{"id":154681,"date":"2025-06-03T11:35:09","date_gmt":"2025-06-03T11:35:09","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/154681\/"},"modified":"2025-06-03T11:35:09","modified_gmt":"2025-06-03T11:35:09","slug":"regulation-threatens-eus-hottest-energy-storage-market","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/154681\/","title":{"rendered":"Regulation threatens EU’s hottest energy storage market"},"content":{"rendered":"

The event is co-located with Solar Media parent company Informa\u2019s Battery Show Europe 2025<\/a>, and the two events run side by side for three days, bringing together European upstream battery and downstream energy storage industry executives.<\/p>\n

Executives from Aurora Energy Research, system integrator Fluence and developers Harmony Energy and Kyon Energy sat on Day One\u2019s keynote panel to discuss the current and future regulatory environment for large-scale energy storage. <\/p>\n

How difficult is it? <\/p>\n

After panellists were asked to give their \u2018ratings\u2019 of Germany\u2019s current regulatory environment, Benedikt Deuchert, head of business development and regulatory affairs for Kyon Energy, kicked things off by defending his rating, which was higher than those of fellow panellists, Harmony\u2019s Germany executive director Stefan Tait and Fluence growth manager Tobias Nitsch.<\/p>\n

\u201cIt\u2019s regularly described as the hottest market in Europe, so it would be strange if the regulatory landscape was so bad? It works nicely within the current environment. Of course, there\u2019s some trouble ahead but projects making it to market now have it good,\u201d Deutchert said. <\/p>\n

Tait responded with an overview of some of the big challenges: \u201cI feel frustration, we\u2019ve been in the market for two years. Grid connection, permitting are still huge topics. It\u2019s frustrating to not get replies or wait a year to get a response to grid connection requests.\u201d <\/p>\n

The \u2018discriminatory\u2019 BKZ <\/p>\n

The first big topic of discussion was the BKZ. This is a fee that battery energy storage system (BESS) developers and other big resources that can draw power from the grid must pay distribution system operators (DSOs) before or during construction to compensate for the grid infrastructure they require.<\/p>\n

Some DSOs don\u2019t charge one, others charge as high as \u20ac140 (US$160) per kW, and Aurora calculated that it can reduce the internal rate of return (IRR) for a BESS project by up to four percentage points, said moderator Philipp Hesel, principal at the research firm.<\/p>\n

Kyon has actually gone to court to protest the BKZ for discrimination, for a third time, arguing that BESS assets are comparable to legacy power plants (which don\u2019t pay) and BESS\u2019 load patterns are not like conventional consumer demand. Deuchert couldn\u2019t discuss the proceedings, for which a decision will come in mid-July, but explained why the company had done it.<\/p>\n

\u201cWe\u2019re waiting for result, it won\u2019t be an easy one. We succeeded in the second instance, but not a guarantee we\u2019ll win in the third,\u201d he said. <\/p>\n

\u201cOur claim is that storage is mostly comparable to existing power plants like gas and coal, and they don\u2019t pay the BKZ. We are also load, but our load is different to other load. It is reactive only to the prices. It behaves in a way that means it should not pay for usage of that infrastructure.\u201d <\/p>\n

Harmony\u2019s Tait explained how the BKZ had affected development: \u201cDevelopers would initially look for a low BKZ area, then the battery prices dropped and business case looked better. Then there was a feeling that the BKZ would change anyway so it became less of a factor.\u201d<\/p>\n

\u201cAn issue we are facing is early down payments for the BKZ, sometimes as high as 20%. That\u2019s \u20ac5 million for a 300MW system, in mid-development. Maybe an oil and gas major can pay that, but not smaller players like us.\u201d <\/p>\n

Grid fees and flexible connections: good in principle but risky in practice<\/p>\n

BESS projects in Germany built by 2029 are temporarily exempted from grid fees for charging and discharging, but many agree that a long-term solution is needed. As reported by Energy-Storage.news recently, industry regulator Bundesnetzagentur released a discussion paper around the need, and proposals, for a long-term reform of grid fees<\/a>.<\/p>\n

Hesel raised the topic of flexible grid connections, something many say can offer a solution to the issue of charging storage to charge and discharge from the grid, by limiting when it can do so in return for lower fees. <\/p>\n

Fluence\u2019s Nitsch said in principle it was good but often worked against storage: \u201cGenerally it should be good for storage. But currently, the way it is being applied is not that favourable to storage. There are very vague or crude definitions of \u2018grid friendliness\u2019 being applied. One DSO in Bavaria said it meant that BESS cannot discharge from 7am-5pm, all year. Many DSOs dont know what grid friendly means. How storage can help the grid changes day to day.\u201d <\/p>\n

Discussing the paper, Tait and Deuchert said aspects of it were positive but mostly it was concerning for those developing in Germany. <\/p>\n

\u201cThe operator is saying we need to change the way we finance the costs of maintaining a stable grid, and they put out some options. Reading the paper I feel a tone saying that storage is a burden, it\u2019s a cost and it needs to pay its way.\u201d<\/p>\n

\u201cThe proposals seem to be about restricting batteries, but it should be about incentivising certain behaviour, and better integrating batteries into the grid operators systems.\u201d<\/p>\n

Deuchert agreed: \u201cThe paper creates lots of risks for the business case. The grid tariff exemption for projects built before 2029 provided for the current storage buildout. I agree that storage seems to be seen as a threat to the system.\u201d<\/p>\n

\u201cFlexible connection agreements might limit the problem, but wont unlock the potential of the battery.\u201d<\/p>\n

The capacity market (CM) also came up but we will save those comments for a separate article, following a session dedicated to the CM this afternoon.<\/p>\n","protected":false},"excerpt":{"rendered":"The event is co-located with Solar Media parent company Informa\u2019s Battery Show Europe 2025, and the two events…\n","protected":false},"author":2,"featured_media":154682,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5310],"tags":[12585,15900,2000,299,1824,65767,34066,2444],"class_list":{"0":"post-154681","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-germany","8":"tag-developers","9":"tag-energystorageeurope","10":"tag-eu","11":"tag-europe","12":"tag-germany","13":"tag-grid-fees","14":"tag-reform","15":"tag-regulatory"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114619228046596775","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/154681","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=154681"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/154681\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/154682"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=154681"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=154681"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=154681"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}