German regulator’s grid fee decision ‘restores investor confidence’ in energy storage market

BNetzA president Klaus Müller told Handelsblatt reporter Catianna Krapp that while projects that are commissioned by 4 August 2029 will remain exempt, they must reach final investment decision (FID) before new regulations under the regulator’s AgNeS grid fee reforms come into effect.

The agency is expected to introduce dynamic grid fees for energy storage at some stage during 2030 and 2033, and will give more info this year.

Yesterday, Fluence’s Julian Jansen offered Energy-Storage.news a commentary in response to the latest development, describing the revised proposal of the AgNeS reform as “an important and encouraging signal for the German [energy] storage market.”

“It also sends a clear signal of certainty and clarity to investors,” Jansen said.

“By providing greater certainty and clarity to investors, it ensures that billions in private investment remain directed toward Germany’s storage market.”

FID, grandfathering and flexibility

Confirmation of the exemption “restored confidence in existing and short-term investments,” while in proposing a dynamic regulation for grid fees over the longer-term, BNetzA had “taken a significant step towards recognising the specific role of battery storage in the power system,” Jansen said.

However, the market still needs “clarity and practical rules” regarding grandfathering and the definition of FID, so that existing and near-term projects can meet the requirements to qualify for the exemption before the 2029 cut-off date, he said.

“Storage projects often require substantial development work long before formal FID is taken. Developers secure land, pursue grid connections, prepare permits, structure financing and negotiate supply agreements. If the FID threshold is set too narrowly, advanced projects could fall outside the protection, even though significant capital and effort have already been committed. That would create uncertainty at exactly the point where Germany needs investment momentum,” Jansen said.

In the longer-term, the agency’s proposed methodology for calculating future grid fees may be even bigger news, he said.

“Under the proposal, it will be recognised that storage is not a conventional consumer or generator, but a flexibility asset that charges and discharges in response to market, grid and system needs.”

Florian Didier, a senior consultant at energy storage industry consultancy Clean Horizon, told Energy-Storage.news in a recent interview that the electric system’s flexibility requirements in any given country will influence BESS deployment.

“Germany is a country where you have very large demand, very large PV production during the day, and thermal assets running at night. So, you have a critical need for flexibility to move this excess energy produced during the day and move it to the night,” Didier said.

The consultant noted, however, that governmental objectives for flexibility need and BESS developments are often greatly underestimated and transmission system operators (TSOs) are better at calculating that need.

“Basically, it’s very simple: you look at the difference between the demand of your country and renewable energy production. This will give you an order of magnitude of the remaining energy that you need to manage with the flexibility assets,” Didier said.

“So, the more difference you have between your demand and your renewable production, the more flexibility you’re going to need.”

According to Jansen, however, the BNetzA proposed methodology “avoids punishing storage for its flexibility,” which he said is the most important change for the longer-term regulation.

Developers must interpret BNetzA’s ‘constructive direction of travel’ into workable rules

“According to the current proposal, grid-connected storage would not face work-based grid charges, and there will be no double charging for withdrawal and injection. Instead, the Bundesnetzagentur proposes a low capacity-based charge, aligned with the proposed charge for generators,” Jansen said.

“This is a constructive proposal. At this level, the future grid fee should not materially weaken the business case for battery storage in Germany. Market analysis indicates that such a charge would reduce project IRRs by around two percentage points. For projects expected to reach commercial operation after 2029, this would generally keep projects within an investable range. In other words, the capacity charge itself is not the main concern.”

The industry now awaits the publication of the formal draft regulation this summer. Jansen argued that the industry’s priority should be to interpret the “constructive direction of travel” into a clear and workable set of rules. This is particularly so when it comes to grandfathering and FID criteria, which he said must reflect how energy storage projects are developed, financed and procured.

“Germany is one of the most attractive storage markets in Europe. The proposed approach confirms that battery storage is increasingly understood as a core flexibility resource for a modern, renewable-based power system,” he said.

“If the final framework provides sufficient investment certainty, Germany can continue to mobilise capital for storage projects at scale, reduce system costs, strengthen security of supply and support industrial competitiveness through a more flexible and resilient power system.”

On a related note, Energy-Storage.news‘ free webinar next week, The Impact of Germany’s Ramp Constraints and Grid Limitations on the Energy Storage Business Case, sponsored by Clean Horizon, takes place 2 June 2026 at 11am CEST. This webinar will provide a comprehensive overview of the current grid constraint landscape in Germany, with a focus on what it means in practice for the storage business case. 

Also coming up is the Energy Storage Summit at The Battery Show Europe, in Stuttgart, Germany, taking place 9-11 June. Use our discount code ESN20 for 20% off.