‘Critical’ for Germany’s capacity market design to enable battery storage participation

LinkedIn
Twitter
Reddit
Facebook
Email
A panel discussion at the Energy Storage Summit.
‘If you want to have a capacity market and security of supply in the future, you should not model it on an energy system of the past,’ said Fluence’s Elisabeth Giesemann, left. Image: Solar Media.

The upcoming German capacity market must be designed in such a way that enables battery energy storage systems (BESS) to generate revenue, or risk excluding BESS from the mechanism entirely.

This was an opinion expressed by speakers on a panel held during the first day of the Energy Storage Summit at the Battery Show Europe, hosted by Energy-Storage.news publisher Solar Media and co-located with parent company Informa’s The Battery Show Europe, this week in Stuttgart, Germany.

Elisabeth Giesemann, senior policy associate at Fluence, said that the design of capacity market mechanisms is “critical” to the successful integration of BESS into the programme.

“I think, generally capacity markets can be an opportunity to secure financing,” said Giesemann, referring to the upcoming CM programme for Germany, the details of which have yet to be released. “However, the design of these markets is critical, and we see [in] is the German law, which we saw in a draft… there are a couple of things where we think the design of this is not technology neutral.”

This article requires Premium SubscriptionBasic (FREE) Subscription

Try Premium for just $1

  • Full premium access for the first month at only $1
  • Converts to an annual rate after 30 days unless cancelled
  • Cancel anytime during the trial period

Premium Benefits

  • Expert industry analysis and interviews
  • Digital access to PV Tech Power journal
  • Exclusive event discounts

Or get the full Premium subscription right away

Or continue reading this article for free

“Capacity markets can tend towards specific technologies because of the complexities of the battery storage systems,” added Sonja Risteska, head of the battery storage Europe platform at SolarPower Europe, who said that technology-neutral auctions can disadvantage BESS in particular.

“For example, one of the issues is the de-rating actor, which we’ve seen in existing capacity markets, [and can] go against the business case for battery storage,” Riteska said.

“Battery storage does struggle to capture the revenues from capacity markets, especially because of how they’re designed. This is not the fault of having a capacity market itself, but [raises questions about] what kind of provisions do you have to have it in it to support battery storage?”

Learning from the example of Poland

The panellists also made frequent reference to Poland as an example of a capacity market programme that has not effectively integrated BESS and its requirements into its design; in December 2025, Poland awarded contracts to just 685MW of batteries, down from 2.5GW in 2024.

“In the Polish market the de-rating factor for batteries was very high, and [there was a] perspective that batteries could, compared to other technologies, earn quite well in this market, which led to a lot of BESS being deployed, and then the polish policymaker went a bit backwards, because they needed a longer capacity supply,” explained Nina Schmüser, regulatory affairs manager at Grenergy, who added that the capacity market could have been designed in a way to facilitate more awards to BESS.

“This law draft could have been designed in a way to give a little bit more security for future investments in such an emerging and fossil free technology, like BESS,” she said. “We are facing this period where we’re removing a lot of reliable sources from our energy market—such as coal in Poland—and we need to replace this somehow.”

Ultimately, the introduction of new financial mechanisms like capacity markets grants an opportunity to design an energy mix that is more digital and modern, according to Giesemann.

“If you want to have a capacity market and security of supply in the future, you should not model it on an energy system of the past,” she explained. “We have new technologies—batteries can play an important role for many reasons in our energy system—so the design should orient itself on what is actually technologically possible, and what can make a digitalised and modernised energy system.”

15 September 2026
Berlin, Germany
Launching September 2026 in Berlin, Energy Storage Summit Germany is a new standalone event dedicated to Germany’s energy storage market. Bringing together investors, developers, policymakers, TSOs, manufacturers and optimisation specialists, the Summit explores the regulatory shifts, revenue models, financing strategies and technology innovations shaping large-scale deployment. With Germany targeting 80% renewables by 2030, it offers a focused platform to connect with the decision-makers driving the Energiewende and the future of utility-scale storage.
2 December 2026
Italy
Battery Asset Management Summit Europe is the annual meeting for owners, operators, investors, and optimisation specialists working with operational BESS assets across the continent. The Summit focuses on how to maximise performance and revenue, manage degradation, integrate advanced optimisation software, navigate evolving market and regulatory frameworks, and plan for repowering or end-of-life strategies. With insights from Europe’s most active storage markets, it equips attendees with practical guidance to run resilient, profitable battery portfolios as the sector scales.

Read Next

June 29, 2026
The European Union (EU) has announced a tripartite agreement to accelerate energy storage deployments in the next two years.
June 26, 2026
UK energy regulator Ofgem has shortlisted 16 projects for the first ever long-duration energy storage (LDES) cap-and-floor scheme, totalling 7.6GW of capacity ranging from 8- to 22-hour durations.
June 26, 2026
Energy Dome has signed its second low-carbon energy supply contract with Google.
June 25, 2026
With ees Europe taking place in Munich, Germany, this week alongside Intersolar Europe and Smarter E, Energy-Storage.news takes a look at some expo highlights.
June 24, 2026
NatPower and Tesla have signed a multi-year supply and execution agreement covering more than 25GWh of BESS across Italy and the UK.