Key takeaways

• The BNetzA has published two new draft papers for a reorganization of the grid fee system, the implementation of which would have a significant impact on the economic environment for battery storage systems.
• First, the BNetzA intends not only to abolish avoided grid fees from 2029, but also to reduce the entitlement to these fees by 25% annually starting in 2026. For existing battery storage systems that have based their economic calculations on these funds, this sudden and abrupt change would mean a significant intervention in economic planning and calculation.
• Second, the BNetzA is planning a reorganization of the general grid fee system from 2029. According to the current draft, the storage sector would be particularly affected, especially because the BNetzA is considering abolishing the current grid fee exemption for grid connected battery storage systems.
• However, both papers are only drafts, and changes are still possible. Many questions remain unanswered, as the BNetzA is still discussing various models.

In detail

Background

The general grid fee system, as well as decisions regarding exemptions or other privileges for certain consumer groups, have so far been largely determined by the national legislature in Germany through ordinances (Verordnungen). However, in its decision of 2 September 2021 (C-718/18), the European Court of Justice declared this approach incompatible with the Electricity Directive and Gas Directive. EU law requires an autonomous role for the national regulatory authority, i.e., the BNetzA, which includes the decision on the design of the grid fee system. The national legislature unduly restricts the BNetzA's autonomy when it regulates the relevant facts itself through ordinances. Although the decision does not render the grid fee ordinances previously issued by the national legislature invalid, they must now be replaced by determinations (Festlegungen) made by the BNetzA in the future. This particularly affects the German Electricity Grid Fee Ordinance (Stromnetzentgeltverordnung, "StromNEV"), the key framework for establishing the general grid fee system. Therefore, the StromNEV will expire on 31 December 2028 and is to be replaced by one or more determinations by the BNetzA. Against this backdrop, the BNetzA initiated a determination procedure in April 2025 to phase out avoided grid fees and published its corresponding draft decision for consultation ("vNNE Draft Decision"). Additionally, in May 2025, the BNetzA initiated the procedure for determining the General Grid Fee System for the Electricity Sector ("AgNes") and published a corresponding discussion paper for consultation (the "AgNes Paper").    

Phaseout of avoided grid fees for battery storage systems

Avoided grid fees are a payment claim that the operator of a battery storage system connected to the distribution grid can assert against the distribution grid operator as compensation for the distribution grid operator having to draw less electricity from the upstream grid levels due to the feed-in from the battery storage system (Section 18 (1) StromNEV). Although the claim of battery storage system operators to avoided grid fees was already abolished for all new systems commissioned from 1 January 2023, existing storage systems still have a claim to the payment of avoided grid fees, as the Federal Court of Justice (Bundesgerichtshof) recently confirmed (see our Client Alert from April 2025 — Germany: Avoided grid fees for battery storage systems). The vNNE Draft Decision not only provides for the abolition of avoided grid fees from 1 January 2029, but starting in 2026, even the claim of battery storage systems commissioned before 1 January 2023 to avoided grid fees is to be gradually phased out. These claims will be reduced by 25% in 2026, 50% in 2027 and 75% in 2028. According to the BNetzA, this is intended to relieve other grid users, which bear the costs of avoided grid fees through general grid fees.

Abolition of grid fee exemption for battery storage systems

According to the concept of the StromNEV, i.e., the currently applicable grid fee system, only consumers bear the costs for the use of the grid. In contrast, no grid fees are payable for feeding electricity into the grid. In the AgNes Paper, the BNetzA clarifies that it no longer considers this system to be up-to-date, especially in light of the decentralization of electricity generation due to the energy transition. Therefore, in the AgNes Paper, it presents various proposals for redesigning the grid fee system, which it reviews and puts up for further discussion (e.g., grid fees for the feed-in of electricity; changes to price elements such as replacing the demand fee (Leistungspreis) with a capacity price (Kapazitätspreis); dynamic grid fees; nationwide grid fees). Additionally, the BNetzA addresses the question of how the future grid fee regime for mobile and stationary storage systems should be structured. Although the BNetzA initially emphasizes the important contribution of storage systems to the security of supply and the avoidance of excessive price fluctuations, the BNetzA clarifies that the grid fee privileges for a large proportion of storage systems — in particular the exemption of grid-connected electricity storage systems from grid fees — are not appropriate in its view. It cites several reasons for this:    

• Privileged storage systems also use the grid, which is an economic resource that should generally incur a fee. It is doubtful whether the described positive functions of storage systems represent an adequate fee for the exemption from grid fees.
• In addition, the storage systems would not contribute to covering the grid fees, but rather result in higher grid costs for the other grid users, which would violate the principle of cost reflectivity (Kostenreflexivität).    
• The complete exemption from grid fees could also constitute discrimination against other grid users that also incur similar costs in the grid and make an equal contribution to grid relief but do not receive an exemption from grid fees. 

