Study warns of regulatory patchwork for battery storage systems

13.05.2026

Source: E & M powernews

The sensible integration of battery storage systems into the electricity grid is one of the major challenges of the energy transition. The consulting firm Neon has now published a study on this topic.

How can battery storage systems play to their strengths - fast switching capability and high performance - and reduce the negative effects of storage operation, such as the intensification of grid bottlenecks? And under what conditions can operators make optimal investment and deployment decisions? These are the questions addressed in the study "Regulation of batteries in the transmission grid" by the consulting firm Neon Neue Energieökonomik on behalf of the battery manufacturer Eco Stor.

The study warns that the parallel development of different specifications for battery storage systems by grid operators, the Federal Network Agency and the German government could lead to contradictions and rising project financing costs: "The current discussions show that we urgently need a consistent regulatory framework for large-scale storage systems," says Anselm Eicke, Partner at Neon and one of the authors of the study alongside Alexander Neef and Lion Hirth. "Without a coordinated overall concept, there is a risk of a regulatory patchwork of grid fees, connection requirements and operating restrictions, which will make investments massively more difficult and the energy transition more expensive."

The authors identify four key challenges for the grid integration of battery storage systems: foreseeable grid bottlenecks, short-term grid bottlenecks, effects on frequency stability and the politically desired contribution of storage systems to grid financing. Short-term grid bottlenecks that could be triggered by intraday trading or the use of balancing energy are particularly critical. The existing redispatch process is often too slow for this.

Incentives for targeted storage and withdrawal

Neon recommends dynamic grid fees with regional and quarter-hourly energy prices as a key instrument. These should encourage batteries to specifically charge or feed in electricity where grid bottlenecks are reduced. According to the study, such fees could reduce the need for redispatching, provided that grid congestion can be sufficiently predicted.

The authors also advocate greater integration of batteries into redispatch. However, this would require faster processes and "financially neutral" compensation. The study expressly advises against uncompensated redispatch. This would create false incentives for both storage operators and grid operators.

For the balancing energy market, Neon proposes limiting the maximum balancing capacity per grid connection point. The background to this is the concern about a spatial concentration of large battery capacities. If individual grid connections fail, considerable amounts of balancing power could otherwise be lost at the same time.

Neon also considers ramp specifications for batteries to be necessary. Power changes between and within balancing periods should be limited in order to avoid additional frequency fluctuations. However, any financial disadvantages resulting from such specifications would have to be compensated for.

No blanket restrictions

The study is critical of blanket restrictions such as general curtailment periods, uncompensated redispatch or complete bans on grid procurement. Such measures could slow down the storage ramp-up and thus also make the energy transition more expensive.

In principle, the authors of the study consider regional electricity markets or a division of the uniform German bidding zone to be sensible. However, as this is not currently politically desirable, this approach was not investigated further, the study states.

The full study "Regulation of batteries in the transmission grid" is available on the Neon website

Author: Katia Meyer-Tien