Germany weighs retroactive grid charges for battery storage assets

The Federal Network Agency (Bundesnetzagentur) hosted an expert meeting in Bonn on Friday to discuss the grid fees for energy storage, as part of the ongoing AgNes procedure – the formal process for defining the general network charge system for electricity. Ahead of the meeting, the Bonn-based agency published a 16-page document entitled Guidelines for Storage Network Charges.

The discussion quickly turned to a contentious issue: whether the full exemption of storage facilities from grid fees will remain in place until 2029 and continue to apply for 20 years. Representatives from the storage industry and associations strongly opposed any early termination, citing the principle of legitimate expectations.

Officials from the Federal Network Agency, however, presented their reasoning in favor of possible changes. They argued that an early termination could be justified for two main reasons. Firstly, to avoid creating a disadvantage for new storage facilities that will connect to the grid from 2029 onwards. Secondly, to examine whether applying changes now would constitute a “pseudo-retroactive effect” under the principle of legitimate expectations.

According to the agency, this principle has not actually applied since a 2021 European Court of Justice (ECJ) ruling, which deemed the legal enshrinement of the full exemption unlawful. Additionally, a restructuring of Germany’s grid fee system was already decided in 2023, granting the agency the authority to deviate from the existing rules. Agency representatives argued that these developments should have signaled to storage investors that the grid fee system is subject to change at any time, and that the principle of legitimate expectations no longer provides protection.

Project developers and industry associations rejected the agency’s argument, noting that changes in the legal framework mean that protection under the principle of legitimate expectations would only cease at the earliest upon the submission of a draft law. Consequently, the Federal Network Agency could only invoke its position again in 2025, with the submission of its key proposals for the grid fee reform. Even so, many storage operators remain concerned: investment decisions are jeopardized, and bank financing for projects is uncertain.

A central issue is that the structure of grid fees for battery storage from 2029 onwards remains unclear. Several options are being considered: fixed energy prices could severely constrain storage business models, whereas dynamic grid fee components with incentive functions might even generate additional revenue for storage operators.

On this point, a representative of the Federal Network Agency jokingly remarked, “Additional revenues are, of course, always protected by the principle of legitimate expectations.” Accordingly, the agency prefers a system in which a floor is introduced as a skimming component if the dynamic energy price exceeds the financing energy price. This aligns with the agency’s stated goal: storage facilities should contribute to financing the networks in the future. Agency representatives made it clear that the full exemption will end no later than 2029 and that the current system will not remain in place until 2045. The issue of legitimate expectations will be definitively settled during the balancing phase, with careful attention to balancing interests and ensuring an orderly transition. Individual arrangements may also be considered.

Flexible grid connection agreements

Another topic discussed at the expert hearing was flexible grid connection agreements (FCAs). These agreements place restrictions on battery storage systems when connecting to the grid, with requirements that can vary widely – covering available connection capacity, grid usage, or operating modes. The agency expressed surprise that FCAs remain “in their infancy” and that no standardization exists. However, a representative emphasized that FCAs will be taken into account when calculating grid fees, noting that fees can only be fully applied if the grid connection can be used without restrictions.

Rapid clarity is critical for the energy storage industry. Without it, a storage gap of at least 10 GW could emerge in the coming years, warned Georg Gallmetzer, CEO of EcoStor. Investment decisions, he stressed, will not be made if market communication is delayed or if transitional regulations remain unclear.

On the key issue of protecting legitimate expectations, the Federal Network Agency was ultimately able to offer some reassurance to the invited experts. Agency representatives emphasized that they do not intend to stall investment in storage. Instead, their objective is to establish a robust and equitable regulatory framework that ensures new, yet-to-be-built storage facilities contribute to grid costs. They also raised the question of whether such a framework should apply to existing storage assets as well. To rebuild confidence, however, they acknowledged that the pricing mechanisms now need to be calculated urgently.

The AgNes process timeline envisages another expert exchange on February 20, focusing on feed-in tariffs, followed by a further meeting in March on cost allocation. The Federal Network Agency plans to publish interim AgNes results in the second quarter, with the first draft decision expected in mid-2026. This will be followed by additional consultations, before a final ruling is issued by the end of 2026. According to the agency’s schedule, the practical implementation of transitional regulations and AgNes requirements is set to begin in early 2029, with market communication starting as early as 2028.

From pv magazine Germany