Brief overview:
The EEG 2027 introduces a Refinancing contribution as implementation of the two-sided difference contract (CfD) – without a system break, but with significant changes for operators of subsidized plants from 100 kW.
- The previous state aid approval for the EEG 2023 expires on December 31, 2026 Without new EU approval, no new EEG subsidies will be permitted as of January 1, 2027.
- The planned entry into force of the German EEG 2027 is the January 1, 2027 – an ambitious timeline, which depends on EU state aid approval.
- System operators should now understand how the refinancing contribution works and what changes compared to today's market premium.
Background: Why is the EEG 2027 coming into effect?
Whoever the contribution of 2023 to EU-Differential Contracts and the End of Market Premiums who has read it knows the European starting position. The EU electricity market reform 2024 stipulates in Art. 19d of the EU Electricity Internal Market Regulation (EBM-VO) bindingly that Member States must, for direct price support schemes – such as the German EEG – at the latest from July 17, 2027 introduce Contracts for Differences (CfDs) or equivalent instruments.
At the same time, the EU state aid approval for the EEG 2023 is running for December 31, 2026 Two independent deadlines are thus creating significant pressure to act on the German legislator. The draft bill for the EEG 2027 (as of: April 21, 2026) is available, and a working draft was already known in January 2026. In parallel, the Network packet, which aims to synchronize the expansion of facilities with grid expansion, with its own draft law (as of April 17, 2026).
From the CfD concept to the refinancing contribution: Which option did Germany choose?
The EU directive states: two-sided difference contracts – but how exactly these should look is left open by the EBM-VO. In the paper “Electricity Market Design of the Future” (August 2024), the BMWK outlined four fundamental action options:
Options in the BMWK Concept Paper
Option 1 would have largely retained the existing sliding market premium model and supplemented it with a repayment mechanism with market value corridors. The collection of high market revenues would therefore only have started when certain thresholds were exceeded.
For Option 2 – and thus the now chosen solution – the legislator has finally decided: a production-dependent, two-sided differential contract without market value corridors. If the annual market value exceeds the reference value, the difference is immediately skimmed off. There is no dampening corridor logic.
The Options 3 and 4 instead, proposed production-independent models. In this case, the remuneration would not have been tied to the actual amount of electricity generated, but rather to installed capacity or the provision of capacities, for example. In the meantime, hybrid models that combine production-dependent and production-independent elements have also been discussed.
Why was option 2 chosen?
The central reason is the System Continuity. The existing EEG subsidy system is entirely based on the sliding market premium and thus on production-dependent payments. A shift to a production-independent model would have meant a fundamental system change – with significant implications for existing and planned projects.
Option 2, on the other hand, directly builds on the well-known market premium model and merely supplements it with a Repayment component upwards. For plant operators, the basic logic remains the same: nothing changes during low-price phases. Only when the annual market value exceeds the reference value determined in the tender procedure is the difference repaid.
The Refinancing Contribution as a German CfD Implementation
Exactly at this point, the European CfD concept connects with the German EEG system: The Refinancing contribution is the legal mechanism by which the repayment component of the two-sided CfD is implemented.
The RB integrates the CfD concept into the existing support system without fundamentally restructuring it. At the same time, it limits additional revenues during high-price phases: system operators can then no longer profit from exceptionally high electricity prices without limit. The resulting revenues flow into the EEG account and contribute to the financing of the overall system.
How does the refinancing contribution (RB) work?
According to § 20a of the EEG draft, the refinancing contribution is to be the centerpiece of the EEG 2027. It replaces the previously missing upper limit with a genuine two-sided mechanism – production-dependent, as required by the EBM regulation.
Who pays whom?
Operators of facilities that are subsidized under the market premium and have an installed capacity of at least 100 kW have, pay the refinancing contribution to the Network operator. Biomass plants are generally excluded, with one important exception: biogas from sewage treatment plants and landfills remains included.
When is the RB due?
The refinancing contribution only arises in years where the Technology-specific annual market value above the assumed value is located (§ 23a in conjunction with Appendix 1 of the EEG draft). It is calculated as follows:
RB = Annual Market Value (JW) - Assessed Value (AW)
No more market value corridor model – the previous damping is completely eliminated. The RB falls for Each kilowatt-hour generated and fed in including cached current.
