Key Changes in Battery Storage Design Criteria

Executive summary

In the AgNes process conducted by the Federal Network Agency (Bundesnetzagentur), grid fees are increasingly being re‑thought along their financing and incentive functions. This shift will have a significant impact on the economic viability of battery energy storage systems (BESS) in commercial and industrial applications—depending on which levers (e.g. atypical grid usage/peak shaving, market-based revenues) are embedded in the business case.

A familiar picture from practice

A battery storage project is well calculated, the business case is solid—supported by peak shaving, atypical grid usage and a temporary exemption from grid fees. Technically, everything works; market participation is plausible; profitability looks convincing. But this is exactly the point where caution is required.

With the AgNes process of the Federal Network Agency, the future logic of grid fees is coming into sharper focus—and with it the question of how robust today’s assumptions for storage projects really are.

At its core, this is not about a single new rule, but about a fundamental shift in thinking: in the future, grid fees are intended to more clearly distinguish between their financing function and their incentive function. What may sound abstract can have very concrete implications for battery storage projects—depending on which levers dominate the business case.

Context: Where does the AgNes topic come from?

AgNes is the determination procedure of the Federal Network Agency for the future General Grid Fee System for Electricity (GBK25‑011#3). Its aim is to further develop the structure and logic of grid fees and adapt them to an increasingly flexible, renewable-based electricity system. Not only traditional end consumers are addressed, but explicitly also special cases such as electricity storage systems.

The orientation papers and accompanying assessments published so far reveal a clear guiding principle: in the future, grid fees should more cleanly differentiate between fees that primarily serve to finance grid costs and those intended as incentives to encourage grid‑supportive behavior—for example through time‑variable or dynamic signals.

It is important to note that AgNes is not a finalized legal act, but an ongoing process involving consultations and expert dialogue. While the direction is becoming clearer, many detailed questions still depend on further determinations and later practical implementation.

Why does AgNes already affect battery storage today?

From a billing perspective, battery storage systems are a special case. Depending on their operating mode, they appear as grid consumers when charging and feed energy back into the grid when discharging. If treated like conventional consumers, this would result in a double burden of grid fees—with significant consequences for economic viability.

This is precisely why the orientation papers and related analyses emphasize that the future design of grid fees should not indiscriminately “strangle” arbitrage, flexibility marketing and system services.

However, with the planned redesign of grid fees for industrial and commercial customers—shifting away from peak demand pricing toward flat charges—a business case based on atypical grid usage or peak shaving can no longer be considered robust.

At the same time, it is undisputed that storage systems are expected to contribute to grid financing in the future. This tension forms the core of the current debate.

Status quo: Which rules currently apply?

1) Temporary grid fee exemption pursuant to Section 118 (6) EnWG

In many profitability calculations, the temporary grid fee exemption under Section 118 (6) of the German Energy Industry Act (EnWG) is a central component. Under certain conditions, it allows an exemption from grid fees for electricity used for storage, provided there is a clear link to storage and time‑shifted re‑feed into the grid. In practice, the commissioning deadline—often referenced as August 2029 in many documents—is also relevant.

However, this regulation is explicitly temporary and therefore, by definition, not a sustainable foundation for long‑term business models.

2) Atypical grid usage (Section 19 (2) StromNEV)

A frequently used additional lever is atypical grid usage. It aims to deliberately use the grid outside peak load time windows in order to reduce the annual capacity charge. In practice, this requires meeting clearly defined criteria, such as materiality thresholds and verifiable reductions during peak load periods.

What must be kept in mind: requirements and grid fees can change significantly from year to year, and a redesign of atypical grid usage rules is also planned. Accordingly, atypical effects should not be treated as a guaranteed cornerstone of a business case.

3) Individual grid fees for storage systems (Section 19 (4) StromNEV)

As an alternative or supplement, Section 19 (4) StromNEV can be considered. The logic described there focuses on storage losses: energy‑based charges are waived, and instead an individual grid fee is levied only on the portion of electricity that is not fed back into the grid. Grid operators’ price sheets reflect this basic concept—making the proof of losses a key issue. In other words: pay close attention to the metering concept.

What is emerging: Financing vs. incentive function

In the future, storage systems are expected to contribute in principle to grid financing, while mechanisms should be designed in such a way that economically viable storage applications are not broadly disadvantaged.

A recurring idea is to apply energy‑based grid fees with a financing function to storage systems only to net energy volumes—or essentially to storage losses. This is intended to prevent the “back‑and‑forth” of energy during charging and discharging from being priced twice.

At the same time, the incentive function is increasingly being discussed in the form of dynamic or time‑variable signals to specifically promote grid‑supportive behavior. Protection of legitimate expectations also needs to be considered, particularly with regard to a viable follow‑up logic once the current exemption rules expire.

Practice: Which business‑case assumptions may now be at risk?

1) Single‑lever cases are riskier

Typically, storage systems are evaluated based on multiple benefit and revenue components: self‑consumption, peak shaving, atypical grid usage, arbitrage or system services. At the same time, atypical requirements and grid fees can fluctuate. Business cases that rely heavily on a single lever are therefore particularly sensitive. Independent advice is key here—business cases provided by suppliers should not always be taken at face value.

2) Cumulative effects of grid fees and grid restrictions

Analyses show that grid fees have a substantial impact on the profitability of BESS—especially when combined with connection restrictions such as flexible grid connection agreements (FCA). Different grid fee levels and FCA‑related revenue losses interact and directly affect key performance indicators. This must be taken into account.

3) Sizing as a hedge against regime changes

It is essential to carry out honest scenario analyses with and without atypical usage, and with and without arbitrage. The goal is to identify a storage size that remains economically viable under different assumptions. Changes in grid fees or atypical rules then have an impact, but do not automatically jeopardize overall profitability.

Conclusion

AgNes is not a “game over” for battery storage—but it is a clear indication that simplistic optimization logics are reaching their limits. The future separation of financing and incentive functions in grid fees will change storage projects, but not necessarily worsen them. What matters most is how robust the underlying assumptions are.

Those who structure storage projects today solely around individual regulatory advantages are taking an unnecessary risk. Projects that combine multiple revenue streams, calculate conservatively and explicitly incorporate grid fees into scenario analyses are far better positioned. As further determinations in the AgNes process clarify the direction, developers and operators should closely monitor developments, regularly review business cases—and design storage systems not for maximum, but for sustainable profitability.

Disclaimer: This article reflects our practical experience and does not replace legal or project‑specific technical advice. Requirements and framework conditions may vary depending on the grid operator, grid level and mode of operation.