Germany’s energy storage market growth will be hampered by a regulatory decision to potentially charge utility-scale project operators fees for use of the grid, Energy-Storage.news has heard.
The lifting of an exemption on grid fees until 2029 has introduced uncertainty for investors, Julian Jansen, managing director for Germany at battery energy storage system (BESS) technology provider Fluence, told the site in an interview at the Energy Storage Summit 2026 in London this week.
Battery storage systems commissioned up until 4 August 2029 are currently guaranteed a grid fee exemption for 20 years from the commissioning date. As part of a broader reform of grid fees called AgNeS, the federal network regulator, the Bundesnetzagentur (BNetzA), recently signalled that the exemption could be lifted and applied retrospectively to some assets already in operation.
“Overall, the [German] market was going through a very positive development,” Julian Jansen said, noting that there has been greater revenue certainty for projects driven by tolling agreements and the value of flexibility.
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Fluence has seen a shift in project durations from around 2-hour on average to 4-hour, which Jansen said gives an indication of the depth of the arbitrage opportunity in the country’s power markets.
At the same time, we saw general buy-in from policymakers and regulators on the role that storage needs to play in an efficient electricity grid.
The BNetzA itself anticipates large-scale energy storage deployments to rapidly grow from around 2.8GW today to 68GW/135GWh by 2037.
“Overall, we saw investors flooding to Germany, looking to deploy their capital and to invest in storage projects, especially with the certainty around the exemption of grid fees to mid-2029.”
“Within an instant,” Julian Jansen said, the regulator’s announcement calling the existing grid fee exemption into question has “taken the wind out of the sails of the industry.”
“There was a very clear statement made by several large and major energy companies that are asking for an immediate reinstatement of the grid fee exemption, because the reality is, it’s a ‘double whammy’ for storage investors. At the same time, [the regulator is] saying that the exemption will not apply, but at the same time, you have not yet created the framework for people to understand what level of grid fees they will be paying.”
After an ongoing consultation period, BNetzA will decide on the future of grid fees in its AgNeS reform process by the end of this year, and the regulator has publicly stated that the imposition of grid fees should not hamper the expansion of energy storage deployment.
As things stand, Jansen said, investors are unable to price in the cost and risk profile of grid fees in their decision-making.
“Having that double uncertainty in the market completely undermines what has been building in Germany over the last few years, and it decelerates development, it delays investment decisions, and in the end, it will create a gap of storage deployment that we cannot afford in Germany.”
Inertia payments: a ‘great additional value stream’ which raises the bar for technical standards
In contrast, Germany’s new mechanism for paying for inertia system stability services is a “unique proposition” in Europe that should be warmly welcomed, Jansen said.
At the end of January, a BNetzA procurement concept for inertia was put in place. Inertia, among the most critical of system stability services for maintaining the correct frequency of the grid, is typically supplied by the spinning mass of thermal generator turbines.
That means it is something of a final frontier for grid decarbonisation: variable renewable energy (VRE), backed with storage, can replace energy capacity and, through frequency regulating ancillary services, correct power fluctuations once they occur, but hardware and software upgrades to turn the inverters in BESS plants from ‘grid-following’ to ‘grid-forming’ can help replace the power system stability roles of thermal generators, including fossil fuels by actively creating the grid’s frequency and voltage.
The country’s four transmission system operators (TSOs) are offering fixed payments for the new non-frequency ancillary service, called ‘Momentanreserve’ (‘Instantaneous Reserve’).
“To create an overarching market to procure inertia, which is becoming so critical as we are decommissioning more and more of the synchronous generation on the grid, is a great signal,” Julian Jansen told Energy-Storage.news.
“It’s a great additional value stream for battery energy storage projects, which is one of the few technologies that can effectively provide it, and it provides an additional [10-year contracted] revenue stream with long-term certainty.”
An additional benefit of the new scheme is that, by necessity, the technical barriers to entry are high. The quality of projects that bid into Momentanreserve is “significantly higher and of much greater benefit for the overall energy system” because of the stringent rules around how the BESS projects are designed, Jansen said.
“So, while on the one hand, it provides additional income for investors, it is also a great way of driving more system friendly power system-friendly deployment of battery storage assets.”
