Founding an Energy Utility in Germany: Why So Many Fail

An energy supply company (EVU) is defined under § 3 No. 39 EnWG as any natural or legal person who supplies end customers with electricity or gas. In practice a distinction is made between suppliers (selling energy to end customers) and network operators (running grids). For pure supply, there is a notification obligation with the Federal Network Agency – not an approval requirement.

Founding costs typically range from €60,000 to €150,000. This includes GmbH share capital (€25,000), balancing group securities (€10,000-€50,000), IT infrastructure for market communication (€15,000-€40,000), BDEW/EIC fees, certifications (GPKE/MaBiS), legal and advisory costs. Ongoing fixed costs for a small supplier start at €4,000-€8,000 per month.

In practice the full founding process takes between 9 and 18 months. The critical path consists of the BNetzA notification, BDEW/EIC codes, the balancing group contract and GPKE/MaBiS certification. A well-prepared project with experienced service providers completes in 9 to 12 months; without preparation or with errors in documentation, 18 to 24 months is also possible.

An energy utility in Germany does not need a permit – only a notification of supply activity to the Federal Network Agency under § 5 EnWG. Additional requirements: registration in the market master data register (MaStR), BDEW/EIC codes, LEI code for wholesale trading, a balancing group contract with the transmission system operator of your control area, registration with the Main Customs Office for electricity tax, and REMIT registration (ACER) if trading on the wholesale market.

A balancing group is a virtual account at the transmission system operator on which electricity quantities are balanced. Every energy utility must either operate its own balancing group or use a sub-balancing group via an existing balancing group responsible party. For newcomers, a sub-balancing group via a service provider is usually the faster path: lower securities, less IT effort, and no direct contract with the TSO.

GPKE (business processes for customer electricity supply) and MaBiS (market rules for electricity balancing group accounting) are the standard processes prescribed by the Federal Network Agency for market communication between suppliers, network operators and metering point operators. They are exchanged electronically via EDIFACT messages (UTILMD, MSCONS, INVOIC). Every new energy utility must use a GPKE/MaBiS-certified IT solution – either proprietary software or a market partner service provider.