Grid connection and grid access for energy plants: how to resolve disputes efficiently (Part 3)

Disputes relating to grid connection and access rights are not uncommon. In Part 3 of our series, we explain how companies and grid operators can efficiently resolve disputes relating to rejections, delays or discrimination - whether in court, at the Federal Network Agency (BNetzA), or via the EEG | KWKG clearing house.

In Part 1 of our three-part series, we provided you with a practical overview of the legal basis for grid connection and access rights, including the peculiarities for renewable energies.

In Part 2 of the series, we considered the grid operators’ perspective and examined in more detail how grid operators can safeguard their technical and economic interests in view of their system responsibility and regulatory obligations.

In this final part of our series, we take a look at the judicial and administrative mechanisms for resolving disputes relating to grid connection and access rights.

Disputes over rejections or delays

Sections 17 and 20 of the German Energy Industry Act (Energiewirtschaftsgesetz, EnWG) guarantee end consumers a right to grid connection and access. Operators of plants for generating electricity from renewable energies have an immediate and priority connection right pursuant to Section 8 of the German Renewable Energy Sources Act (Erneuerbare-Energien-Gesetz, EEG).

Grid operators can only reject this right in exceptional cases, if the grid connection or access is not possible or reasonable for operational, economic or technical reasons.

Since the technical and regulatory circumstances for connecting to the grid are extremely complex, delays are also commonplace. This is especially the case when an extensive expansion of the grid is required to integrate large offshore and onshore wind farms, photovoltaic and combined heat and power plants, electrolysers, electricity storage facilities or decentralised supply concepts. Such rejections or delays can have significant economic consequences for companies.

In practice, end consumers and grid operators regularly dispute over whether the rejection of a grid connection or access request was justified or, above all, who bears the economic responsibility for the delays. These disputes can be settled before the civil courts or at the administrative authorities.

Administrative enforcement

Section 31 EnWG gives individuals and associations whose interests are significantly affected by a grid operator’s conduct the opportunity to initiate so-called special abuse proceedings at the Federal Network Agency (BNetzA) or the competent regulatory authority of the respective federal state. This is particularly relevant in cases where there are doubts as to the legality of a grid operator's conduct – for example, if the grid operator unlawfully refuses the grid connection or access, or is only willing to provide it at discriminatory or unjustified grid charges.

Not only companies that are directly affected are eligible to apply, but also consumer centres and other subsidised consumer associations, provided that a large number of consumers are affected.

The application must contain the following information:

• Name, address, and signature of the applicant
• Company name and registered office of the grid operator concerned
• Description of the conduct to be reviewed
• Specific reasons for doubting the legality
• Explanation of how the applicant is affected

Incomplete applications will be rejected as inadmissible. Upon receipt of an admissible application, the authority examines whether the grid operator's conduct complies with the legal requirements and approved conditions. In the case of measures that require approval, it also examines whether the conditions for revoking the approval are met. The costs of any necessary gathering of evidence may be imposed on the parties involved at the authority's discretion.

The decision is generally made within two months of receipt of the complete application. An extension is possible, especially in complex cases such as the connection of large generation or storage plants. The parties involved are then informed of the outcome of the proceedings in writing or electronically. In particular, the authority can issue binding orders and oblige the grid operator to establish the connection or grant access.

The abuse proceedings under Section 31 EnWG are therefore an effective instrument for resolving disputes with grid operators. The proceedings are also often faster and less costly than court proceedings and offer the additional advantage that the authority has technical and regulatory expertise and can take industry-specific characteristics into account.

Judicial enforcement from the customer's perspective

In addition to administrative enforcement, customers can assert their rights to grid connection and access before the ordinary courts. Depending on the circumstances, various types of legal action come into consideration:

For example, the customer can bring an action for performance to establish the grid connection or grant grid access. In particularly urgent cases, for example to avoid economic disadvantages due to delays, a preliminary injunction may also be sought. In addition, an action for injunctive relief may be brought under Section 32 (1) EnWG if an impairment already exists or is imminent, for example in the case of repeated or systematic discrimination in giving access to the grid. Associations with legal capacity are also entitled to bring legal action, which strengthens collective enforcement.

If the grid operator intentionally or negligently violates the relevant regulations and the customer suffers demonstrable economic damage as a result, the end consumer can also file a claim for damages (in particular pursuant to Section 32 (3) EnWG or, in the case of renewable energies, pursuant to Section 13 EEG).

In court proceedings, the customer must demonstrate the prerequisites for the claim, i.e., in particular, the submission of an application to the grid operator and the connectability of the system. However, the full burden of representation and proof of the existence of grounds for a rejection - such as technical impossibility or economic unreasonableness - lies with the grid operator. Case law, in particular the case law of the Federal Court of Justice (BGH) (see, for example, BGH, decision of 23 June 2009, docket no. EnVR 48/08, margin nos. 21, 24), requires substantiated and case-specific reasoning; blanket references to capacity problems or costs are not sufficient.