According to the BNetzA, in the future, a grid fee regime for storage system must be found that minimally restricts their operation in electricity and system service markets, while ensuring that storage systems also make a cost-reflective contribution to the financing of the grid. While existing systems may be able to hope for a grandfathering clause to maintain their claim to the grid fee exemption, new systems would be affected by such a reform. Without making a final decision, the BNetzA indicates clear sympathies for no longer exempting storage systems from grid fees as of 2029 and for relying more heavily on so-called flexible grid connection contracts. In these contracts, the grid operator and the storage system operator agree that the grid operator may specify the performance and operation of the storage system in the event of grid overloads. In return, the storage system operator receives a reduction in grid fees. However, even in such a case, the financial burdens for storage system operators would probably be significantly higher than today — after all, no grid fees are currently payable by grid-connected electricity storage system operators.

The impact cannot yet be quantified in terms of amount. This will depend in particular on how the BNetzA intends to design the general grid fee model in the future. If the grid fees are primarily based on the working price (Arbeitspreis), it is reasonable to assume that the provision of grid-friendly system services (Systemdienstleistungen) (e.g., provision of frequency containment reserve (Primärregelleistung)) by the grid operators may not be charged. It would at least seem contradictory if the grid operator had to charge a storage system operator for a service that the grid operator urgently needs itself. On the other hand, a grid fee model based on a basic or capacity price would mean that it is irrelevant which services the storage system actually provides, because the amount of the grid fees corresponds to the fact of the connection to the grid itself. Here, a discount solution would make sense if the storage system operator undertakes to provide system services to the grid operator. The BNetzA has not yet made a final decision on this, but it has at least stated that it does not want to make existing market models practically impossible. For example, it indicates that a working price model would not be the preferred solution for storage systems that engage in arbitrage. If a grid fee model is ultimately chosen in which generators also have to pay a grid fee for the feed-in of their electricity, the BNetzA indicates that in this case storage systems would at least not have to pay grid fees for both feed-in and feed-out, as this would constitute a double burden compared to other systems.

Contrary to other recent statements, the BNetzA now also appears to be willing to recognize the generation function of battery storage systems in principle. This could be important regarding the question of whether and to what extent storage system operators have to pay construction cost subsidies (Baukostenzuschüsse) for grid connection, since most generation plants do not have to pay construction cost subsidies. Even in the recent past, the BNetzA had strictly considered only the consumption side of battery storage systems and had generally proposed the collection of construction cost subsidies for the grid connection of battery storage systems in its latest position paper (see our Client Alert from November 2024 — Germany: Construction cost subsidies for the grid connection of battery storage systems). However, the BNetzA's statements in the AgNes Paper indicate that it no longer wants to rely more or less heavily on the instrument of construction cost subsidies in a new grid fee system.    

Analysis and impact

The abolition of avoided grid fees from 2029 is considered an acceptable measure by the two central industry associations for the storage sector, the German Energy Storage Association (Bundesverband Energiespeicher) and the German Association of Energy and Water Industries (Bundesverband der Energie- und Wasserwirtschaft, "BDEW"), as economic storage operations are regularly possible even without their payment. However, the sudden introduction of a reduction of the avoided grid fees starting next year is viewed much more critically, especially by the BDEW, but also by other industry associations such as the Association of Municipal Enterprises (Verband Kommunaler Unternehmen) and the Association of Industrial Energy Consumers (Verband der Industriellen Energie- und Kraftwirtschaft), as it represents a serious intervention in the investment and trust of storage system operators.

The storage system industry also expresses clear criticism of the AgNes Paper. There are even fears that the market ramp-up of battery storage systems could end. Even if the BNetzA would introduce a grandfathering clause for already commissioned battery storage systems, there would be increased difficulties in economically constructing and operating new storage projects.

Unfortunately, both the vNNE Draft Decision and the AgNes Paper fit into the recent line of the BNetzA, which envisages obstacles to the economic operation of battery storage systems. This is somewhat contradictory to recent court decisions that emphasized the grid-serving functions of storage systems, as well as political declarations of intent for a stronger storage system ramp-up (see our Client Alert from April 2024 — Germany: Electricity storage strategy — more flexibility and stability). In this regard, the German Federal Court of Justice judgment, expected on 15 July, on the admissibility of charging construction cost subsidies for battery storage systems is likely to be of great importance. Furthermore, the European Commission is also currently focusing more on a storage system ramp-up and recently announced that it wants to launch a package to expand energy storage system by creating more favorable conditions for their economic construction and operation. 

However, both papers are still only drafts. There is at least a chance that the BNetzA will reconsider its position in view of the clear criticism and come to a differentiated solution that takes greater account of the need for a storage system expansion and its positive effects on grid stability and the electricity market. In an initial statement, the BNetzA explained, particularly in response to the reactions to the AgNes Paper, that it is open to dialogue and that its opinions and views are changeable with good counterarguments. While the first consultation phase for the vNNE Draft Decision has already been completed, stakeholders can still submit comments on the AgNes Paper until 30 June 2025.

* * * * *

Click here to read the German version.