"It will never be profitable": 900 network operators torment Germany with storage anarchy

Energy storage systems are a crucial piece of the energy transition puzzle. They relieve pressure on the grid when there's too much electricity. They provide electricity when it's scarce. In both cases, they lower prices. The business is lucrative for the operators, and interested parties are lining up. But Germany has almost 900 different grid operators, each with its own regulations for approval and connection. They operate on a first-come, first-served basis. In many cases, they're blind. "Especially at the lowest level, many grid operators don't know what's happening," says storage expert Katharina Johannsen in ntv's "Climate Lab ." "The system has never been digitized." The result is chaos: No one knows which projects are being implemented.

ntv.de: You reported a loss of control while removing the battery . How bad is the situation on a scale of 1 to 10?

Katharina Johannsen: That depends on the project developer, the authorities, and the federal states. The biggest hurdles are the grid operators and building permits. I say: 5.

Who is responsible for this hype?

Many different players are looking to enter the storage market: on the one hand, traditional energy companies like RWE or Vattenfall, which want to balance their solar portfolios. On the other hand, players from the renewable energy sector are entering the market. These are less well-known because they don't have a retail business, but rather build solar systems – and now storage. Meanwhile, even companies that only build storage systems and have previously operated primarily abroad are looking to enter the German market.

Because the German market is becoming more lucrative?

Yes, there are a lot of requests for grid connections. The interest is huge.

At what point does loss of control occur?

In the past, municipalities easily approved storage facilities as privileged power plants. Due to the high number of requests, some are now concerned that storage facilities will be built everywhere. They want to regain control with their own development plan. However, this complicates the approval process.

Why are network operators a major hurdle?

Because there are so many: The four major transmission system operators , Amprion, 50 Hertz, Tennet, and TransnetBW, are responsible for operating the vast power lines. In addition, there are almost 900 distribution system operators at the regional level. All of them receive grid connection requests, so: Can I operate a storage facility on your grid?

900?

Yes, to put it bluntly, even the smallest village has its own distribution grid operator. Many are open to requests, but even in these cases, connecting to the grid is a challenge. When asked about the current status, sometimes months pass without a response. The smallest grid operators, in particular, generally treat requests with skepticism because they don't know how the storage systems will perform. There are also complaints that requests are simply dismissed or that the storage system can only be connected if it isn't feeding any electricity between 9 a.m. and 5 p.m.

What are people worried about? Energy storage doesn't do any harm.

Traditionally, we had many large power plants in Germany. They based their electricity generation on consumption. Renewable energies vary, but even there, with a good weather model, you can already tell: tomorrow we'll have so many gigawatts of solar and so many gigawatts of wind. This allows you to plan accordingly. Storage systems are not based on the weather, but on prices.

That's the advantage: storage systems are not dependent on sunshine and wind.

Yes, but in Germany there is only one huge electricity price zone. And the needs of the electricity market are not the same as those of the grid. It can happen that the sun shines and consumption is low . Then electricity prices fall, and the storage systems are charged. But the sun doesn't have to shine in every corner of Germany. There, the storage systems suddenly draw power from the grid, and the grid operators have to counteract it . The opposite can also happen: The storage systems feed in electricity at midday, even though the grid is already full. This is why the grid operators are concerned about security of supply.

A technology that works smoothly in California, for example, brings so much complexity to the German electricity system that smaller distribution system operators say: oh no, better not.

Everyone knows that battery storage is enormously important for the electricity system. The question is: How do you integrate it into the grid? There's a lot of regulatory uncertainty in this area. Especially at the lowest levels, many distribution system operators don't even know what's happening in their grid. They're practically blind because the system has never been digitized.

Didn’t anyone see the energy transition coming?

Network operators are natural monopolies without competition and without pressure. Regulatory thumbscrews would likely have helped.

Even now?

Storage facilities have made it into the coalition agreement, which is an important step. However, this hype exists because renewable energies are highly volatile. This is why you see huge price differences on the market within a single day. Electricity might be free at midday, but in the evening it costs €200 per megawatt hour, or 20 cents per kilowatt hour.

If you charge your electric car and storage unit at midday, you save money and at the same time stabilize the grid by using excess electricity.

That would be great, but it's more complicated for home storage systems than for large-scale storage systems operated by retail companies. In general, there are too few incentives to be flexible in charging and consumption. This is why the Federal Network Agency is discussing flexible grid fees . Another option is for storage systems to also pay grid fees in the future to unite the market and the grid. In any case, a solution to the north-south bottleneck is needed: Every time a lot of wind power is generated in the north, storage systems in southern Germany want to be charged – and even more electricity than is already being transported southward.

The bottleneck is getting bigger and more and more power lines have to be built?

Yes. But it's not all bad. 50 Hertz alone has already committed to connecting 12 gigawatts of battery storage. That's a lot.

What is the biggest problem right now?

Almost all stakeholders agree that the grid connection process needs reform. Currently, project developers are applying for connection to multiple grid operators, even though only one storage facility is involved. These requests are not even uniform, as each grid operator determines its own process. Price differences also exist. Last October, the major transmission system operators alone received grid connection requests for 161 gigawatts . This number has now risen to 200 to 300 gigawatts.

They all want a grid connection?

Yes. Germany's peak load is 80 gigawatts. So there are far more storage requests than we consume. It will never be profitable; batteries cannibalize each other: even the second one earns less than the first. We don't need that many storage units, and that many aren't being built. But nobody knows which projects will actually be implemented.

But are these serious inquiries?

This is difficult to assess. Grid operators say that some developers submit up to ten applications per project. This is also due to the first-come, first-served principle: The grid operators must process the requests one after the other.

First come, first served? That sounds like anarchy...

It would be enormously helpful if the grid operators could decide on the requests in a consolidated manner: There are ten requests for this project because ten locations are eligible. It's a good fit here, so the contract has been awarded. The other nine requests are therefore rejected. One could also simply put popular locations like substations out to tender and thus consolidate the requests.

Are we in danger of slowing down the energy transition? In principle, storage is urgently needed.

Every new storage facility is good. However, the authorities and grid operators need to get their act together and ensure that processes are improved and things move faster. I'm a positive person. I expect it will work.

Clara Pfeffer and Christian Herrmann spoke with Katharina Johannsen. The conversation has been shortened and edited for clarity. You can listen to the full interview in the "Klima-Labor" podcast.