German Federal Court of Justice: Special status of self-consumption facilities practically abolished

Following the European Court of Justice (ECJ)'s ruling of November 28, 2024 (C-293/23 – “ENGIE”), which widely opened the door to a new interpretation of the term “self-consumption facility,” the BGH has now followed suit in its published grounds for the decision – with significant implications for all companies that have relied on a privileged electricity supply in the form of a self-consumption facility.

Although the direction of the ECJ ruling had been known for months, only the Federal Court of Justice's current reasoning (decision of May 13, 2024, ref. EnVR 83/20) has made it clear how strictly these requirements are to be applied in national practice. The Federal Court of Justice thus expressly aligns itself with the understanding under European law and clearly rejects a broad interpretation of the term “self-consumption facility.”

What exactly is changing?

The grounds for the ruling clearly show that many supply models that were previously classified as self-consumption facilities now fall under the definition of “distribution network” and cannot be exempted from regulation.

The decisive criterion was the transmission of high, medium, or low-voltage electricity intended for sale to wholesalers or end customers. A self-consumption facility only existed if the line systems were used to transmit electricity that is not intended for sale.

The consequences: 

• The scope of application of the self-consumption facility privilege is significantly restricted.
• It is no longer the technical details or ownership structure that matter, but rather the actual use of the line system to supply third parties for the purpose of sale.
• Even small, internal supply structures lose their privileged status.
• Numerous existing or planned energy projects must be reevaluated in regulatory terms.

Industrial companies, neighborhood developers, and contractors in particular, who have previously relied on simple self-consumption facility models, must now assume that they will be forced into the role of network operators – with all associated regulatory obligations (unbundling, network access, fee regulation, reporting requirements, etc.). 

Relevance for practice: Planning principles are faltering

The practical implications are considerable: many projects were designed on the premise that internal line networks are self-consumption facilities. Such basis no longer applies. This results in new requirements for:

• The project structure (e.g., establishment of own network companies)
• Approval and registration procedures
• Business calculations and contract design

Municipal utilities, contractors, and project developers who have previously implemented flexible decentralized energy supply models based on self-consumption facility models are coming under particular pressure. The economic viability of such models now needs to be reassessed in many cases. 

Conclusion: Now is the time to act

With the publication of the Federal Court of Justice's reasoning, it is clear that the legal scope for self-consumption facility-based supply concepts will be significantly restricted. Anyone currently planning projects or already operating facilities must quickly check whether the chosen model is still viable – or whether regulatory obligations apply that have not been taken into account before.

We are happy to advise you

We support you in the legal and strategic evaluation of your projects, review existing structures, and help you develop viable models taking new case law into account. Feel free to contact us – we will advise you personally, in a solution-oriented manner, and with a focus on your business goals.