Key demands for concession awards in the area of energy

The award of concessions for electricity and gas grids is becoming ever more complex and is increasingly subject to the scrutiny of the courts. Together with the law firm Becker Büttner Held (BBH) and the energy industry consultancy Büro für Energiewirtschaft und technische Planung GmbH (BET), the German Association of Towns and Municipalities (DStGB) thus launched a position paper addressed to the new Federal Government identifying areas where legislation needs to be amended.

The award of energy concessions is legally complex, ties up considerable manpower in the cities, towns and municipalities and is frequently the subject of lengthy court disputes. As a consequence, the revenue generated from the concessions to use municipal roads, paths and spaces for energy supply lines is by now hardly ever proportionate to the effort involved in terms of a cost-benefit ratio. Furthermore, the legal uncertainty in the context of grid takeovers discourages the necessary investments into modern energy grids. The grids are, however, of central importance to achieve the energy transition and ensure climate protection. In terms of energy policy at local level, they play a vital role in the coupling of the electricity, heat and transport sectors, which reduces carbon emissions and thus helps protect the environment.

To allow municipalities to shape their local energy policy in the best possible way, the position paper “Kernforderungen bei der Konzessionsvergabe im Energiebereich” proposes amendments in regard to the following aspects:

Concession award procedures should be simplified. In many cities and towns, and particularly in smaller municipalities, there is a great disproportion between the costs and effort involved in concession award procedures and the revenue from concession fees. Moreover, the authors suggest an acceleration of grid takeovers so as to avoid year-long delays due to disputes over the grid purchase price. To avert a fragmentation of case law regarding concession awards, another proposal is to apply the review procedure under procurement-related antitrust law before the public procurement tribunals in the future. And last but not least, a reform of concession awards in the area of energy would also have to include legally certain provisions for hydrogen grids.

The German Association of Towns and Municipalities adopted the position paper in its board meeting on 15 November 2021.

Becker Büttner Held is a leading provider of advisory services for energy and infrastructure companies and their customers. Energy and supply companies, particularly public utilities, municipalities and local authorities, industrial companies and international groups are among its core clients. BBH advises these and many other companies and organisations in all legal matters and also assists them with business and strategic advice.

Prof. Dr. Ines Zenke                                                  
Lawyer (Rechtsanwältin), Partner
Phone +49 (0)30 611 28 40 - 179                                                             

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