A €450B Plan to Rewire Germany’s Energy Future

Berlin proposes a cost-based grid overhaul to unlock €450B in upgrades, betting on speed and certainty to carry renewables to 2045

6 Mar 2025

Germany is rethinking how it builds the wires behind its energy transition. In March 2025, the country’s energy regulator, the Bundesnetzagentur, unveiled a proposal to overhaul grid financing, aiming to clear the logjams slowing the shift to clean power.

At the heart of the plan is a move away from an incentive-based system that many grid operators say no longer works. In its place would be a cost-based framework, allowing companies to recover investments more quickly and with greater certainty. The goal is simple: get steel in the ground faster.

For years, operators such as Amprion and E.ON have argued that the current rules reward caution over speed. Projects drag on, approvals stack up, and the grid struggles to keep pace with the rapid growth of wind, solar, and electric vehicles. Under the proposed model, planners would have a clearer path to fund and execute large upgrades.

Germany’s challenge is immense. By 2045, the country expects to invest about €450 billion in its electricity network. The money would flow into new high-voltage lines, digital substations, battery storage, and control systems needed to balance a power mix dominated by renewables.

The shift is also being watched closely by equipment makers. Firms like Siemens Energy and Hitachi Energy stand to benefit from a wave of grid modernization, supplying the hardware and software that make a flexible, resilient network possible.

Supporters say the reform is overdue. Without it, bottlenecks could worsen, delaying renewable projects and raising costs elsewhere in the system. E.ON has warned that smart grids and storage cannot scale without predictable cost recovery.

Skeptics, however, see risks. Smaller utilities and some lawmakers worry that dropping performance incentives could weaken cost discipline and push higher bills onto consumers. The regulator has acknowledged these concerns and is considering safeguards to keep spending in check.

The consultation closed in April, with a final decision expected before the end of the year. If approved, Germany’s approach could ripple across Europe, offering a new blueprint for building the grids a low-carbon future demands.

Germany is not easing into this transition. It is choosing speed, and accepting the trade-offs that come with it.