Energy Storage Regulation and Policy in Germany 2023

In Germany, energy storage regulation is primarily influenced by the country’s energy policy goals, which are characterized by the Energiewende (energy transition). The Energiewende aims to shift the energy system towards a more sustainable, low-carbon, and decentralized energy landscape, heavily relying on renewable energy sources.

Energy Storage Regulation and Policy in Germany 2023

Current Electricity Storage Projects in Germany

For many years, the main way Germany stored electricity was through pumped hydro storage. There are about 30 of these projects, and they’re the biggest part of Germany’s electricity storage, totaling 7 gigawatts. They were used to store extra electricity during low-demand times (like at night) and release it when demand was high (like during the day). Lately, they’ve been helping store energy from wind and solar farms, as well as meeting high electricity demands.

There’s also a plant that uses compressed air to store energy (Huntorf CAES plant), which was the world’s first of its kind. It started in 1978 and got bigger in 2006. Germany’s first big battery storage was built in 1986 in Berlin-Steglitz, but it was shut down in 1994 after some big changes.

Now, the focus is on battery storage and making better batteries. One cool project combined different types of batteries to store wind energy and help with the energy supply when lots of people need it. Another project used lead-acid batteries to help control the power at a big solar plant.

Upcoming Electricity Storage Projects in Germany

Germany’s shift to cleaner energy, known as Energiewende, has emphasized the importance of effective energy storage. Battery storage systems, especially those larger than 1 MW, have become crucial for stabilizing and managing the power grid, a task mainly overseen by grid operators and utilities. A notable trend is combining battery storage with renewable energy generation. In 2015, 41% of new solar installations in Germany were paired with battery storage, a substantial rise from the previous year’s 14%.

Numerous significant battery projects, primarily utilizing lithium-ion technology, have already been finished in Germany, and many more are either being planned or constructed. While earlier projects received financial support from the government, today’s projects mainly sustain themselves through revenue generated in the frequency response market.

STEAG, a power plant operator, is actively involved in this effort. They operate a 5 MW/5 MWh lithium-ion battery storage facility and have plans for six more projects, each with a capacity of 15 MW. Lower costs associated with photovoltaic (PV) systems and small batteries, along with creative leasing models, are facilitating the integration of small battery storage with PV systems. This integration enhances self-sufficiency and provides valuable frequency response services. Innovations include linking small batteries to central units, forming virtual power plants to bolster grid stability.

Furthermore, district storage solutions are emerging, exemplified by projects like the “electricity bank,” which employs a 100 kWh lithium-ion central battery storage system. This system enables owners of small photovoltaic (PV) and combined heat and power (CHP) plants to store excess energy. Notably, car manufacturers are entering the stationary battery storage market by repurposing car and electric vehicle batteries. This initiative helps finance projects by offering frequency response services, contributing to a more sustainable energy future in Germany.

Energy Storage Regulation and Policy in Germany 2023

Energy Storage Regulations in Germany

In Germany, there is no specific legislation for electricity storage facilities. Instead, they are considered electricity consumers. This implies that storage facilities must pay standard electricity consumption fees when taking power from the grid for storage.There are exemptions in place to encourage storage facility use. The German Federal Energy Industry Act (EnWG) exempts certain storage facilities built after December 31, 2008, and put into operation within 15 years starting from August 4, 2011, from network tariffs for 20 years when withdrawing electricity for storage. These exemptions apply when electricity is later returned to the same grid. There is some debate about whether this exemption includes other charges and levies.

The German Renewable Energy Sources Act (EEG) exempts temporarily stored electricity from the EEG levy when it’s returned to the same grid. Regarding electricity tax, pumped hydro storage facilities are exempt as electricity generators, but other storage facilities are not currently mentioned in the regulation. A legislative amendment has been proposed to allow battery storage facilities to be considered part of the network, exempting them from electricity tax if electricity is stored temporarily and fed back into the grid. To expand the market for balancing energy, the German Federal Network Agency has proposed changes, including exemptions from size requirements on the secondary and tertiary control markets. However, changes in the primary frequency response market are not expected at this time.

Key Players in Energy Sector & Their Roles in Storage

  • Germany’s Federal Ministry for Economic Affairs and Energy, responsible for national energy policy, actively supports electricity storage facility development. Since 2012, around 250 projects have received funding under the Energy Storage Funding Initiative.
  • A newly launched battery storage funding program focuses on decentralised battery storage systems, with the goal of optimizing PV installations connected to the grid by capping their maximum export at 50%.
  • The Federal Network Agency serves as the key regulator for electricity storage and has proposed changes to balancing power markets, providing opportunities for storage facility operators to participate in these markets.

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