Battery Storage Projects in Germany: Grid, Planning and Contracts

Battery storage in Germany: the market and the bottleneck

Germany's electricity system needs flexibility. With rising shares of wind and solar power, prices swing more strongly within the day, negative prices occur more often and grid operators need resources to balance the system and manage congestion. Large-scale battery storage is ideally suited to these tasks, and investors have responded: project pipelines have grown far beyond what the grid can absorb in the short term. According to the transmission system operators' own statement, quoted in a 2026 decision of the Federal Network Agency, they had already issued connection commitments for around 51 GW of large battery storage, with further applications waiting in a queue.

The legal framework for battery storage has been adapted step by step: storage is now in the overriding public interest, privileged in planning law in defined locations, exempt from certain network charges for a transitional period, and subject to new grid connection procedures. At the same time, open questions remain, for example on construction cost contributions, the combination of storage with renewable plants and the future network charge regime.

This article explains the key legal building blocks for battery storage projects in Germany – grid connection, network charges, planning and permitting, revenue models and contracts – as of November 2026.

Grid connection: from first come to first ready

Grid operators must connect, among others, installations for storing electrical energy to their networks on technical and economic terms that are appropriate, non-discriminatory, transparent and no less favourable than those applied internally (§ 17(1) EnWG). They may refuse connection if they can prove that it is impossible or unreasonable for operational or other economic or technical reasons, including lack of capacity, and must then explain the reasons in text form, including on request information about the grid expansion needed (§ 17(2) EnWG).

Until 2026, capacity at transmission level was largely allocated on a first-come-first-served basis: the date of the complete application determined the queue. With hundreds of applications competing for limited connection points, this produced speculative applications and long queues.

In its decision of 6 May 2026 (BK6-25-512), the Federal Network Agency noted that a transmission system operator applied the first-come-first-served principle until 1 April 2026, and that the transmission system operators had announced a maturity-based procedure (Reifegradverfahren) for connection requests from storage facilities and large consumers, into which pending applications were to be transferred. The Agency rejected the storage developer's abuse application in that case.

The maturity-based procedure allocates available capacity in periodic rounds, based on criteria demonstrating a project's progress and value for the grid – such as land rights, planning status, financing and technical design – rather than the date of application. The federal government's 2026 grid connection package and the EEG reform bill would anchor the principle that, when capacity is scarce, grid operators may prioritise requests by planning maturity and usefulness for the grid. Developers should document project maturity carefully, monitor the procedural rules and application windows of each operator, and avoid relying on informal assurances about available capacity.

Flexible connection agreements

Where full capacity is not available, grid operators can offer flexible connection agreements that allow them to require a static or dynamic limitation of maximum withdrawal or feed-in capacity (§ 17(2b) EnWG). The agreement must regulate in particular the maximum capacity, the periods of limitation, the duration, technical requirements and the connectee's liability for exceeding limits. For storage, such agreements can be attractive if the restrictions match the operating strategy – for example limited charging at times of grid peaks.

Network charges and levies

The economics of battery storage depend heavily on network charges. Under § 118(6) EnWG, storage facilities newly built after 31 December 2008 and commissioned within 18 years from 4 August 2011 – that is, by 4 August 2029 – are exempt from network access charges on the electricity withdrawn for storage for a period of 20 years from commissioning, to the extent the stored energy is fed back into the same network. The exemption is a key part of current business cases, and projects that cannot be commissioned by the deadline face uncertainty.

The Federal Network Agency is reviewing the structure of network charges more fundamentally, including the treatment of storage and generation (the "AgNes" process), as explained in our article on network charges reform. Construction cost contributions (Baukostenzuschüsse) charged by grid operators for new connections are another significant cost item; their application to storage has been the subject of regulatory and judicial review, and developers should check the current practice of the relevant operator. Storage is also relevant for the treatment of levies and surcharges, which generally avoid double charging of stored and re-fed electricity, subject to metering and documentation requirements.

Planning law and permits

The construction and operation of energy storage facilities are in the overriding public interest and serve public health and safety; until electricity supply is almost greenhouse gas neutral, the accelerated expansion of storage should be given priority in balancing decisions, except against national and alliance defence interests (§ 11c EnWG).

