Core Viewpoint - The German Federal Network Agency (BNetzA) is reforming the electricity transmission and distribution pricing framework (AgNes) to address issues arising from the energy transition and to comply with EU regulations, with the final framework expected to be implemented by 2029 [1][2]. Background of the Reform - The reform is a response to a 2021 EU court ruling that mandated independent regulatory bodies to set grid charging standards, ensuring market neutrality and regulatory independence [2]. - The energy transition in Germany has altered the operational logic of the electricity system, necessitating a new regulatory framework to resolve existing conflicts [2]. Current Issues in the Pricing Mechanism - The number of full-paying users is decreasing, leading to rising transmission and distribution prices, as the current mechanism places the entire cost burden on end-users while exempting power sources from grid connection fees [3]. - The influx of distributed solar and wind energy has reduced reliance on high-voltage electricity, distorting the cost-sharing structure and increasing high-voltage prices [4]. - The lack of incentives for flexible electricity usage and the absence of time-based pricing mechanisms hinder demand-side response and the development of flexible resources like energy storage [4]. Key Directions and Points of the Reform - The AgNes framework emphasizes cost orientation, feasibility, financial allocation, and incentive functions as its four basic principles [5]. - A new mechanism for cost-sharing from the generation side is proposed, which includes three options for sharing grid costs, potentially amounting to €16.5 billion annually [6]. - The reform advocates for a shift towards capacity-based pricing, which would more accurately reflect the costs of grid construction and maintenance [7]. - The introduction of dynamic pricing mechanisms is suggested to better manage grid loads and encourage users to adjust their consumption patterns [8]. - The reform aims to unify regional transmission prices to enhance fairness and transparency, while balancing regional equity and dynamic pricing feasibility [8]. Implications for Energy Storage and Distributed Energy - The reform plans to clarify the cost-sharing responsibilities of energy storage facilities, moving away from a full exemption policy to a model where storage pays for both energy and capacity charges [9]. - The proposal includes simplifying voltage levels and introducing bidirectional cost-sharing to better reflect the realities of distributed energy integration [10]. Insights for Other Markets - The AgNes framework offers valuable lessons for improving transmission and distribution pricing mechanisms in other countries, particularly in terms of fair cost-sharing and incentivizing efficient energy use [11]. - Emphasizing capacity and load-based pricing can help address issues of uneven peak loads and high capacity usage among certain users [12]. - The need for a refined cost-sharing mechanism that adapts to changing grid flow patterns is highlighted, suggesting a focus on marginal costs at different network nodes [12].