The point is: they can rely on their neighbors as a kind of safety net for times when renewables output is not sufficient. And the Norway hydro-storage potential also plays a huge role here, it allows Germany to have less domestic storage and gas peak plants, thus preventing the electricity cost from soaring even higher (which is already the highest in the EU).

Right, that's also the plan. There is also a grid in the North Sea which will be extended, to exchange electricity from the offshore wind production. There will be more lines to Norway. Germany will have their own storage systems in the North, etc.