and continuously operate a joint online platform for managing grid access. The Federal Network Agency (Bundesnetzagentur) is responsible for determining when this platform must be established and put into operation.
Section 42c EnWG currently does not provide for any specific financial support or incentives for energy sharing, such as reduced grid charges, premiums or tax benefits. In this respect, the German model differs from that of other Member States like Austria, Italy, and Spain, which have introduced incentive schemes. While EU law does not require the introduction of financial incentives, their absence may limit the market uptake of energy sharing arrangements in practice.
Conclusion and outlook
The introduction of section 42c EnWG opens up a new legal pathway for the shared use of renewable electricity in Germany. Energy sharing enables participants to collectively use locally-generated renewable energy and actively contribute to the energy transition. However, the current contractual and procedural complexity may initially temper its appeal.
Forward
