Recently, the German energy system regulatory authority confirmed that battery energy storage projects that are put into operation before August 4, 2029, will be exempted from grid charging and discharging fees. This decision has ended the policy uncertainty that has persisted for several months and has reopened the investment window.
The chairman of the German Federal Network Agency, Klaus Müller, confirmed this news recently and simultaneously clarified several other matters.
Müller has now made it clear that the energy storage projects that go into operation before August 4, 2029 will continue to enjoy the exemption benefits, but these projects must reach the final investment decision (FID) before the new regulations come into effect in 2027. The new regulations are expected to take effect at some point within 2027.
Subsequently, the German Federal Network Agency will introduce a dynamic grid fee for energy storage systems. Currently, this mechanism is planned to be implemented between 2030 and 2033. Senior executives in the battery storage industry have responded positively to the news posted by Klaus Müller on LinkedIn.
Julian Jansen, the German regional general manager of energy storage system integrator Fluence, said: “This decision will provide clarity and security for the market, thereby releasing billions of euros of private investment into the German energy storage sector – this will enhance energy security and create a more efficient power system. However, due to many energy storage projects facing development challenges, slow contract processes, and limited execution capabilities of large EPC projects in the market, developers and owners must be aware that the time for reaching the final investment decision is running out.”
Lars Stephen, an executive of Fluence, stated that over the past five months, no investment projects have been decided due to policy uncertainties. There is also a view that, even disregarding the uncertainties, the current electricity grid fee levels inherently make battery storage projects uneconomical. In contrast, currently, energy storage projects in Belgium enjoy exemption benefits, the electricity grid fees in the Netherlands are more flexible, and Romania has waived the grid charging and discharging costs for energy storage systems.
Georg Gallmetzer, the general manager of the energy storage system operator Eco Stor, pointed out that the uncertainty surrounding the grid charging and discharging costs of energy storage systems (as well as other factors) has led to a cooling of investors’ interest in the German energy storage market.
Germany has the largest electricity wholesale market in Europe, presenting tremendous business opportunities. However, policy uncertainty has always been a major obstacle hindering the development of the energy storage industry.