Energy Sharing under § 42c EnWG: A legislative milestone, framework conditions and next steps

Energy Sharing refers to the coordinated collective use and generation of electricity within a defined geographical context, using the public grid.

Following the amendment of the Energy Industry Act (EnWG), the new Section 42c, “Joint Use of Electrical Energy from Renewable Energy Generation Plants,” entered into force after approval by the Federal Council (Bundesrat) on 22 December 2025. As a result, distribution system operators will be obligated to enable Energy Sharing within their grid area for eligible participants starting from 1 June 2026.

This gives rise to questions regarding implementation, price design, and potential system impacts. This whitepaper series addresses regulatory foundations, current developments, and implications for the energy system.

Overview of Whitepaper 1:

The framework conditions briefly outlined here regarding the current status of Section 42c are explained in greater detail and evaluated objectively in Whitepaper 1. It provides insights into the following areas:

• Eligible participants
• Contractual design
• Geographical boundaries
• Actors and responsibilities in energy industry processes
• Regulatory uncertainties related to balancing areas
• Allocation keys
• Price design and marketing
• Metering concept
• Incentive schemes

Outlook and next steps:

As part of the research project Scalable Integration of Energy Sharing (SkIES), funded by the Federal Ministry for Economic Affairs and Climate Action, the technical, economic, and regulatory prerequisites for a comprehensive and scalable implementation of Energy Sharing in Germany are being investigated [1]. The aim is to conduct several field trials and develop guidelines for interoperable implementation in order to integrate Energy Sharing into the German energy system in the long term. This whitepaper series is one of the first concrete outputs of the project.

If you have any questions about Energy Sharing or about the implications and opportunities for your company, please feel free to get in touch — we look forward to the exchange!

Content of Whitepaper 1: A Legislative Milestone for Energy Sharing: Framework Conditions and Next Steps

Eligible Participants

The law allows operators of renewable energy plants to share electricity with other final consumers. Eligible participants include natural persons, legal partnerships with legal capacity, and private-law legal entities. The operation of the plant must not primarily serve the commercial activities of the operator. This allows entities to form solely for the purpose of joint energy use, provided they are not professional electricity suppliers. Moreover, plant operators may not share electricity with themselves. Private companies may participate if they qualify as small or medium-sized enterprises (SMEs). Participation by municipal SMEs is explicitly permitted.

Contracts

According to Section 42c, two different types of contracts are required between the plant operator and the consumer: a contract for joint use and an electricity supply contract. The contract for joint use includes the allocation key and the amount of any remuneration. The plant operator is also obligated to inform the consumer that the shared electricity may not fully cover electricity demand at all times, and that additional supply of residual electricity will be necessary.

Use of the Public Grid and Geographical Boundaries

Sharing electricity from renewable sources will be possible from 1 June 2026. Initially, all participating units must be located within the same balancing area of a distribution system operator. As of 1 June 2028, the geographical scope will be expanded, allowing contracts between actors in directly adjacent balancing areas within the same control zone.

Involved Actors and Responsibilities for Energy Industry Processes

For household customers, certain obligations do not apply under Energy Sharing, including the notification requirement under Section 5 EnWG and obligations related to invoice design and electricity labelling. For cooperatively organized arrangements, however, the relevant supplier obligations under energy law remain fully in place.

Responsibility for balancing lies with the plant operators, who may contract professional service providers to fulfill these tasks. Such service providers may also take on responsibilities such as contract administration, billing, plant operation, home energy management system optimization, or integration into flexibility offerings. It is currently unclear whether, and on what basis, a separate grid usage contract for the allocated electricity volumes must or can be concluded, and how the resulting grid charges, levies, and surcharges should be settled.

Allocation Keys

For the accounting assignment of electricity volumes in Energy Sharing, a clearly defined allocation key, either static or dynamic, is required that determines the distribution of energy produced in each 15‑minute interval. Static methods rely on fixed, unchanging shares. Unused shares cannot be reallocated within the interval, which systematically results in surpluses. Dynamic methods distribute the generated electricity proportionally to simultaneous consumption shares, maximizing the use of locally generated energy, though participants with high simultaneous loads benefit disproportionately.

Price Design and Marketing Logic

Electricity may be provided with or without remuneration; however, the obligation to pay all applicable taxes, levies, surcharges, and potentially grid charges remains unaffected. The shared electricity volumes are classified as “other direct marketing,” as they are delivered directly to final consumers outside the Renewable Energy Act (EEG) remuneration scheme. Residual electricity volumes must be assigned to another form of marketing, typically the market premium model or the fixed feed-in tariff.

Metering Concept

Accounting must be based on 15‑minute intervals to allow precise allocation of generation and consumption. Under the current legal framework, it is not defined which actor merges the generation and consumption time series and allocates energy volumes accordingly, nor which actor is entitled to access which data. As a result, the practical implementation of Energy Sharing under Section 42c is, from today’s perspective, not yet feasible.

Incentive Schemes

Section 42c EnWG does not include a financial incentive system for Energy Sharing. Unlike in other EU countries such as Austria or Italy, taxes, levies, surcharges, and grid charges apply fully to shared electricity. Consequently, it remains unclear to what extent Energy Sharing will be economically attractive and scalable.

Conclusion

With Section 42c EnWG, a legal framework has been created for the first time that enables collective electricity use via the public grid, thereby implementing key EU requirements. At the same time, geographical limitations to balancing areas, unresolved metering and data process design, and the absence of financial incentives lead to significant practical uncertainties. Additionally, the regulatory situation concerning residual electricity marketing and grid usage shows that the economic conditions for Energy Sharing are currently not competitive.

Energy Sharing is legally possible, but technically, organizationally, and economically only partially feasible at this stage. For successful introduction in June 2026, further clarification, particularly regarding metering concepts, market communication, grid access, and role allocation, is necessary. Only with a consistent, practical regulatory framework can Energy Sharing fully realize its potential for participation and increased self-consumption.

The project SkIES aims at answering all the open questions. This whitepaper series is a first step in that direction. Please reach out if you have questions regarding energy sharing, the implementation in Germany, or the possible consequences and opportunities for your company.

Literature

[1] FfE, ” „SkIES – Skalierbare Integration von EnergySharing,“ ffe.de/projekte/skies-skalierbare-integration-von-energy-sharing/,” 2025.
[2] Deutscher Bundestag, Drucksache 21/2793 Beschlussempfehlung und Bericht des Ausschusses für Wirtschaft und Energie (9. Ausschuss) zu dem Gesetzentwurf der Bundesregierung – vom 12. November 2025 -https://dserver.bundestag.de/btd/21/027/2102793.pdf, 2025.

Weitere Informationen

• Energy Sharing: Use Cases aus dem Projekt SkIES
• Scalable Integration of Energy Sharing