German battery industry awaits May 27 decision on grid connection payments

Germany’s BGH will address the contentious question of construction cost subsidies for BESS in late May.

The question came before the courts after BESS operator Kyon Energy submitted a grid connection request for a standalone, up-to-1,725 kW/3.45 MWh battery in May 2021.

The electricity distribution system operator (DSO) in question assigned a connection point and demanded a construction cost subsidy calculated in line with a position paper issued by German utilities regulator the Federal Network Agency.

Kyon, in June 2022, asked the Federal Network Agency to prohibit the DSO from demanding the subsidy in principal or, alternatively, to change the amount calculated, citing section 31 of Germany’s Energy Industry Act (EnWG).

The agency refused, in December 2022, and Kyon appealed. In December 2023, the Düsseldorf Higher Regional Court overturned the agency’s decision with the judges ruling the construction cost subsidy, calculated based on a capacity pricing model, discriminatory.

In their ruling, the judges said the subsidy, as calculated, violated section 17 (1), sentence 1 of the EnWG, and stated, “A key difference from the standard case of a grid connection for the withdrawal of electricity, which is subject to a construction cost subsidy, is that the agreed connection capacity for [energy] storage cannot be used continuously but only with a time delay after the stored electricity has been fed back into the grid.” The judges demanded the “feed-in side” of the battery’s operation – when the BESS would inject stored electricity into the grid – should be taken into account.

The Federal Network Agency appealed the Düsseldorf court ruling, bringing the case before the BGH. The federal body on Monday said Germany’s Cartel Senate is set to hear the case on May 27.

The agency altered its construction cost subsidy paper, in the fall, to ensure it is non-discriminatory but has made the revised version subject to the BGH decision.

In an interview with pv magazine, Dirk Voges, partner and lawyer at the Gunnercooke law firm, recommended any construction cost subsidies paid by the developers of large BESS should be made subject to reservations until the BGH makes its ruling.

From pv magazine Deutschland.