Industrial Electricity Price and AgNes: Why Flexibility is Now the New Gold

It is now clear: The European Commission has officially approved Germany’s €3.8 billion state aid program through the end of 2028. This marks a significant step forward for the industrial electricity price. The relief is set to apply retroactively starting January 1, 2026, and applications are expected to be accepted starting January 1, 2027. It is therefore crucial for companies not only to wait for the relief but to assess their eligibility, data situation, and potential for flexibility now.

What is the industrial electricity price?

The industrial electricity price is a government support instrument designed to temporarily alleviate the electricity costs of particularly electricity-intensive companies in Germany. The scheme has been approved by the European Commission under state aid rules and is set to apply retroactively starting January 1, 2026. The goal is to provide short-term support to energy-intensive industrial companies, prevent relocations, and ensure their international competitiveness. Simply put: For a portion of industrial electricity consumption, the effective electricity price is to be reduced or subsidized on a calculated basis. However, the relief does not apply across the board to every company, nor does it automatically apply to the entire electricity consumption. Whether a company can benefit depends, among other things, on its industry, primary economic activity, WZ code, electricity consumption, electricity costs, and the final regulatory requirements.

Key aspects of the Industrial Electricity Price:

• Approval: Approved under state aid law on April 16, 2026, case number SA.120495
• Duration: Through the end of 2028
• Effective Date: Retroactive to January 1, 2026
• Application: Expected to be available starting January 1, 2027
• Target price: approximately 5 ct/kWh or 50 €/MWh
• Subsidy amount: Reduction in the electricity price of up to 50% of the reference price
• Reference price: Average of the previous year’s base futures
• Subsidy volume: Expected to be up to 50% of a production facility’s electricity consumption
• Financing: Through the Climate and Transformation Fund

Thus, the industrial electricity price is not a permanent electricity pricing model, but rather a temporary relief measure. This makes the question of how companies can strategically leverage this potential subsidy all the more important.

Which companies can benefit from the industrial electricity rate?

The industrial electricity rate is intended for electricity-intensive companies that face international competition. The decisive factor is not only the level of electricity consumption, but also whether the company’s specific economic activity can be classified as belonging to a relevant sector or subsector.

The KUEBLL list and the WZ code play a central role in this regard.

KUEBLL stands for Climate, Environment, and Energy Aid Guidelines. These European state aid guidelines define the conditions under which countries may support companies in the context of energy and climate policy. You can view the current version of the KUEBLL here (starting on page 80).

In the context of the industrial electricity price, this logic is important because it classifies sectors and subsectors that may be considered particularly energy-intensive, electricity-cost-intensive, and exposed to international competition.

The WZ code describes a company’s economic activity. It is important for assessing the industrial electricity price because eligibility is often tied not only to broad industry categories but also to specific activities.

For example, a company may operate in the metal industry, chemical industry, plastics processing, food industry, or paper industry without automatically being eligible for support. The precise classification is decisive.

Companies should therefore assess the following at an early stage:

• Which WZ code is on file?
• What primary economic activity does it describe?
• Does the specific subsector potentially fall under the relevant EU guidelines?
• What are the current electricity consumption levels and costs?
• What relief measures are already being utilized?
• What investments in decarbonization, efficiency, or flexibility are planned?

What requirements must companies meet?

Funding through the Industrial Electricity Price program is intentionally tied to specific conditions. Companies are expected to use this relief not only to reduce their electricity costs in the short term, but also to invest a portion of it in transformation, decarbonization, and efficiency.

As things stand, companies must reinvest at least 50% of the funding they receive within a specified period.

Possible investments include, for example:

• Decarbonization measures
• Energy efficiency projects
• Electrification measures
• Load management
• Storage
• Smart energy management software
• Measures to increase demand flexibility
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Thus, the Industrial Electricity Price is not merely viewed as a subsidy, but as a potential lever for investment. Companies can use the relief to make their energy infrastructure more flexible and cost-efficient.

The Flexibility Bonus: Why flexibility is becoming particularly relevant

The flexibility bonus is particularly relevant. Companies can receive a 10% increase in the amount of aid if they invest a significant portion of their matching contribution in measures to increase demand flexibility.