Adjusted RB at low spot market prices
For quarter-hour periods where the spot market price is very low, a adjusted refinancing contribution:
RB (adjusted) = Spot market price – Minimum revenue
This applies if the spot market price is less than or equal to RB + minimum revenue. The minimum revenue is:
- 1.5 ct/kWh for offshore wind power
- 0.5 ct/kWh for solar systems
- 1.0 ct/kWh for other systems
The goal of this so-called „dynamic charge” is to provide incentives to generate and feed electricity into the grid even at slightly positive prices. Important: Neither the regular feed-in tariff nor the adjusted feed-in tariff can take on a negative value – therefore, plant operators will not be additionally charged for feeding in electricity during hours with negative prices.
Exit & Switch: What changes for direct marketers?
A one-time exit from the system is possible. Operators can absorb the levy through the refinancing contribution leave once – however, only until the end of the 10th calendar year (§ 20b EEG draft). If this has not happened by then, the mechanism will apply without restriction for the remaining funding period. Re-entry will then no longer be possible.
A switch between subsidized direct marketing (with market premium) and other direct marketing will generally also remain possible. However, the new aspect is: The obligation to pay the refinancing contribution also applies to other direct marketing activities. (§ 21a (2) EEG draft). Therefore, anyone who switches out of subsidized direct marketing during high-price phases to avoid levies will still be captured in the future. This new regulation closes a significant gap in the previous system.
Due Date & Set-off: Practical Execution
In accordance with § 26 of the EEG draft, the plant operator's claim to the market premium (§ 19 para. 1) becomes due as soon as they have fulfilled their data obligations under § 71 para. 1. The grid operator's claim to the refinancing contribution (§ 20a para. 3) becomes four weeks after receipt of the final statement due from the network operator. The previous system of monthly installments with an annual statement will be completely eliminated. This is a significant simplification of the process.
According to § 27 of the draft EEG, grid operators can offset their claims to the refinancing contribution (§ 20a para. 3) against the facility operator's market premium claims. offset. They may also offset their claims if the allocation debtor is also the plant operator. This considerably simplifies practical processing.
Future evaluations for impacts on intraday and other markets
The EEG 2027 contains an important safeguard clause: The BMWE (Federal Ministry for Economic Affairs and Energy) is obliged, by July 31, 2029 to evaluate (§ 99a EEG draft),
- whether and to what extent the new market premium system with refinancing contribution affects market prices on markets other than the spot market, in particular on Intraday markets weakens,
- what effects this has on the overall economically efficient functioning of electricity markets, including the EU internal electricity market.
If significant interactions and substantial impairments are identified, the BMWE must submit legislative adjustment proposals, which must be submitted at the latest Starting January 1, 2031 take effect.
EU State Aid Law: The Critical Factor for the Timeline
The state of play regarding state aid law
The EU state aid approval for the EEG 2023 expires on December 31, 2026. New or significantly changed funding regulations – such as the introduction of a CfD mechanism – are subject to state aid approval (§ 102 EEG draft). The funding rules of the EEG 2027 may only be applied after EU approval.
What happens without new approval? The EEG 2023 itself contains no time limit and is generally valid. However, from January 1, 2027 no new EEG subsidies more permissible, as the prohibition on implementing aid law from Art. 108 para. 3 sentence 3 TFEU applies directly – administrative bodies and courts are bound by it, and the EU Commission can take interim measures in case of violation.
How long does the approval process take?
The processes are complex and include preliminary contacts (pre-notification), formal notifications, and reviews by the EU Commission with coordination rounds. Only after this is followed by the compatibility decision. However, the national legislative process (cabinet, Bundestag, Bundesrat) can be initiated in parallel. Only when both are completed will the new funding schemes commence.
Based on experience, Germany is in the European midfield regarding the duration of approval processes. Typical timeframes are between 6 months or 2 years and longer. The EEG amendments of 2021 and 2023 each took approximately 10 months, and the Solar package I is, for example, still not fully valid after 2 years. The Solar peak law has been in implementation for almost 1 1/2 years.
For comparison: CfD systems in other EU member states were approved in approximately 2 months (Poland), approximately 9 months (Greece), approximately 12 months (Denmark), and approximately 16 months (Italy). The duration strongly depends on the design of the support scheme and the national procedural situation.
Comparison with EU requirements from Art. 19d EBM-VO: Where does the current EEG draft stand?
