Construction Cost Subsidies for Battery Energy Storage Systems (BESS) – Current Developments and Legal Foundations

In Germany, the demand for Battery Energy Storage Systems (BESS) is continuously increasing. This is not only a result of the energy transition and the growing use of renewable energy sources, but also a response to the rising demands for grid stability and supply security. With the growing number of BESS installations, the issue of construction cost subsidies (Baukostenzuschüsse, BKZ) is also coming into sharper focus for operators.

In November 2024, the 8th Decision Chamber of the Federal Network Agency (BNetzA) published a position paper that outlines a clarification of the regulations regarding the construction cost subsidy. It clarifies that not only industrial plants and large consumers, but also Battery Energy Storage Systems, are subject to a BKZ.

Background of the Construction Cost Subsidy (BKZ)

The construction cost subsidy is a one-time payment that grid connection customers make to contribute to the costs of expanding grid capacity. These costs arise from the maximum agreed connection power and the required grid capacity. The aim of the BKZ is to ensure an equitable distribution of costs based on causality and to create an incentive for the efficient use of existing grid resources.

Requirements for the BKZ

A construction cost subsidy can be imposed if the relevant installation can be partially or fully assigned to the supply area in which the connection is made. In this context, the level of the grid on which the connection is implemented plays a key role.

Legal Foundations

The legal foundations for the construction cost subsidy depend on the respective voltage level. In the low-voltage range, the construction cost subsidy is limited to 50% of the actual grid connection costs, according to Section 11, Paragraph 1 of the Low Voltage Connection Ordinance (NAV).

For higher voltage levels, a different regulation applies. Here, Section 17, Paragraph 1 of the Energy Industry Act (EnWG) comes into play, which provides a differentiated approach to cost allocation. These different provisions reflect the varying requirements and cost structures depending on the voltage level.

Previous Calculation of the Construction Cost Subsidy

The calculation of the construction cost subsidy is based on a performance pricing model and is influenced by various factors.

An important aspect is the voltage level, as the amount of the subsidy increases with the voltage level. Connections at higher voltage levels are generally associated with higher costs, which is reflected in the subsidy amount.

Additionally, regional differences play a significant role. In areas with high grid load, construction cost subsidies tend to be higher, while in regions with lower grid demand, the subsidies are typically lower.

Another key factor is the location conditions: If sufficient grid connections are already available locally, the construction cost subsidies can be lower due to existing capacities. However, if these capacities are lacking, the costs of building a new connection are correspondingly higher, and thus, so is the construction cost subsidy.

Calculation According to the Position Paper of the Federal Network Agency (BNetzA)

The position paper of the BNetzA now stipulates that the BKZ should be based on the arithmetic mean of the current performance price and the performance prices of the last five years. This aims to help mitigate fluctuations and increase planning security.

The goal of the position paper is to target the burden based on grid requirements, meaning that locations with high grid demand will be more heavily burdened in the future, while regions with unused capacities will be relieved.

To implement this, a model with five stages is introduced, providing for burdens between 20% and 100%. Network operators can thus take into account how advantageous a location is for the overall system when determining the BKZ. The BNetzA has published a map showing the assignment of the various stages in the grid regions.

Importance for Battery Storage

Where legal regulations prohibit the imposition of a construction cost subsidy, operators of BESS can also benefit from this. For example, the BKZ is not applicable to green electricity storage systems (§§ 17, 3 No. 1 EEG).

In contrast, gray electricity storage systems do not fall under this privilege. Therefore, the provisions in the position paper also apply to the grid connection of gray electricity storage systems. When calculating the BKZ, only the performance of the BESS when drawing power from the grid is considered.

Conclusion

The growing importance of battery energy storage systems (BESS) calls for clear and transparent regulations regarding cost allocation for grid connections. The position paper of the Federal Network Agency provides crucial guidance for BESS operators. Companies should familiarize themselves with the requirements and calculation principles at an early stage to adjust the financial planning of their projects accordingly.