Waiting until 2032? Why grid connection is becoming the biggest risk for Germany as a business location.

Red alert for network operators: The invisible brake on industry and the economy

A failure with long-term consequences: When the grid connection bottleneck began with the first solar parks – and is now stifling AI and industry.

While record amounts of solar and wind power are being installed on roofs and fields, the economic engine of the transformation is in danger of stalling. The reason is no longer a lack of green electricity, but rather the process of generating it.

For a long time, grid connection was considered a purely technical administrative act – a form, a permit, a cable. But those days are over. Today, access to the electricity grid has become a central bottleneck for the German economy. What was once a routine matter for municipal utilities is now a strategic risk that determines billions in investments and the future viability of entire industrial sites.

Companies aiming to decarbonize their production, data centers intended to form the backbone of the AI ​​revolution, and developers of urgently needed large-scale storage facilities are all hitting an invisible wall. Waiting times of up to ten years for a high-performance connection are no longer uncommon. The reasons for this are more complex than just a missing cable: it's a toxic mix of a global shortage of transformers, outdated administrative processes, and a flood of speculative "ghost projects" that tie up capacity on paper without ever actually existing.

The following article takes an unflinching look at the "inventory of the reality of Germany's energy transition." It analyzes how the historically one-way grid is buckling under the new burden of volatile feed-in and a gigantic hunger for data. It sheds light on the distribution battles raging behind the scenes and shows why we must abandon the idea of ​​unlimited availability. It's about nothing less than the question: Who gets access to the grid when the lines are overloaded – and how do we prevent the infrastructure from stifling economic growth?

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The invisible brake: Why the grid connection is becoming the bottleneck of the transformation

Germany is currently experiencing a paradox of the energy transition. While record expansions in photovoltaics and wind power are being celebrated on the generation side, and industry is poised to decarbonize its processes, a massive gap is emerging at the interface between the plant and the grid. Grid connection, formerly a purely technical administrative act, has become one of the most critical bottlenecks for economic development. It's no longer just about the solar park on a greenfield site that isn't allowed to feed into the grid. Rather, we are witnessing a situation in which industrial developments, the expansion of data centers for AI infrastructure, and the urgently needed large-scale storage facilities are all bogged down in a gigantic bureaucratic backlog.

The relevance of this issue can hardly be overstated. If a medium-sized company wants to switch its production from gas to electricity but is put off by the grid operator until 2032, this effectively amounts to an investment freeze. If international data center operators avoid locations like Frankfurt or Berlin because guaranteed capacity is unavailable, the competitive disadvantage becomes measurable.

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From a one-way street network to a volatile load: The history of an overload

To understand today's predicament, one must examine the architecture of the German electricity grid as it has evolved over decades. The historical grid was a one-way street: a few hundred large power plants fed into the grid at the highest voltage level, and the electricity cascaded down through the high and medium voltage levels to the low voltage level for end consumers. The capacities were designed for the maximum load of consumers, with a comfortable safety buffer. Feeding in electricity at the lower voltage levels was simply not part of the system design.

The Renewable Energy Sources Act (EEG) over 20 years ago marked the beginning of the inversion of this system. Suddenly, thousands, and later millions, of installations were feeding electricity into the grid from a decentralized perspective. For a long time, the fiction of the "copper plate" was maintained politically and regulatoryly – the assumption that electricity can physically flow from point A to point B without limit, as long as it exists in the energy balance. This led to a decoupling of generation expansion and grid expansion planning. While solar panels can be installed within weeks, grid expansion projects take years or even decades.

A decisive turning point was the massive scaling of projects over the last five years. Where once there were small rooftop installations, now gigantic ground-mounted systems, electrolyzers, and fast-charging parks are vying for grid connection. The request for grid connection, legally enshrined in the Renewable Energy Sources Act (EEG) and the Energy Industry Act (EnWG), has become a mass phenomenon. The grid operators, often municipal utilities or regional suppliers, were overwhelmed by this wave without their personnel or administrative structures growing accordingly. The roots of today's crisis thus lie in an asynchronous pace: an exponentially growing project pipeline is colliding with a linearly and slowly expanding infrastructure.