The basic logic:

• The flexibility bonus amounts to an additional 10% on top of the subsidy.
• The prerequisite is that at least 80% of the counter-performance obligation or the relevant investment amount is directed toward measures to increase demand flexibility.
• At least 75% of the additional bonus must, in turn, be reinvested in countermeasures or decarbonization measures.
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This makes flexibility not only sensible from an energy economics perspective but also attractive from a funding perspective.

However, it is important to clarify this point: Flexibility measures are not automatically free of charge. The bonus, however, can significantly improve their economic viability and offset a large portion of the costs on paper.

Sample Calculation: Industrial Electricity Prices as a lever for flexibility

The following simplified example illustrates how industrial electricity prices can affect a company with an annual electricity consumption of 10 GWh.

Without subsidies, the electricity costs in this example amount to €900,000.
With the industrial electricity price, they drop to €725,000 —
resulting in a calculated cost savings of €175,000.

However, it is not just the short-term cost reduction that matters. A portion of the subsidy must be reinvested. If a particularly high proportion is invested in measures to increase demand flexibility, the flexibility bonus may also come into play. Thus, the industrial electricity price becomes not only a cost relief but also a potential investment lever for load management, storage, or smart energy control.

The chart provides an overview of the simplified logic involving electricity costs, subsidies, reinvestment, and the flexibility bonus.

What is still unclear at this time

Even though the industrial electricity price is now much more specific, not all details have been finalized.

In particular, the following remain open or need to be worked out in detail:

• the specific BAFA application process
• forms and the online portal
• requirements for providing proof of electricity consumption, industry, and WZ code
  the final funding guidelines
• Details regarding retroactive payments
• Specific requirements for reinvestments and flexibility measures
• Practical evidence for the flexibility bonus
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For companies, this means: While it is not yet possible to submit a final application, preparations can certainly be made. Those who compile data, load profiles, WZ codes, and investment plans early on will be able to react more quickly once the process begins.

What is the AgNes Grid Fee Reform?

With the General Electricity Grid Fee System (AgNes), the Federal Network Agency is planning a fundamental reform of grid fees in Germany. It is set to take effect in 2029 and will adapt the grid fee system to an electricity system that is increasingly characterized by renewable energy and greater fluctuations in availability.

Until now, the grid fee structure has been heavily based on rigid consumption profiles. Companies with constant electricity consumption have often been able to benefit from grid fee reductions, for example through the band load privilege.

However, with the growing share of wind and solar energy, the logic of the electricity system is changing. Electricity is no longer available at a constant, steady rate but fluctuates depending on weather, generation, and grid utilization.

Update August 2026: The new draft clarifies the rules
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The general direction of AgNes was already known. The current draft regulation now provides much greater clarity on how the new grid fee structure for industrial customers is to function starting in 2029.

1. Ordered Capacity Is Specified

In the future, companies will be required to specify grid capacity for each year. The new draft now also defines specific limits: Ordered capacity must generally be at least 10% of the previous year’s individual annual peak load and no more than 100% of the contractually agreed-upon grid connection capacity.
This makes it even more important to determine how much power a site actually needs and how reliably this demand can be planned and managed.

2. AP1 and AP2 specify the costs for exceeding capacity limits

Two energy prices are now specifically regulated: AP1 applies to electricity consumption within the reserved capacity. If this limit is exceeded, AP2 applies to consumption during those periods.
AP2 is intended to range between 200 and 350% of AP1.
This presents companies with a new optimization challenge: The contracted capacity should be selected as efficiently as possible without regularly causing cost-intensive overages.

3. A transition period begins for § 19 (StromNEV) customers

The roadmap is also becoming clearer for existing individual grid fees. Atypical grid usage and band-load arrangements may continue for certain existing customers until the end of 2031.
This means that 2029 will not mark a complete break for today’s Section 19 customers. At the same time, it is becoming clear that the current approach of rigid consumption profiles is not intended to continue unchanged in the long term.

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For industrial customers, this shifts the central question: How much grid capacity do I really need—and how reliably can I manage my consumption within that capacity?
Flexible consumers, storage, and smart energy management can help ensure that the selected capacity is used efficiently and that overages are avoided.

Industrial Electricity Price and AgNes: the transition to a flexible electricity system

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The industrial electricity price is not merely a short-term relief measure for energy-intensive companies. It can also be viewed as a bridge to the AgNes grid fee reform.