If a violation of certain EnWG provisions is established in administrative proceedings, this finding is also binding on the civil court pursuant to Section 32 (4) EnWG, which can make it significantly easier to enforce damage claims and prevents divergent decisions on identical factual or legal issues.

In practice, typical areas of conflict arise primarily from insufficiently substantiated or merely blanket rejections, disputes over the appropriateness of conditions and fees, delayed application processing and the targeted discrimination or obstruction of competitors.

EEG | KWKG Clearing House: arbitration in the field of renewable energies

In addition, in the case of renewable energies, the EEG provides for the possibility of appealing to a clearing house, which can settle disputes between grid and plant operators, particularly in the context of arbitration proceedings (Section 81 EEG).

It is operated on behalf of the German Federal Ministry for Economic Affairs and Climate Protection (BMWK) by a legal entity operating under private law (see EEG | KWKG Clearing House) and works closely with the competent authorities to ensure the uniform application of the law and swift legal certainty.

The clearing house deals in particular with disputes relating to key provisions of the EnWG and the EEG (e.g., grid connection, feed-in, metering, direct marketing) and with resulting payment claims. It can act between individual parties (e.g., plant operators, grid operators, metering point operators) and can also clarify fundamental issues in case of a public interest.

The clearing house offers various procedures:

• Arbitration proceedings in accordance with the German Code of Civil Procedure (Zivilprozessordnung, ZPO),
• Other proceedings at the joint application of the parties,
• Statements for courts,
• Proceedings on fundamental law to clarify issues that have broad implications (free of charge).

The proceedings are conducted expeditiously. They are also subject to their own procedural rules, which must be approved by the Federal Ministry. Data protection, trade secrets, supreme court rulings and decisions of the Federal Network Agency must be observed. For most proceedings, the clearing house charges fees to cover its expenses; In contrast, proceedings on fundamental law are free of charge.

The parties' right to appeal to the ordinary courts basically remains unaffected. However, the clearing house also offers a practical opportunity to resolve energy law disputes in a particularly efficient manner and with the involvement of technical expertise – this can sometimes avoid lengthy and costly court proceedings.

Defence options of the grid operator

Grid operators have various defence options. From a substantive law viewpoint, they can argue technical, economic or operational unreasonableness, albeit that the requirements for justification are high and a case-by-case, comprehensible and documented argumentation is required. The rejection already has to be made in text form out-of-court and, upon request, must contain detailed information on expansion measures and their costs.

Grid operators can also argue that certain measures, such as grid expansion, for example, cannot be implemented at short notice or are not covered by the fee regulation. Formally, compliance with the procedural requirements is of central importance, especially the timely and complete justification of the rejection and immediate notification to the regulatory authority. Careful documentation of all technical tests, cost calculations and communication with the customer is essential in order to substantiate one's own position in the event of a dispute.

If these requirements are not met, the grid operator faces not only official orders or court rulings to establish the connection or grant access, but also injunctive relief and damage claims under Section 32 EnWG. The binding effect of official findings on subsequent court proceedings increases the risk of additional civil liability. Furthermore, there are reputational risks and possible regulatory measures.

Conclusion and outlook

The multitude of enforcement options - from civil court action, administrative proceedings at the Federal Network Agency to alternative dispute resolution mechanisms - illustrates how challenging it can be to enforce claims and strike a balance between customer interests and grid operator obligations. It is crucial for all parties involved to ensure careful and substantiated documentation from the outset, to engage in dialogue and exchange as cooperatively as possible, and to involve technical expertise at an early stage. This is the only way to avoid lengthy and costly disputes and achieve a legally secure, fair solution that is in the interests of all market players. In view of the constantly increasing pressure on the grid infrastructure, the importance of efficient and legally secure dispute resolution will continue to grow. We would be pleased to support you from the very outset.

Our series of articles

In Part 1 of our three-part series, we provide companies with a practical overview of the legal basis for their grid connection and access rights, including the peculiarities of renewable energies.

In Part 2, we report from the grid operators’ perspective and examine in more detail how grid operators can safeguard their technical and economic interests in view of their system responsibility and regulatory obligations.

In this Part 3, we then deal with the judicial and administrative mechanisms for settling disputes in connection with grid connection and access rights.

About us

The energy and infrastructure sector group at Oppenhoff combines comprehensive expertise in all areas of law relevant to the energy industry. In addition to its energy law experts, Oppenhoff's interdisciplinary energy team includes specialists in the areas of corporate law/M&A, tax, financing, plant construction, environmental, planning and licensing law, public procurement law, commercial law, antitrust law, IT and data protection law, and litigation.

Oppenhoff's litigation and arbitration team helps to avoid conflicts through careful contract drafting and a clear definition of rights and obligations. If a dispute is unavoidable, the team represents your interests before the state courts and arbitration tribunals – with convincing arguments and individually tailored litigation tactics. The team has already successfully defended several companies against mass individual lawsuits.

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