While Germany is often described as the ‘hottest’ energy storage market in Europe, growing uncertainty on multiple policy and regulatory topics has led to a ‘cooling’ of investor interest.

The situation and uncertainty around grid connections and grid fees in Germany is evolving, possibly enabling market participants to look beyond the August 2029 grid fee exemption cut-off date – although uncertainty is still very high.

Lenders are increasingly willing to back large-scale BESS projects in Germany that don’t have any contracted revenues, although that merchant risk is priced in to structures, an executive at Aquila Clean Energy EMEA said.