In January 2025, the Federal Network Agency presented a draft for changes to the Incentive Regulation Ordinance. In an analysis, the EWI and the Öko-Institut are investigating how these planned adjustments could affect existing disincentives in grid operation.
In the current regulatory framework, innovative, operating cost-intensive solutions are often not sufficiently incentivized. Capital-intensive grid expansion measures are more attractive for grid operators due to various distorting incentives. For example, there is a delay in recognizing ongoing operating costs within the revenue cap. The methodology in the efficiency comparison and the higher remuneration of capital costs through equity interest also lead to incentive distortions. Expenditure on research and development outside of funded projects is not recognized in the revenue cap for grid operators set by the Federal Network Agency, which could result in insufficient research and development from a system perspective.
The analysis concludes that the planned adjustments by the Federal Network Agency could help reduce individual disincentives, but not completely eliminate them. These adjustments include, for example, a planned sub-periodic reconciliation of operating costs from 2029 and a shorter regulatory period for distribution system operators from 2034. These changes would result in the development of operating costs being considered earlier in the revenue cap.