While the industrial electricity price is intended to lower electricity costs in the short term starting in 2026, AgNes will change the economic logic of grid fees starting in 2029. Both developments point in the same direction: flexibility is becoming a key factor for energy costs and competitiveness.
The link between the two instruments lies particularly in the flexibility bonus. Companies that invest in flexibility measures can benefit from lower electricity costs in the short term while simultaneously preparing strategically for the future grid tariff system.

At the same time, the federal government plans to introduce a capacity market starting in 2032. This market is intended to ensure the availability of controllable capacity following the phase-out of coal. In this context, not only generation will be relevant, but also the provision of capacity for grid stabilization—for example, through industrial flexibility.

For companies, the development of the electricity market means above all:

• Electricity costs are becoming more dependent on time and the grid.
• Flexibility is becoming a competitive economic advantage.
• Energy management is becoming increasingly strategically important.
• Controllable loads, storage, and load management are gaining in importance.
• Companies can prepare for future market mechanisms today.

We explain in more detail how companies can make their electricity consumption more flexible in the article “Why It Pays to Make Your Company’s Electricity Consumption More Flexible.”

Why companies should act now

Even though the final details still depend on regulatory decisions, it’s worth starting to prepare now. Companies should review their data, evaluate 15-minute load profiles, and analyze controllable loads, storage systems, PV, charging infrastructure, and planned investments in efficiency, decarbonization, or flexibility.
This will reveal early on whether eligibility is possible—and how the industrial electricity price can be specifically leveraged for load management, smart energy control, and permanently lower electricity costs.

How industrial companies can prepare now

Developments surrounding industrial electricity prices, AgNes, and the capacity market clearly show that flexibility will become a key economic factor for industrial companies in the future.

Those who begin early to align their energy consumption with these trends will be better able to take advantage of short-term incentive programs and benefit from new market mechanisms in the long term.

Short-term measures

Companies should check the following now:

• Is the company generally eligible?
• What WZ code is on file?
• Does the primary economic activity potentially fall under a relevant KUEBLL sector?
• What is the annual electricity consumption?
• What are the current electricity costs?
• Are 15-minute load profiles available?
• Are there controllable loads or processes that can be shifted?
• Are storage systems, PV, charging infrastructure, cooling, heating, or compressed air available?
• What investments in efficiency, decarbonization, or flexibility are already planned?
• What impact would the industrial electricity price have on electricity procurement, investments, and energy costs?

Some good first steps are:

• Conduct a load profile analysis or potential analysis
• Assess flex-readiness
• Incorporate the 2026 industrial electricity price into budget and investment planning
• Simulate the economic viability of commercial energy storage systems, power-to-heat, load management, or energy management software
• Examine how smart energy management can automatically leverage existing flexibility
• Prepare relevant documentation and consumption data

Mid- and long-term measures

In the medium and long term, companies should not view flexibility in isolation but rather integrate it into a holistic energy strategy.
This includes:

• automatic control of energy-intensive loads
• smart energy management software
• integration of energy storage systems
• better utilization of PV and self-consumption
• dynamic electricity procurement
• reduction of peak loads
• preparation for flexible grid tariffs
• flexibility as a strategic lever for operating costs

Our partnership with FlexPower for real-time electricity procurement and energy management illustrates how electricity procurement and energy management can be more closely integrated.
The key point: Flexibility not only reduces costs in the short term but also increases our ability to respond in an increasingly volatile electricity system.

Conclusion: Responding Intelligently to the Industrial Electricity Price and AgNes

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The 2026 industrial electricity price can provide significant relief to energy-intensive companies. At the same time, it is temporary, subject to specific conditions, and is no substitute for a long-term energy strategy.

Starting in 2029, AgNes will also change the grid fee structure and provide greater economic incentives for flexibility. Companies should therefore consider both developments together: short-term relief through the industrial electricity price and long-term cost advantages through flexible management.
What matters is not only who can benefit from the industrial electricity price—but also how companies utilize the potential relief. Those who assess their eligibility, load profiles, and flexibility potential now can strategically use the subsidy as a stepping stone toward lower electricity costs, fewer load peaks, and smarter energy management.

Partners such as encentive help companies identify flexibility potential, evaluate investments from an economic perspective, and intelligently manage energy consumption. If you’d like to explore the potential within your company, you can receive a free, no-obligation consultation.