Germany’s outdated grid planning risks nearly $74B in unnecessary costs: Study

Germany’s outdated electricity grid planning could result in €66 billion ($73.8 billion) in avoidable expansion costs by 2045, according to a study by think tank Agora Energiewende.

The Berlin-based organization said expanding the country’s electricity distribution networks would cost around €250 billion ($279 billion) if operators continue planning and building as they have in the past.

Modernizing operations and incorporating innovative measures into expansion plans could reduce that bill by more than a quarter, while easing existing grid bottlenecks, it said in a statement.

The study found that operators largely overlook the potential of flexible electricity demand from heat pumps, electric vehicles and storage systems.

It urged the German government and the Federal Network Agency to adapt regulations so operators can reliably incorporate cheaper alternatives into their planning.

Options include price signals reflecting local grid usage, storage systems that cover peak demand and targeted measures to relieve pressure on networks during emergencies.

Julia Blasius, director of Agora Energiewende Deutschland, warned that slowing the energy transition would fail to resolve the underlying challenges.

“Delaying grid expansion by slowing down the energy transition, as is currently being discussed, only postpones the challenges,” she said.

The greatest need for expansion is expected from the mid-2030s onward, driven primarily by rising electricity demand from electric vehicles, heat pumps, industry and commerce, the statement said.

Agora estimated that the proposed measures could generate annual savings of at least €2 billion from 2030 and €5 billion from 2035. By comparison, Germany’s government spent €6.5 billion on reducing grid fees in 2026.