Technical bottlenecks and the "paperwork war": The anatomy of the application backlog

When people talk about a "missing grid connection" today, they're usually not referring to the lack of a cable itself, but rather to the capacity of the network nodes. The critical bottleneck is often the transformer, especially at the interface between high and medium voltage (substations). A transformer is the core component that couples the voltage levels. These gigantic components currently have delivery times of 24 to 36 months, sometimes even longer. Even if a grid operator wants to expand immediately, they often fail due to the physical availability of the hardware on the global market.

In addition, there is the administrative process, the grid compatibility assessment (GCA). For every project above a certain size, the grid operator must simulate what happens when the plant feeds into the grid or draws power at full load. They must check whether the voltage remains within tolerance and whether the equipment is thermally overloaded. In the past, this was often done manually by engineers. With today's flood of applications, this manual process has collapsed.

Another often underestimated mechanism is the reservation practice. A project developer submits a request, receives a capacity reservation, and thereby blocks it for others. If this project is delayed or even abandoned, the capacity remains tied up. This leads to a kind of "shadow accounting" on the grid: On paper, the grid is full, but physically, often no electricity is flowing. This discrepancy between contractually reserved and actually used capacity is one of the main administrative reasons for the rejection notices investors receive today.

Data hunger and storage boom: The new drivers of network scarcity

While wind and solar farms were the main competitors for grid connection in the 2010s, the landscape of players changed dramatically in 2024 and 2025. Two new players dominate the waiting lists and intensify the competition for scarce capacity: data centers and battery energy storage systems (BESS).

Digitalization, and especially the boom in artificial intelligence, has caused the energy demands of IT infrastructure to explode. In regions like the Rhine-Main area (Frankfurt) or the greater Berlin area, data center operators are requesting connection capacities in the hundreds of megawatts – dimensions that were previously reserved for aluminum smelters or chemical plants. However, a data center doesn't require this power fluctuating, but rather as a constant bandwidth (bandwidth load), which places a continuous strain on the networks and leaves little room for simultaneity effects. In the Berlin-Brandenburg region alone, the number of applications for data centers far exceeds the available capacity.

The situation is even more dramatic with battery storage. Driven by the volatility of electricity prices and attractive revenue opportunities in arbitrage trading (charging cheaply, selling at a high price), we are experiencing a gold rush. Transmission system operators are inundated with inquiries for battery storage systems with a total capacity of several hundred gigawatts – many times the total German peak load. However, many of these projects are speculative in nature. Project developers are securing grid connection points as a precautionary measure, without finalized financing or land acquisition. These "phantom projects" are clogging the channels for the real economy and causing grid operators to lose track of what demand is real and what exists only on paper.

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Construction site standstill: Real-world examples from industry and project development

To make this abstract problem more tangible, it's worth looking at concrete scenarios that are currently playing out daily in Germany. A striking example can be found in the medium-sized manufacturing sector. A metal processor in North Rhine-Westphalia plans to replace its gas-fired melting furnaces with electric induction furnaces to save on CO2 certificates and meet its customers' ESG criteria. The technology has been ordered, the building planned. However, the local distribution network operator informs them that the upstream substation is operating at full capacity. An increase in capacity of 5 megawatts will only be possible after the high-voltage line has been expanded and the transformers have been replaced – with a projected commissioning date of 2029. For the company, this means that it must either postpone the investment, continue using fossil fuels, or, in the worst-case scenario, relocate production to a site abroad where capacity is available more quickly.

