The expansion of battery storage systems is becoming increasingly important in Germany. At the same time, the reform of the network charging system represents important regulatory decisions that will significantly influence the economic conditions under which new storage projects can be implemented.
The current discussion about storage network charges as part of the AGNES process raises a central question: How are investment decisions for battery storage systems actually made — and what role do grid charges play in this?
As a developer and operator of large battery storage systems with a portfolio of around 800 MW of investment decisions that have already been made, we are following the current debate with particular attention. Changes in the remuneration system not only affect future projects, but can also have significant effects on plants that have already been financed or are under construction.
As part of the publications of guidelines on storage network charges, the instrument of dynamic network charges was introduced by the Federal Network Agency. We would particularly like to welcome this consideration. For future market-based battery storage systems, market and grid-friendly signals should be linked so that they do not act “blindly” to shortages in distribution and transmission networks. When structuring static financing contributions, on the other hand, efficiency gains and cost savings in the entire energy system must be adequately taken into account — regardless of which connecter It is a matter of fact.
The financing function of storage network charges must always be balanced against the storage-driven savings for the energy system. The specific structure of the charging system has a direct influence on investment decisions — and thus on the speed of storage expansion in Germany.
Both capacity/performance prices and a static labor price component are discussed. However, the introduction of static labor price components in particular would have drastic negative effects both from a system perspective and for storage operators. The economic operation of future plants, whose purchase from the network is charged with static work prices, appears almost impossible. In addition, the introduction would also change the use of storage and thus reduce welfare effects. We therefore consider this instrument to be unsuitable for storage systems from a system perspective and in terms of economic viability.
Static capacity prices correspond to fixed power prices per kW connected load, which arise regardless of time, network situation or actual use of a storage system. They therefore represent an annual fixed cost component that is linked solely to the connection service provided. Especially for battery storage systems whose revenues are completely driven by market prices, such a fixed cost burden can have a significant impact on the profitability of a project.
When introduced, this cost component would be anything but negligible: Take, for example, a Performance price of 130 euros per kW per year (annual usage time > 2500 hours per year; conservative estimate) in 2030 and a 100 MW/200 MWh battery storage system with efficiency of around 85%, this would result in the following capacity price:
Capacity price 2030 =
(1 — 0.85) · 100,000 kW · 130 EUR/k =
1,950,000 EUR
Depending on current revenue forecasts, these additional payments of the capacity price correspond to more than 10% of revenue from storage marketing in 2030.
When considering the economic viability of battery storage systems, the revenues based almost exclusively on short-term market mechanisms must be taken into account. This is a decisive difference to thermal power plants or many renewable energy plants. This results in significant risk reductions from investors in revenue expectations.
The static financing contribution, like a capacity price, must not overwhelm the cost-bearing capacity of future energy storage systems. However, we do not see this as guaranteed under the above conditions.
In particular, a retrospective introduction of the capacity price could represent a tipping point for the operability of the project, with drastic consequences for Germany's attractiveness as a location for international investors. Mostly international investors would calculate a significantly higher risk premium, which would massively increase the cost of financing storage and probably other investments as well. As a result of this increase in price, we expect the price-reducing effect of storage to be significantly lower and the burden on end users will increase rather than decrease. In the worst (and irreplaceable) case, investment volumes would fall massively in general.
We welcome the introduction of a symmetrical, location-variable and time-variable network charge for electricity storage systems. It provides effective price signals to better balance market and network requirements. The study situation shows that such a charge can significantly reduce network bottlenecks and redispatch costs.
It is a suitable tool for combining network and system benefits. In our opinion, however, this is particularly the case in areas where the bottleneck situation and the technical application options (in particular the storage period) complement each other well. However, this assessment only applies to storage facilities where a dynamic charging regime could be taken into account in the early stages of project development, in particular when choosing a location.
In the context of existing connection requests, however, this was not a relevant parameter for defining suitable locations. At the same time, the basis for calculating such dynamic network charges should also be standardized. Due to the large number of network operators in Germany, we otherwise see the risk that different tax bases will not preclude freedom from discrimination.
For these reasons, we would like to argue that the introduction of dynamic work prices for existing plants should only be designed as an opt-in rule.
We are calling for such projects with secure connection capacity to continue to benefit from the current charging regime until the end of 2026. Otherwise, Kyon Energy would no longer regard the protection of legitimate expectations here as this would significantly undermine the profitability of the project.
For future investments, we call for the choice of a financing component to be made realistically taking financial sustainability into account; we consider static labor price components to be structurally unsuitable for this purpose. Current studies on the systemic and economic added value of the introduction of grid charges that vary in time and location prove this. We assume that in such a regime, storage developers' choice of location is decisively driven by mutually positive bottleneck structures. If, on the other hand, reliable and investment-friendly framework conditions do not exist, there is a risk of a significant slowdown in storage expansion.
The possible thread break in the development of storage projects or storage gaps therefore represents a real scenario that has already emerged in background discussions with external investors. However, the effects of a lack of storage expansion would extend far beyond the storage industry. For example, storage units above low voltage were installed in System Stability Report 2025 named as one of the pillars of system services to be purchased on the market.
If storage development in Germany were not resumed until 2028, the ramp-up of storage connections would only restart well after 2030. Negative prices would rise significantly and would be further reinforced by the upcoming coal phase-out. Even those gas-fired power plants that are to be funded as part of capacity tenders would probably not yet be operational.
Challenges in network and system management that are already known today would further intensify: severe price fluctuations and price peaks, additional need for frequency and voltage maintenance, lack of flexibility on the consumer side and a large number of non-controllable renewable energy systems. In particular, this would also lead to an increase in electricity prices, which are borne by end users.
The impending storage gap therefore falls into a particularly sensitive transition phase of the German energy system, in which short-term provision of flexibility is particularly required. It therefore appears urgently necessary to establish a pricing system in the short term which brings together network and market requirements, protects investment decisions made and enables the further expansion of storage facilities in Germany.
.avif){kind=logo}
