Public Law

The BMWK’s electricity storage strategy – a regulatory boost for electricity storage

The Federal Ministry for Economic Affairs and Climate Action (Bundesministerium für Wirtschaft und Klimaschutz, “BMWK”) presented its electricity storage strategy on 8 December 2023. The strategy, which is aimed at supporting the current expansion of electricity storage and at optimising the integration of storage systems into the electricity system, identifies numerous areas for action. Industry associations had until 16 January 2024 to comment. The strategy provides a valuable insight into the Federal Government’s future framework for the operation of electricity storage systems and the issues that remain open.


Germany’s electricity supply is to be practically climate-neutral by 2035. Integrating the rapidly increasing volumes of electricity generated from wind and solar into the electrical power system will demand a high degree of system flexibility. Electricity storage systems – which can not only store energy, but due to their quick response times can also stabilise the grid frequency by absorbing sudden surges and meeting sudden peaks in demand– are destined to play a key role in the electricity grid of the future.

Market-driven growth

Electricity storage units can be divided into large-scale storage units (pumped storage power plants, large-scale battery storage systems) and small-scale storage units (commercial storage, home storage and electric vehicles with vehicle-to-home or vehicle-to-grid capabilities). While increasing numbers of pumped storage power plants and large-scale battery storage systems are under construction, the majority of the battery storage systems currently registered are home storage systems. The BMWK sees the growth of storage deployments as a market-driven development which both should be encouraged and which demonstrates the current economic viability of electricity storage systems.  The published strategy analyses the current situation and accompanying legal framework and identifies specific areas for action to support the trend, with some measures already under implementation.

Industry associations remain sceptical about the economic viability of electricity storage systems, arguing that their current profitability is largely due to their use for supplying balancing energy and the sufficiently high prices for primary balancing energy that have existed to date. This could be counteracted by a further liberalisation of the electricity markets so as to allow high prices for a limited period of time, which could ensure the necessary basis for the economic viability of storage systems in arbitrage trading. 

What areas for action have been identified? 

Improvements to information and models

The BMWK has set itself the general task of identifying and removing obstacles to the growth of the electricity storage market. It also aims to put the discussion on a more fact-based and specific footing, removing the various conflicting assumptions and figures about the need for storage capacities currently in circulation. These improvements are to provide a basis for developing battery growth models and storage statistics, which makes it clear that the BMWK’s electricity storage strategy is a long-term one and that support for the market will be ongoing. The BMWK also sees a specific need for reform and has plans to further develop the legal framework.

Changes to subsidies under the EEG 

The BMWK plans to examine whether the conditions for subsidies under section 19 Renewable Energy Sources Act (Eneuerbare-Energien-Gesetz, “EEG”) could be improved to allow systems to store not only electricity from renewable energy plants (green electricity) but also electricity from the grid generally (grey electricity) without losing their subsidy for the proportion of green electricity stored. The strict separation of these two types of electricity under the current legislation causes valuable storage potential to be lost.

There are already technical solutions with which to deal with the measurement-related issues of distinguishing between grey and green electricity stored simultaneously, and these have been provided for in section 21(1) and (4) Energy Financing Act (Energiefinanzierungsgesetz). This experience can be called on in adapting section 19 EEG. Since every megawatt-hour stored reduces the peak power required from fossil fuels, which will become increasingly expensive in the future, amending section 19 EEG also has macroeconomic benefits. 

Support for electricity storage co-located with renewable energy plants

The BMWK welcomes the energy industry’s plans to routinely equip solar parks with battery storage and intends to examine whether further incentives are required for the construction of other co-located storage systems, in particular at wind farms and existing solar installations. Linked to this, the BMWK will also examine options for the further development of innovation tenders.

There are also issues with the redispatch rules for storage systems operated together with renewable energy plants. At present, the electricity produced by plants of this kind is not permitted to be fed into the storage system if the plant is required to reduce its output due to congestion. This needs to be improved as soon as possible, such as by integrating storage into the framework of contracts for difference. 

