NEST Decisions Set New Course For German Electricity And Gas Network Regulation

Background:

Germany's framework for regulating electricity and gas networks is entering a new phase. On 10 December 2025, the Federal Network Agency (Bundesnetzagentur) ("BNetzA") adopted the first framework and methodological determinations under the so‑called NEST process (Netze. Effizient. Sicher. Transformiert.).

These determinations fundamentally reshape how network costs, revenues and efficiency incentives are regulated. They replace large parts of the long‑standing ordinance‑based regime – in particular the Incentive Regulation Ordinance (Anreizregulierungsverordnung) ("ARegV") and the Electricity and Gas Network Tariff Ordinances ("StromNEV" and "GasNEV") – with binding regulatory decisions issued directly by the independent regulator.