BBDF 2025: Why time is running out for standalone storage

The battery storage market in Germany faces numerous challenges that require legislative clarification. Until the rules are clear, investors must live with considerable uncertainty, as discussed at the Battery Business Development Forum (BBDF) in Frankfurt. Organized by pv magazine, Conexio PSE and SolarPower Europe, the event brought together more than 450 battery industry representatives on July 16. In two deep-dive sessions, expert speakers explored the market situation in Germany.

A day earlier, the German Federal Court of Justice’s ruling on construction cost charges (BKZ) had been published. These charges increase the costs of battery projects, sometimes adding a significant financial impact, depending on the region. Most participants in Frankfurt took the decision calmly, having factored in these payments into project planning. Grid operators at the event expressed relief as their related revenue is now secured.

Uncertainty about German grid fees (Netzentgelte) is a thornier problem, however. Anyone who connects a battery storage system to the grid before August 2029 will initially be exempt from grid fees. Germany’s Federal Network Agency has launched a consultation exercise to fundamentally revise the grid fee system for all electricity customers. Companies and associations were able to submit comments on an initial discussion paper until the end of June. The goal is to develop a system that distributes grid costs fairly while creating incentives for grid-friendly behavior (Netzdienlichkeit). Since the outcome of the exercise is uncertain, Xenia Ritzkowsky, of Enervis Energy Advisors, recommended planning for a worst-case scenario when developing new battery storage systems.

If the grid-fee exemption is eliminated after 2029, and a return to payment-upon-charging from the grid– possibly with payment-upon-feed-in added – occurs, that would have a particular impact on trading on the day-ahead and intraday markets. Although battery-backed trading enables a wide range of virtual transactions, the actual physical execution would always have to be factored in – which would significantly reduce the number of economically viable price spreads. It is therefore extremely important for market-based storage sites to beat the deadline for a possible reintroduction of grid fees in August 2029.

Grid availability

Another critical issue, with regard to 2029, is the availability of grid connections. Obtaining suitable connections is becoming increasingly difficult and grid operators often attach conditions linking battery operation to grid status. That often leads to lengthy procedures and technical clarifications that could make it difficult to bring projects online within four years. Some grid operators even reject grid connection requests outright due to the already high number of projects in the queue, or only offer connection opportunities several years down the line.

Many distribution grid operators are unwilling to discuss issues such as connecting battery storage systems or flexible connection agreements. Stefan Müller, chief operations officer and founder of Enerparc, was one of many participants at the Battery Business Development Forum event who complained about the situation. He called for more openness from grid operators who, as holders of a monopoly in public infrastructure, bear a special responsibility. “Fifty percent of grid operators aren’t talking to us and aren’t responding to inquiries. This is unacceptable,” said Müller.

One panel at the event revealed there are also progressive grid operators who are struggling to respond to the high volume of grid connection requests promptly, equitably, and without discrimination. They are calling on legislators and the Federal Network Agency to support the establishment of connection procedures and see a contradiction between equal treatment of all applicants and the option of concluding individual, flexible grid connection agreements.

Despite all the uncertainties, the situation for battery storage remains positive. “The market is dynamic and innovation-driven,” said Enerparc’s Müller. Financing plants is still critical, of course. Additional risks, such as consideration of hedging gas-fired power plants via a capacity market, could prove toxic to the battery industry’s business. “The decisive factor will be how this capacity market influences price volatility,” said analyst Ritzkowsky. If the capacity market leads to a narrowing of price spreads, this would have a direct impact on energy trading. On the other hand, a well-designed capacity market could also offer additional security for investors.

Project co-location

Many project developers are focusing on colocation and renewable energy storage: battery storage systems coupled with photovoltaic power plants and primarily sourcing electricity from them. A profitable business model can be developed here, said Hannes Behacker, CEO of Energy2Market. Developing sites together with generation facilities and large-scale consumers is also an interesting option. Here, however, regulatory requirements are again a key hurdle. Germany’s recent ruling on customer systems ensures it remains questionable how such projects can be structured in a legally secure manner.

From pv magazine Deutschland.