Published on: December 11, 2024 / Update from: December 12, 2024 - Author: Konrad Wolfenstein
Potential untapped? New opportunities for solar power owners, especially in winter: Why Germany's energy storage systems could do more - Image: Xpert.Digital
Planned EnWG amendment: A milestone for energy storage in Germany
Status quo of energy storage in Germany
There are currently around 1.6 million stationary energy storage devices in Germany, which together have a total installed capacity of around 13 gigawatts. These storage systems are primarily used to temporarily store solar power from private photovoltaic systems in order to use it at different times in your own household. However, their enormous potential remains largely untapped. A planned amendment to the Energy Industry Act (EnWG) could bring about a decisive change here by creating new legal opportunities for the more flexible use and marketing of energy storage devices. However, given the political situation, it is uncertain whether this change in the law will be implemented before the next federal election. Nevertheless, the announcement of the amendment triggers great hopes among many players in the energy industry.
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Planned changes and their effects
The planned changes are particularly aimed at reducing legal hurdles that have previously limited the wider use of energy storage.
Especially in winter , when your own energy production through photovoltaic systems is lower and the need for electricity increases, it makes sense to use energy storage more efficiently and, for example, to use cheaper night-time electricity.
Until now, it was primarily the concern about maintaining EEG funding that prevented operators from storing more than just the green electricity generated from their own photovoltaic system in their storage system. For example, anyone who wants to bring night-time electricity into their homes from cheap wind power surpluses or wants to feed surplus solar power into the grid when the prices are particularly attractive has so far encountered complex restrictions. The amendment should now allow temporarily stored grid electricity to be fed back into the public power grid without losing eligibility for EEG funding. For this purpose, a simplified measurement and billing concept is proposed, which is based on a flat-rate remuneration. Specifically, there is talk that up to 300 kWh per kWpeak and year could be reimbursed at a flat rate in order to simplify billing for operators and energy suppliers alike. This measure is intended to create incentives to better integrate storage capacities into the electricity market in order to support a more stable supply and further advance the integration of renewable energies.
Advantages of market integration of storage systems
The possible benefits are many. Through the targeted integration of storage systems into the market, it could be possible to smooth out load peaks in the network, increase self-consumption of renewable energies and thus contribute to more efficient use of resources. It is conceivable that in the future, homeowners will not only use the solar power they generate themselves more flexibly, but also feed it into the grid for a fee during periods of high demand. This would change the role of private storage from purely passive interim storage to an active element in the electricity system. The idea behind it is: the more decentralized storage systems take part in this flexibility participation, the more stable and cost-effective the entire electricity system can be operated.
Challenges in implementation
However, there are numerous challenges that must be taken into account during concrete implementation. A key concern relates to the lifespan of storage systems. More frequent use for market activities could potentially lead to more charge and discharge cycles, which in turn impacts battery life. Many battery systems currently in use are designed for around 3,000 to 5,000 charging cycles. If the frequency of the cycles is significantly increased, this could shorten the service life and thus question the economic viability for the operators. Technological advances in battery research and new storage chemistries, such as those based on sodium ions or solid-state technologies, could alleviate this problem in the future, but at this point there remains some uncertainty.
Another sticking point is the technical implementation and measurement. Although a flat-rate compensation model is proposed, the exact distinction between locally generated solar power and power taken from the grid is not trivial. Especially if household consumption fluctuates or several production and consumption units are linked to one another. Smart measuring systems, so-called smart meter gateways, are intended to remedy this and provide the necessary data basis. However, this creates new costs that would initially have to be borne by operators. It is important here that the amendment to the law creates practical regulations so that the effort for individual households remains justifiable and no excessive investments are necessary. The aim is to make it as uncomplicated as possible to start active electricity trading without overburdening operators with complex billing and measurement techniques.
New business models and economic perspectives
From an economic perspective, the amendment could lead to a new business model for private households. Instead of just concentrating on saving electricity costs, they could now generate revenue by providing flexibly available services. Theoretically, homeowners could use their storage systems to participate in the so-called balancing energy market if appropriate aggregators or service providers bundle these capacities and make them available for network stability. This would create a broader range of sources of income: In addition to the classic feed-in tariff for PV electricity, there would also be remuneration for the balancing energy provided or short-term grid relief. In this context, the sentence “Energy storage will become the backbone of decentralized energy supply” could prove to be true in the future. Such a model would place the energy transition on a broader social basis, because then households would not only be consumers, but also active designers of the energy system.
