Reactive power is the portion of electrical power in an alternating current system that arises from the phase shift between voltage and current. Unlike active power, reactive power does not perform any direct useful work. It is needed to build up and maintain electric and magnetic fields in devices with inductance and capacitance, such as electric motors, transformers and capacitors. From the perspective of the grid, however, reactive power represents an additional load: it causes current to flow without transferring active power, thereby placing strain on lines and equipment. It is therefore considered a disruptive factor in grid operation that reduces efficiency.
Reactive power thus differs significantly from power loss: power loss is usually caused by ohmic resistances and is predominantly converted into heat. Reactive power, on the other hand, is a necessary accompanying variable in alternating current operation, as it is required to build up and maintain electric and magnetic fields. Reactive power places a load on the power grid without being directly usable, which is why its share is kept as low as possible for technical and economic reasons. However, with the decline of conventional power plants and the increasing expansion of renewable energies, the demand for reactive power is rising significantly. Therefore, reactive power must now be provided in a targeted and flexible manner in order to ensure voltage stability and grid stability.
Large-scale battery storage systems can provide a wide range of system services in the electricity grid. In addition to participating in the control energy market, they can also provide reactive power in a targeted manner. This task is not limited to times when the storage system is feeding energy into or out of the grid – large-scale battery storage systems also provide reactive power independently of active power, enabling a fast and flexible reactive power response depending on the grid operator's requirements.
According to the Technical Connection Guidelines, battery storage systems are generally required to provide a certain amount of reactive power. Beyond these minimum requirements, additional reactive power can be provided through a market-based process.
Since the introduction of the reactive power market in 2025, large-scale battery storage systems have been able to offer this additional reactive power and thus generate additional revenue. The first tenders took place in the summer of 2025 and will be held regularly in the future. With the introduction of the market, distribution network operators are now also more involved in reactive power procurement. As a result, large-scale battery storage systems are becoming increasingly important at all voltage levels.
It is the responsibility of grid operators to ensure that the required reactive power is provided reliably and in sufficient quantities. Up to a certain extent, the provision of reactive power by large-scale battery storage systems is regulated in the Technical Connection Conditions (TAB) of the respective grid operators and in the Technical Connection Guidelines (TAR) published by the VDE. Plant operators do not receive any additional remuneration for the mandatory provision of reactive power – despite the additional costs incurred as a result. Since 2025, reactive power provision exceeding the minimum requirements described above can be carried out within the framework of market-based procurement of reactive power.
The mandatory provision of reactive power is initially regulated in the Technical Connection Conditions (TAB) of the grid operators and in the Technical Connection Guidelines (TAR) issued by the VDE. Any additional requirements have often been secured through bilateral agreements between mostly conventional large power plants and the respective transmission system operators. Pricing was determined in individual negotiations and was not published, which led to a lack of transparency. According to the Federal Network Agency (BNetzA), the agreed prices vary considerably, ranging between €0.08 and €2.27/MVArh (source: discussion paper ‘Reactive power provision for grid operation’, BNetzA).
Back in 2019, the legislator stipulated in Section 12h of the Energy Industry Act (EnWG) that the procurement of reactive power – analogous to other electricity products such as balancing energy – should be based on a transparent, non-discriminatory and market-based procedure.In order to implement this requirement, the Federal Network Agency initiated a determination procedure in accordance with Sections 12h (5) and 29 (1) EnWG at the beginning of 2023.
The corresponding determination was published on 25 June 2024 with decision BK6-23-072 and comprises the essential specifications and technical requirements for the market-based procurement of reactive power.
Accordingly, operators of extra-high and high-voltage grids are obliged to designate several procurement regions within the respective control area, for which market-based procurement is carried out separately. Within twelve months of the determination, they must conduct market-based tenders for reactive power requirements for at least one procurement region. Market-based procurement must be initiated in all grid regions no later than 36 months after the determination, provided there is a need.
Reactive power was traditionally provided by large power plants and specially built phase shifters. However, all systems connected above low voltage – including renewable generation plants and large battery storage systems – are now required by the Technical Connection Guidelines (TAR) to provide a certain amount free of charge. With the ongoing expansion of renewable generation plants and large-scale battery storage facilities, and the gradual decline of conventional power plants, this capability is becoming increasingly important. Grid operators can thus draw on a growing number of decentralised plants and ensure that the electricity grid continues to be stabilised by sufficient reactive power in the future. Battery storage systems in particular offer a decisive advantage here: they can provide or absorb capacitive or inductive reactive power independently of active power, thus actively contributing to voltage stability.
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