The Federal Network Agency intends to tie the grid fee exemption for battery storage systems to conditions that are out of touch with reality. However, it is still possible to prevent the erosion of the principle of protection of legitimate expectations.
Three years ago, on November 10, 2023, the Bundestag passed a resolution: Battery storage systems connected to the grid by the deadline of August 4, 2029, will remain exempt from grid fees. Since then, numerous project developers and investors have taken on significant financial risks in reliance on the applicable law .
But now the Federal Network Agency wants to make the protection of legitimate expectations subject to strict conditions: According to the draft specification for the General Electricity Grid Tariff System (AgNes), operators must demonstrate in the first quarter of next year that they have already made a “final investment decision ” (FID) prior to January 1, 2027.
This approach leads to significant practical problems. This is because the term “FID” is not used consistently and is therefore not an objective criterion, but rather one that depends on the specific case and the parties involved. Furthermore, developers and investors take on significant economic risks and make substantial investments (typically in the tens of millions) long before the formal FID.
Objective Criteria Instead of Unrealistic Conditions
This threatens to undermine the principle of protection of legitimate expectations, which is causing considerable uncertainty in the industry, jeopardizing private investments in the energy transition amounting to tens of billions, and calling into question the reliability of Germany as an investment destination. In our analysis, “The Final Investment Decision (FID) in the AgNes Process,” you will learn
- Why Large-Scale Battery Projects Entail Significant Economic Risks Early On
- at what point in the process capital is irrevocably tied up, and
- the four criteria we proposed to the Federal Network Agency as an alternative to the FID, because they provide an objective and practical basis for assessing a project’s readiness
Download: The Final Investment Decision (FID) in the AgNes Process