Political and economic uncertainties
At the same time, however, it cannot be denied that the envisaged change in the law is accompanied by political uncertainty. Approval of such an amendment is not only a question of technical feasibility, but also a political show of strength. The Federal Minister of Economics has already signaled that he is aiming for rapid implementation. The ministry said: “We must act now to exploit the full potential of energy storage and to ensure security of supply in a dynamic energy world.” But whether this will actually be achieved before the next federal election depends on the domestic political mood and the tense situation Majority conditions are by no means certain. The political situation is tense, also because the energy transition affects a variety of interests - from citizens' initiatives and industry to network operators and energy suppliers. There are also long-term energy and climate policy goals in the background: Germany wants to significantly reduce its greenhouse gas emissions in order to meet international obligations and European climate goals. Storage plays a key role in this as it helps to balance out fluctuating renewable feed-in.
Costs for operators and technology requirements
Quick clarity is also desirable from an economic perspective. Only if investors and operators know under what conditions they will be able to operate and market their storage systems in the future will they make the appropriate investments. On the other hand, a hasty legislative proposal carries the risk of introducing immature regulations that will have to be improved afterwards. It is important to keep an eye on both the short-term feasibility and the long-term sustainability of the regulations. Nobody wants constant adjustments and legal uncertainties that could undermine trust in the young market for storage technologies.
The question of what costs arise when introducing new measurement technology and how these are distributed is particularly sensitive. If operators of photovoltaic systems or private storage systems do not recognize the benefits, they will hardly be willing to install expensive measurement and control technology. It is important to find a balance here: on the one hand, the regulations should be as simple as possible in order to make participation in the market attractive for laypeople. On the other hand, a certain technological standard is necessary to avoid misuse and incorrect billing. This could mean introducing simplified standard models that do not require highly complex measurement technology, for example by making statistical generalizations or introducing certain limit values below which no complex measurement regime is necessary.
European context and long-term vision
Another aspect that is often overlooked is the role of energy storage in the European integration of energy markets. Germany is part of the European electricity network, and as the energy markets become increasingly internationalized and harmonized, domestic storage systems could become relevant not only for German but also for European electricity trading in the long term. Flexibilities can theoretically be marketed across borders if the regulatory conditions allow this. This raises new questions, such as the harmonization of standards, the avoidance of double taxation and the consideration of different national funding regimes. A sustainable amendment to the EnWG should therefore not only take the national environment into account, but also the European context.
Potential and significance of the planned EnWG amendment
If a workable compromise can be found, the change in the law could become a catalyst for a new era in energy use. Instead of just passively purchasing electricity, households would become active market participants who contribute to grid stability through intelligent control of their storage systems. In the medium term, this could lead to the development of new business models in which service providers sell bundled storage services to network operators or industrial companies. Industry itself could also benefit from decentralized storage capacities, for example by making production processes more flexible in order to avoid load peaks. The social and economic effects would be significant: If we succeed in leveraging this potential, the energy transition could become more cost-effective, more resilient and therefore more acceptable to broad sections of the population.
Of course, it remains to be seen whether and in what form the planned amendment will come into force. But the discussion is already having a signal effect today: it shows that energy storage is no longer just seen as a technical accessory to solar systems, but as an essential component of a sustainable energy system based on renewable energies. The future of energy supply lies in flexible, decentralized structures in which storage plays a key role. “Energy storage is the key to controlling the volatile feed-in of renewable energies and accelerating the transition to a climate-neutral energy supply,” according to some industry experts. If we succeed in bridging the gap between politics, technology and business, this vision will become reality more quickly than many people still expect.
The amendment to the Energy Industry Act therefore appears to be a strategically important signal in a phase in which the energy system is reinventing itself. Technological, regulatory and economic hurdles undoubtedly exist, but the opportunities outweigh them from many perspectives. Intelligent, flexible use of storage could make the German energy system more resilient, efficient and sustainable - and thus set an example for other countries that have to overcome similar challenges on their way to greater climate protection and security of supply. In short: The amendment is not just a footnote in the legal gazette, but potentially a milestone in the history of the German energy transition.
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