That aside, present practice for the dimensioning of grid connection points for renewable energy plants with electricity storage systems contravenes the interests at stake. For example, it is not useful to require that they be able to handle the total maximum load that the renewable energy plant and the storage system can produce together, given they are often used anti-cyclically. More appropriate dimensioning requirements are needed. Overall, grid-connection-point use is most efficient where they can be used by both renewable energy and storage installations (hybrid grid connection points). Moreover, the discussion should not only be about equipping new renewable energy plants with storage systems but should also look at plants scheduled to be retrofitted.

Grid fee reforms

The BMWK is considering talks on extending the grid fee cancellation for large-scale storage facilities under section 118(6) Energy Industry Act (Energiewirtschaftsgesetz, “EnWG”) that applies until 2029. As regards small storage installations, the BMWK recognises that the unit prices in the current system of low-voltage-related grid fees encourage an own use of self-generated electricity wherever possible and that, as a result, the flexibilisation potential of small storage systems is lost. According to the BMWK, the Federal Network Agency’s (Bundesnetzagentur) stipulations on controllable consumption devices will change this by enabling small storage facilities such as home storage systems and heat pumps to benefit from reduced grid fees.

The BMWK’s comments lack further proposals on incentives for small storage systems. For example, consideration could be given to extending the exemption to mobile storage systems and other important technologies that improve flexibility within the grid (power-to-heat and electrolysers). This would allow the time-variable grid charges under the stipulations on controllable consumption devices to be developed into dynamic grid charges.

Adjustments to building cost subsidies and contributions to grid connection costs

The BMWK identifies the major regional differences in the cost of electricity storage projects, and hence the difficulty in calculating project costs, as a further obstacle. The Bundesnetzagentur is therefore to examine whether binding provisions on construction cost subsidies and contributions to grid connection costs may help counteract these differences.

Introducing a waiver or at least a discount for network-benefiting storage systems would also be desirable. 

Reductions in bureaucratic hurdles

Bureaucratic hurdles are to be addressed, especially overly slow grid connections and overly long and complicated authorisation procedures. Turning to insufficient grid connection speeds, the BMWK prioritises four topics, namely standardising technical connection conditions, simplifying the grid connection procedure, utilising grid capacities and cost transparency. It holds out the prospect of a quick implementation (or start in implementing) the industry’s proposals and plans to examine whether the grid connection priority for green electricity storage systems under section 8(1) EEG should be extended to all energy storage systems. The authorisation procedures for large-scale storage installations are also to be made shorter and simpler. 

Increasing local acceptance

The storage strategy also addresses societal obstacles, i.e. local acceptance issues. Since local political resistance can jeopardise large electricity storage projects in particular, the BMWK plans to consider whether and how far improved municipal financial involvement may aid local acceptance of electricity storage installations. Firstly, the BMWK is considering an amendment to section 29 Trade Tax Act (Gewerbesteuergesetz) by the Federal Ministry of Finance (Bundesfinanzministerium) in order to extend the trade tax standards currently applicable to companies that operate electricity-generating plants to also include storage facility operators. Secondly, the BMWK plans to examine whether it is possible and sensible for municipalities to contribute financially to electricity storage systems under section 6 EEG. The measures already implemented, such as classifying electricity storage systems as in the overriding public interest, are also helpful in this context as it gives them a suitably high weighting in planning and approval decisions.

Market-based procurement systems to increase system stability

The BMWK recognises a need for electricity storage to play a greater role in system stability going forward, meaning that the technical properties of electricity storage systems and procurement processes must be developed further. Three ways to secure a greater contribution from electricity storage are identified: via mandatory technical requirements under the grid connection rules, by voluntary market-based procurement, and as a component of the grid operating resources of grid system operators. The Federal Network Agency has already made provision for market-based procurement systems for non-frequency-based ancillary services within the framework of section 12h EnWG. Market-based procurement systems are currently being developed for voltage stability / reactive power and system inertia, to which electricity storage systems are very well suited, with stipulations on these planned for 2024. In general, the BMWK intends to look at the extent to which the framework conditions can be improved (through stipulations or authorisation procedures) so that electricity storage systems can provide more balancing services in future. This highlights the grid-stabilising role that electricity storage systems will play going forward.