A second example comes from the development of solar parks in rural regions, such as Brandenburg or Mecklenburg-Western Pomerania. A developer has leased land from farmers and convinced the local council. The planning hurdles have been cleared. However, the assigned grid connection point is 15 kilometers away because the nearby substation is already blocked by reserved capacity for other, yet-to-be-built projects. The cost of the 15-kilometer cable route makes the project unprofitable. Meanwhile, the nearby substation is practically empty because the reserved projects will take years to complete. This illustrates the absurdity of the administrative bottleneck: The project is "shovel-ready" but fails due to virtual bottlenecks and the impossibility of agreeing on flexible connection solutions at short notice.

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Distribution conflicts and cost issues: Who gets to go online first?

This scarcity inevitably leads to distributional conflicts and raises fundamental ethical and economic questions. The existing principle of "first-come, first-served" is reaching its limits. Is it economically sound for a speculative battery storage project, which may never be built, to block capacity that a manufacturing company urgently needs to secure its location? Or, conversely: Should data centers take precedence over renewable energies simply because they are financially more powerful?

The debate about prioritization has erupted, but it is legally fraught. The Energy Industry Act stipulates non-discriminatory grid access. A political selection based on "usefulness" would open the floodgates to lawsuits and arbitrary decisions. Nevertheless, industry associations are increasingly demanding priority for value-adding production over purely commercial assets such as storage facilities.

At the same time, the conflict over costs is simmering. The expansion of the grid is passed on to all electricity consumers via grid fees. If new high-voltage power lines now have to be built for huge solar parks or data centers in rural areas, bakers and tenants ultimately pay for this through their electricity bills. The question of cost distribution – whether the polluter (connection customer) should contribute more to the far-reaching infrastructure costs (construction cost subsidies) or whether this remains a responsibility of society as a whole – is one of the major points of contention in the current regulatory debate.

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Flexibility instead of copper plates: Solutions for the network of tomorrow

Looking to the future, it's clear that simply expanding "copper and iron" infrastructure won't win the race against time. We won't be able to expand the grids quickly enough to cover every theoretical peak load at any given time. The solution, therefore, lies in a paradigm shift from "hard" capacity to "soft" flexibility.

The legislator has already taken a first step with Section 14a of the German Energy Industry Act (EnWG). This allows network operators to reduce the electricity consumption of devices such as heat pumps or wallboxes in emergency situations (“peak shaving”). In return, customers receive reduced network charges. This principle will have to be extended to industry and large consumers. Instead of a fixed connection that guarantees full power 24/7 (and thus blocks capacity), we will see “conditional grid connections.” A data center or an electrolyzer may connect to the grid, but must accept that its power will be reduced during the few hours of the year when the grid is operating at its limit.

Digitizing application processes is also a crucial lever. From 2025, network operators will be required to offer digital portals. Uniform data standards and automated grid compatibility checks could end the paperwork. Another important element is streamlining waiting lists. Introducing reservation fees or stricter implementation deadlines (penalties) could remove the flood of speculative requests from the market, immediately freeing up capacity for real projects. Market-based instruments, such as flexibility trading (where someone gives up their slot in exchange for payment), could also reduce inefficiencies.

Grid connection as the hardest currency of the economy

The analysis clearly shows that grid connection has evolved from a technical necessity into a strategic bottleneck. It is now the most valuable asset in the economy – often more valuable than the land or the solar panels themselves. The flood of demand driven by industrial electrification, the AI ​​boom, and the surge in energy storage has impacted a system whose physical and administrative structure remained firmly rooted in the last century.

This is a warning sign for Germany as a business location. If investments fail due to a lack of infrastructure, deindustrialization threatens through the back door. The solution cannot lie solely in building new power lines, however necessary this may be. Rather, what is needed is more intelligent management of scarcity. Transparency regarding available capacity, the removal of speculative blockages, and above all, the courage to adopt flexible connection models are the order of the day. Only when we no longer see the grid as a rigid copper plate, but as a dynamic platform on which generation and consumption are intelligently orchestrated, can the energy transition transform from a hindrance back into an engine of growth. The era of unlimited availability is over; the era of grid intelligence must begin now.

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