Importance of battery storage in Germany’s solar goals

Germany’s renewable energy sector, especially solar, is growing rapidly. As of mid-2024, solar installed capacity has reached 90GW and is expected to exceed 100GW by 2025, but the pace of development needs to accelerate to achieve the goal of reaching 215GW by 2030. However, developers are facing low energy prices and increasingly common negative electricity prices, which affect their profits.

To meet these challenges, many new solar parks have begun to plan to build battery energy storage systems (BESS). BESS can delay the release of electricity to the grid and wait until the best price is sold before selling electricity, thereby increasing revenue. In addition, it can participate in grid ancillary services to generate further revenue. About 80% of new solar power plants are considering installing BESS.

However, the construction of BESS faces some legal challenges. At present, Germany’s BESS approval process is not clear enough. Developers need to obtain approval through building permits or the Energy Industry Act, but whether the specific approval is smooth depends on the attitude of local governments. In addition, BESS projects may also be required to pay subsidies for the construction costs.

In contrast, the UK’s BESS market is three to five years ahead of Germany, and experience shows that grid access is critical to the economic viability of projects. Currently, there are more than 800 BESS projects in the UK, but many projects will not be connected to the grid until the 2030s, and developers face huge challenges. As more projects compete for grid access, prices in the UK’s ancillary services market have fallen, resulting in reduced revenue for BESS.

German developers can learn lessons from the UK’s experience, especially to ensure that projects can be smoothly connected to the grid and relevant legal uncertainties are resolved as soon as possible. Although Germany currently faces challenges in BESS projects, as the government increases its support, battery energy storage systems will become an important pillar of energy transformation in the future.