Art. 19d EBM-VO defines when the CfD obligation applies to which technologies and projects and which exceptions are possible. A direct comparison with the EEG 2027 draft shows:
Market integration? The EBM Regulation requires incentives for efficient operation and market participation without distorting effects. The EEG draft no longer contains market value corridors, has an adjusted feed-in tariff for low-price phases, and is currently focused solely on the day-ahead market – whether that is enough remains to be seen. The obligation to evaluate by 2029 is designed in response to potential EU concerns. Assessment: questionable.
What facilities? The EBM Ordinance covers wind, solar, geothermal, hydropower without storage, and nuclear power – with a possible exemption for small plants under 200 kW. The EEG draft covers all renewable energies from 100 kW upwards, except for biomass (with the exception of sewage and landfill gas). This is wider than legally required by the EU – in the evaluation Positive.
Tender? The EBM Ordinance fundamentally calls for tenders. The EEG draft retains the existing tender obligation (§ 22 EEG draft). Assessment: Positive.
Use of revenue? The EBM Ordinance permits use for end customers, funding, or investments to reduce costs. The EEG draft provides for the EEG account (§ 14 sentence 1 no. 4 EEG draft). Evaluation: Positive.
Penalty clause? The EBM ordinance mandates penalty clauses for premature unilateral termination. In the EEG draft, regarding this, No regulation provided. Rating: not fulfilled.
Critical points in the EU state aid procedure for the EEG 2027
The Foundation for Environmental Energy Law identifies three central problem areas that are likely to become relevant in the EU procedure:
1. Production-dependent vs. production-independent
The EU Commission, in its guidelines for the design of two-sided contracts for difference (CfDs) (of December 19, 2025), emphasizes that production-dependent CfDs can create distorted incentives (“produce and forget”). The Commission prefers production-independent or “merged” CfD models. The guidelines state: “Most of these problems are solved by generation-independent two-sided CfDs.” However, the current draft of EEG-2027 relies on production-dependent levies – a potential point of discussion.
2. Day-Ahead Focus
The refinancing contribution refers to the technology-specific annual market value, based on day-ahead prices. Whether the associated exclusion of intraday and other markets meets EU requirements is unclear, hence the obligation for evaluation.
3. Missing regulations for penalty clauses
Art. 19d EBM-VO explicitly requires penalty clauses for early unilateral termination. The EEG draft does not contain these. This is the only clear formal deficiency in complying with the EU requirements.
Preliminary Conclusion: Minimally Invasive – but not without Risks
The Foundation for Environmental Energy Law notes that the EEG 2027 draft attempts to implement the EU requirements with as few interventions as possible. Their assessment is therefore more nuanced:
The Refinancing contribution builds upon the existing system. and represents a minimally invasive implementation of the CfD concept. There is no fundamental system break – the market premium remains, but it is supplemented by the repayment mechanism in high-price phases.
The However, the requirements from Art. 19d EBM-VO are not fully metThe lack of a penalty clause is a clear deficiency. Whether the production-dependent design and the day-ahead focus meet the EU requirements will be shown by the state aid procedure.
The Time pressure due to the expiration of the subsidy approval is real as of December 31, 2026. The concrete duration of the EU approval process depends on preliminary contacts, further substantive changes, and the scope of the notification procedure. For plant operators and project developers, this means: planning security only once the approval is granted.
What does this mean for operators of subsidized renewable energy systems?
Existing plants currently subsidized through the sliding market premium should keep the following points in mind:
- From 100 kW and market premium subsidiesThe refinancing contribution applies in years with annual market values above the creditable value – so the high-price phases of recent years (2021–2023) would have already led to payment obligations.
- No more monthly installmentsBilling will be done via the grid operator's year-end statement, due four weeks thereafter.
- Re-evaluate exchange strategyThe transition to other direct marketing is no longer automatically exempt from levies.
- One-time exitThe opt-out from the deduction is possible once, but must be declared by the end of the 10th calendar year.
- New ProjectsThe entry into force of the EEG 2027 is dependent on EU state aid approval. Until then, the EEG 2023 will continue to apply for ongoing subsidies – however, new subsidies from January 1, 2027, will only be possible with new approval.
Sources
This post is based on the initial draft of the EEG 2027 (as of April 21, 2026), the working draft (as of January 22, 2026), and information from the Stiftung Umweltenergierecht (Environmental Energy Law Foundation). For the Würzburg Study No. 40 by the Stiftung Umweltenergierecht (November 2025) on the EU legal leeway in the EEG reform, please refer to the original source. The EEG 2027 is still in the legislative process – all information refers to the current draft status and may change.