However, the content of the Position Paper did not turn out to be the hoped-for relief for the battery storage system industry — on the contrary, battery storage system operators now face the risk that grid operators will charge even higher construction cost subsidies for the connection of battery storage systems in the future. In addition, the Position Paper is also likely to lead to further legal uncertainty for the time being, as it appears questionable if its construction cost subsidy requirement and standards for battery storage systems are at all lawful or whether a new reform is required; this is likely to depend on an upcoming decision by the Federal Court of Justice (Bundesgerichtshof). Overall, the BNetzA's Position Paper unfortunately misses the opportunity to find a balanced, legally secure solution that promotes the battery storage system expansion.
Key takeaways
- BNetzA still does not seriously recognize the system and grid usefulness of the expansion of battery storage systems and insists on their equal treatment with other end consumers (Letztverbraucher).
- There are concerns that grid operators will frequently demand higher construction cost subsidies for the grid connection of battery storage systems in the future than has been the case to date.
- The legal uncertainties regarding the charging of construction cost subsidies for battery storage systems remain (for the time being), as it is questionable whether the Position Paper is compatible with the requirements of case law — an imminent decision by the Federal Court of Justice must be awaited here.
- Therefore, it is possible that due to the Position Paper, construction cost subsidies will become an even greater obstacle to the expansion of battery storage systems.
In depth
Background
The previous practice
The recently published Position Paper builds on a first position paper on the same topic published by the BNetzA in 2009. This earlier paper envisaged charging construction cost subsidies above low voltage based on the so-called capacity price model (Leistungspreismodell), whereby many questions — particularly with regard to charging construction cost subsidies for battery storage systems — were not conclusively clarified. Accordingly, the practice of charging construction cost subsidies for battery storage systems also varied between the different grid operators. In some cases, they refrained from charging construction cost subsidies; in others, they charged them based on the capacity price model, or the grid operators opted for intermediate solutions.
The current decision of the Higher Regional Court of Düsseldorf
Against the decision of a grid operator to charge a construction cost subsidy for the connection of a battery storage system based on the capacity price model, a storage system operator recently took legal action. On 20 December 2023, the Higher Regional Court of Düsseldorf ruled in the battery storage system operator's favor: Charging construction cost subsidies based on the capacity price model for battery storage systems is unlawful, as this would disregard the differences in grid capacity usage between "normal" end consumers and battery storage systems — which not only draw energy from the grid but also feed energy into it. The Higher Regional Court of Düsseldorf left open the question of whether — and if so, how — construction cost subsidies may be charged for battery storage systems for grid connections above low voltage. However, the general direction of the ruling was in any case favorable for the battery storage system industry. The Higher Regional Court of Düsseldorf recognized, at least in principle, the grid and system usefulness of battery storage systems and called on the BNetzA and grid operators to consider this when charging construction cost subsidies. All in all, the ruling suggests that the lawful levying of construction cost subsidies will only be permissible in the future at lower amounts than under the capacity price model, if at all.
However, the BNetzA did not accept the decision of the Higher Regional Court of Düsseldorf and filed an appeal with the Federal Court of Justice. A decision by the Federal Court of Justice can be expected in a few months. It remains to be seen whether it upholds the decision of the Higher Regional Court of Düsseldorf or takes a different approach.
The Position Paper
Against this background, the BNetzA has now issued its new Position Paper.
Area of application
Like its predecessor in 2009, the Position Paper applies not only to the connection of battery storage systems but to the connection of all consumption systems. As charging construction cost subsidies at the low-voltage level is regulated by law, the Position Paper, like its predecessor, refers to the charging of construction cost subsidies for connection to grid levels above low voltage. In particular, this means that larger battery storage facilities are covered as these are generally connected above the low-voltage level.
According to the BNetzA, the updated guidelines from the Position Paper will not apply to contracts concluded in the past or grid connection agreements that were already negotiated under the impression of the situation before the Position Paper was issued and will be concluded in the near future.
Continuation of the capacity price model
In the Position Paper, the BNetzA once again advocates the capacity price model as the basis for calculating the construction cost subsidies, irrespective of the decision by the Higher Regional Court of Düsseldorf. In principle, the ordered connected load (bestellte Anschlussleistung) multiplied by the average capacity price (Leistungspreis) of the last five years should continue to be decisive for the amount of the construction cost subsidies. In addition — and complicating matters for the battery storage sector — the BNetzA now also expressly clarifies that this should apply regardless of the type of load connected and, therefore, accordingly for the grid connection of battery storage systems. Therefore, contrary to the decision of the Higher Regional Court of Düsseldorf, the BNetzA is against considering their grid-serving functions and treats them like any other end consumer.
Differentiation options at the transmission grid level
Based on this, the Position Paper allows the transmission system operators (TSOs) to make further differentiations at the transmission grid level with regard to the level of the construction cost subsidies. The TSOs can differentiate between five levels, with the highest level corresponding to the full construction cost subsidy amount according to the capacity price model and the lowest level corresponding to a construction cost subsidy of 20% of the amount calculated according to the capacity price model. The level at which the construction cost subsidy is charged will be determined according to whether the settlement makes sense with regard to the overall grid system. In practice, this is intended to control the location of new consumption facilities by making it more favorable to install them in areas where there is a lower risk of grid congestion or a lower need or costs for grid expansion. According to the BNetzA, there should also be the possibility of a lower construction cost subsidy if, for example, there is an oversupply of electricity at a location and an electrolyser is built at this location. This could also be transferable to battery storage systems, with the result that the TSOs could also apply a lower level for the construction cost subsidy amount for battery storage systems at such locations, i.e., the construction cost subsidies do not have to be charged in the full amount calculated according to the capacity price model. However, the BNetzA rules out the possibility of not charging a construction cost subsidy at all. Overall, it remains to be seen how the TSOs will deal with these requirements in the future and what amount they will charge for the construction cost subsidies for the grid connection of battery storage systems.
No differentiation options at the distribution grid level
However, at the distribution grid level, such differentiation should not be possible; instead, the BNetzA is of the opinion that, at least initially, the construction cost subsidies should be charged uniformly by the distribution grid operator from all consumers inquiring grid connection above low voltage, without geographical or other differentiation.
Conclusion
Although the Position Paper is not legally binding, it is likely to have considerable practical significance, as it can be assumed that grid operators will base their decision regarding charging construction cost subsidies on it in the future. As a result, higher costs for the grid connection of battery storage systems are likely to be incurred in many places in the future. Therefore, it is feared that the Position Paper will slow down the urgently needed expansion of battery storage systems. Accordingly, the industry associations Bundesverband Energiespeicher Systeme (BVES) and Bundesverband Solarwirtschaft (BSW Solar), among others, have been extremely critical of the Position Paper.
As the Position Paper, with its one-sided view of the consumer side of battery storage systems, is also unlikely to be compatible with the standards formulated by the Higher Regional Court of Düsseldorf for the levying of construction cost subsidies for battery storage systems, the longevity of the Position Paper appears questionable. If the Federal Court of Justice confirms the decision of the Higher Regional Court of Düsseldorf, a different regulation or practice will likely be required for battery storage systems. With regard to construction cost subsidies paid up to that point in accordance with the Position Paper, it may be necessary to reverse the payment or storage operators may be entitled to claim damages. These legal uncertainties are also unlikely to be conducive to the needed rapid expansion and connection of storage facilities to the grid. Therefore, for the time being, storage operators should continue to only pay construction cost subsidies under the condition of its lawfulness (Zahlung unter Vorbehalt).
*Nico Ruepp, Law Clerk, has contributed to this legal update.
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