ECJ ruling: Self-consumption facilities lose special status - relevance for energy suppliers and companies in particular

With the ruling of the European Court of Justice (ECJ, ref. C-293/23) of November 28, 2024, the German energy industry is facing far-reaching changes. The previous special regulation for self-consumption facilities (Art. 3 No. 24a EnWG (German Energy Industry Act)) was declared to be contrary to EU law.

The ruling particularly affects energy suppliers and companies that rely on decentralized energy solutions, such as operators of landlord-to-tenant electricity supply projects or industrial parks with their own energy infrastructure. These are now facing considerable regulatory and economic adjustments.

Why is the ruling so relevant for companies and energy suppliers?

1. Loss of significance of the self-consumption facility privilege

Until now, self-consumption facilities were considered an exception to the obligations of regulated distribution grids. They were not only exempt from regulatory requirements, but were also economically attractive due to the exemption from grid fees. The ECJ has overturned this special status – with considerable consequences:

• Facilities transmitting electricity to third parties will in future be considered distribution grids and must be regulated.
• Operators of such systems, often companies or municipal utilities, are faced with new requirements and risks.

2. Threat to existing business models

Many decentralized supply concepts - from landlord-to-tenant electricity supply projects to industrial self-supply grids – are based on customer system regulation. The decision could:

• devalue investments, as the previous profitability is jeopardized by additional obligations and the loss of benefits.
• massively impair planning security for future projects.

3. Competition and market structure

Energy suppliers must prepare themselves for tougher competition:

• System operators who were previously not considered grid operators could now be treated as such. 
• The obligation to non-discriminatory access by third parties opens up new market opportunities, but also harbors potential for conflict.

What exactly has the ECJ decided?

The ECJ clarifies: National special regulations such as the German self-consumption facility privilege are incompatible with the requirements of Directive (EU) 2019/944. Self-consumption facilities that were previously not considered regulated distribution systems are now subject to the same obligations as distribution system operators. The following points from the ruling are of particular importance:

• Definition of the distribution grid: Only the voltage level and the type of customer are relevant, not criteria such as grid size or specific use.
• Restriction of national exemptions: Only the exceptions expressly provided for by the EU Directive, such as closed distribution systems or citizen energy communities, are permitted.
• Obligations for grid operators: System operators who transmit electricity to third parties will have to meet regulatory requirements in future.

Initial assessment of the effects

The decision could significantly reduce the previous economic advantages of self-consumption facilities, in particular the exemption from grid fees. Existing and planned decentralized supply concepts are now under scrutiny. Open questions concern:

• Scope of the ruling: Does it also apply to self-consumption facilities for self-supply (Art. 3 No. 24b EnWG)?
• Exemptions: Can specific facilities fall under the rules of the Directive in order to continue to benefit from regulatory relief?
• Sanctions: What are the consequences for operators who leave their systems unchanged?

Specific risks for energy suppliers and companies

1. Regulatory uncertainties: The new classification leads to a need to review all existing and planned installations.
2. Economic burdens: Due to the elimination of grid fee exemptions and higher requirements, existing business models might become unprofitable.
3. Reputational risks: Companies not implementing the new requirements on time risk sanctions and official proceedings.

Urgent need for action – your advantage through proactive advice

As an energy supplier or affected company, you can now prepare for the new general conditions. Our consulting services include:

• Regulatory analysis: Identification of the affected installations and assessment of whether exemptions are possible.
• Strategic adaptation: Development of legally compliant and economically viable supply concepts.
• Project assurance: Support in the planning of new projects and the optimization of existing structures.
• Communication with authorities: Support with procedures and communication with regulatory authorities such as the German Federal Network Agency (BNetzA).

Stay ahead of developments

The judgment not only affects the legal classification of self-consumption facilities, but also has the potential to fundamentally change the market structure of energy supply. As a client, you will benefit from our in-depth expertise and our understanding of the energy sector’s specific requirements.

Contact us now in order to ensure your projects and business models are legally compliant and in order to remain competitive.