A quiet regulatory shift in Germany might just unleash a spending spreeand EON (EONGY) could be first in line. According to analysts at Bernstein, the country’s revised framework for grid operators is shaping up to offer better returns, possibly unlocking up to 11 billion ($12.9 billion) in additional capex from EON through the end of the decade. For a company that leans heavily on regulated assets, that shift could be the green light it’s been waiting for.
Germany’s grid is under pressure. As renewables surge, transmission bottlenecks are becoming a real concernand EON, as one of Europe’s largest grid operators, is central to fixing it. The company has already earmarked 43 billion in investment from 2024 to 2028. But it’s also flagged that, under the right conditions, another 10 billion could be deployed. Bernstein analysts Deepa Venkateswaran and Rory Graham-Watson point out that the regulatory return picture is clearly improving, possibly giving EON the confidence to go even further.
The proposed reforms, set to take effect in 2029, aim to make grid investments more rewardingafter years of investor frustration over returns that many saw as too low to justify the effort. If the reforms hold, EON’s long-term capex could trend well beyond current projections. For investors, this isn’t just about more wires and towersit’s about a regulated business model evolving into a more lucrative, scalable opportunity in Europe’s green transition.