A further step forward would be if grid operators could include battery storage systems as grid operating resources in their future planning since in certain circumstances battery storage can be a more favourable alternative to grid expansion.

Evaluation of “grid booster” installations

Sections 11a and 11b EnWG already permit grid operators to install and operate battery storage systems for purely grid-related purposes under certain conditions. The BMWK is awaiting a report from the operators of two grid-booster pilot plants to evaluate the associated possibilities. New areas of business will open up if these reports are positive.

It is crucial to the evaluation that the criteria are transparent and that cost-benefit analysis plays a central role. In the meantime, the framework conditions for the procurement of additional storage capacities can continue to be developed close to market.

Capitalising on the potential of bi-directional charging

The BMWK wishes to capitalise on the potential of bi-directional electric-vehicle charging and points to recent, successful projects – for example, the National Centre for Charging Infrastructure has developed specific recommended actions to remove obstacles to bidirectional charging. The BMWK also holds out the prospect of proposals on future improvements to the national and European legal framework, but without outlining any specific measures.

Given that electric vehicles offer large electricity storage capacities that already exist, expanding bidirectional charging makes sense. However, this potential will only be ever available to a limited extent and on a small scale, meaning that bidirectional charging will not be able to replace large stationary battery storage systems. Moreover, tapping this potential will require the rapid ramp-up of smart metering systems, especially home energy management systems with the ability to automatically react to price signals from the grid or market.

Better flexibility through energy storage

The BMWK wishes to strengthen electricity storage as a way to provide flexibility on the market and in the grid, taking into account the discussions within the Climate-Neutral Electricity System Platform and giving consideration to a variety of sources of revenue. 

The position of electricity storage could also be improved by approving electricity storage systems to be used within the framework of section 13k EnWG (“utilisation before curtailment”). Electrolysers and heat accumulators can also be flexibly controlled to in a way that benefits the grid. Consideration should therefore be given to whether these systems should be treated in the same way as battery storage systems. Overall, regulations that restrict storage systems to one or a few functions are a hindrance to flexibility.

Promotion of research and development of production capacities

Last but not least, the BMWK states its intention to continue to keep a close eye on ways to promote innovation and research and points to its activities in building up production capacities in battery cell production and the entire battery value chain.

Other aspects

Criticism of the transposition of the EU definition of energy storage into German law

The BMWK’s view that electricity storage systems should continue to be treated as consumers or producers under energy law despite the transposition of the EU definition of energy storage into the EnWG must be seen critically. This view is not in line with the EU provision defining the activity of energy storage, and nor does it do justice to the role of electricity storage in the electricity grid because it puts electricity storage systems at risk of double charges, i.e. as producers and consumers (for example, where they have to pay grid fees, levies and surcharges for stored electricity as their “fuel”, which producers of primary energy do not have to pay). Outcomes like this are not in line with the interests involved.

Lack of technology neutrality

Overall, the electricity storage strategy lacks technology neutrality. In addition to battery storage and pumped-storage power plants, individual cases require consideration to be given to other technologies capable of storing energy in a different medium and converting it back into electricity. There is insufficient discussion of long-duration energy storage, for example.


The BMWK’s electricity storage strategy clearly demonstrates the importance it attaches to electricity storage technology for the future and also that it recognises the key issues and problem areas. However, although it focusses on the correct topics and outlines initial approaches, it currently offers only few specific measures. This also applies to the question of the precise functions storage systems should fulfil in the electricity system of the future. To date, there has been no detailed analysis of the various market segments, such as home storage systems, commercial and industrial storage systems, grid storage systems, and large-scale storage systems co-located with solar and wind parks. There may also be relevant potential in electromobility storage systems. As such, the electricity storage strategy is currently primarily a status report.

The BMWK must hone and develop its electricity storage strategy further if it is to meet the practical needs of the market and effectively promote the growth it intends to promote.