In the outer area (Außenbereich), where most large projects are located, the Federal Building Code privileges battery storage in defined cases (§ 35(1) BauGB): storage serving a spatial and functional connection with an existing renewable energy installation (no. 11), and other battery storage under specific conditions, including proximity of no more than 200 metres to the boundary of a substation connecting extra-high and high voltage or similar grid infrastructure (no. 12). Projects that do not meet these criteria need a development plan or must rely on the general rules, which is slower and riskier.

Battery storage facilities themselves generally do not require an immission control permit, but they require a building permit under state building law, and fire protection, noise and water protection requirements apply. Larger facilities may need environmental assessments, and nature conservation law applies to the site. Land lease agreements must secure the site for the project's lifetime, including grid connection routes, and should be secured by registered easements to protect financing banks. Lease terms should also cover augmentation, repowering of battery modules and decommissioning obligations, which landowners and authorities increasingly ask to be backed by security.

Revenue stacking and market access

Battery storage earns money from several sources, which are combined ("stacked") over time:

• Wholesale arbitrage on day-ahead and intraday markets, charging at low prices and discharging at high prices;
• Balancing services – frequency containment reserve and automatic frequency restoration reserve – procured by the transmission system operators;
• Grid services, such as congestion management, where market-based procurement is permitted;
• Co-location benefits with solar or wind plants, shifting renewable generation to higher-price hours and reducing curtailment.

Each revenue stream has its own legal requirements: prequalification for balancing services, trading arrangements and balancing group membership for wholesale markets, and metering concepts that allow stored electricity to be correctly attributed – particularly where a battery charges from both a renewable plant and the grid, which affects eligibility for EEG payments. The rules for combined operation of storage with renewable plants have been liberalised in recent years, but they require careful metering and documentation.

Distribution-level and behind-the-meter storage

Not every project connects to the transmission grid. Many storage projects of a few to several dozen megawatts connect at high or medium voltage to distribution networks, where each distribution system operator sets its own procedures and many have introduced their own queue management or maturity criteria. Developers should obtain the operator's connection rules early and check whether a connection reservation can be secured, for how long and under which conditions it lapses.

Industrial and commercial companies increasingly install storage behind the meter to reduce peak load charges, optimise self-consumption of on-site solar power and participate in flexibility markets. For them, the key questions are different: how the storage affects their grid charges and any individual network charge arrangements, how metering must be set up to separate self-consumed and grid electricity, and whether a third-party operator or contracting model triggers obligations as an energy supplier. Customer installations and direct lines, explained in our article on direct lines and customer installations, are often part of these structures.

Home storage combined with rooftop solar is a mass market of its own, governed largely by standard grid operator terms and the EEG, but the same principles of metering and grid-supportive operation increasingly apply.

Contracts and financing

Bankable battery storage projects rest on a set of contracts:

1. Grid connection agreement and, where applicable, a flexible connection agreement;
2. EPC and supply contracts for battery systems, with performance guarantees, availability and degradation warranties and liquidated damages;
3. Long-term service agreements covering maintenance and augmentation;
4. Revenue contracts – tolling agreements in which an offtaker pays a fixed fee for using the capacity, floor agreements that guarantee a minimum revenue with upside sharing, or optimisation agreements with a route-to-market provider;
5. Land leases and easements, and insurance.

Lenders look closely at revenue certainty, technology risk and counterparty quality. Tolling and floor structures have become more common because they reduce merchant risk and support higher debt sizing. Fire safety, battery chemistry, supply chain origin and compliance with the EU Battery Regulation are increasingly part of due diligence. In acquisitions of storage projects, the grid connection status – including its rank in the maturity-based procedure – is often the most valuable and most scrutinised asset. Our article on renewable energy project M&A covers transaction structures.

How TRW & Co helps with battery storage

We advise developers, investors, lenders, utilities and industrial companies on battery storage projects in Germany. We secure grid connections and negotiate connection and flexible connection agreements, assess network charge and levy treatment, support planning and permitting, draft and negotiate EPC, service, tolling, floor and optimisation agreements, and conduct due diligence in acquisitions and financings. We also represent clients in disputes with grid operators before the Federal Network Agency and the courts. Our work connects with our grids and EnWG and renewables practices and our article on grid connection reform. Please contact us. This article is general information and not legal advice.