Technical Article

Concept paper "Energy Storage Systems Network Connection Ordinance" (SpeicherNAV)

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I. Status quo - problems with connecting storage systems to the grid

As of July 1, 2023, the new definition of the term energy storage system in accordance with Section 3 number 15d EnWG is1 came into force. This gives storage systems a new status in energy law. The definition recognizes that an essential property of storage systems for the energy system is the delay in the final use of electrical energy to a later point in time than that of its generation and that storage systems are not final consumption devices and generation plants. In order to do justice to the new role of energy storage systems in the energy system and to reduce barriers to storage, various changes are required in the existing energy law framework - created for the generation, transportation and consumption of electricity.

This applies, among other things, to the network connection of storage systems. So far, there have only been regulations for end users and generation plants, some of which are applied to storage systems. This initially leads to a considerable degree of legal uncertainty, because the application of the regulations designed for end users and generation plants to storage systems is often not possible or useful on a one-to-one basis. The resulting scope of interpretation and application is already a barrier to investment per se. In individual points, the previous legal framework also leads directly to adverse effects on storage systems, which slow down urgently needed expansion and provide false incentives when viewed systemically and economically. There are no regulations for (multi-use) memory in other places. There are currently the following hurdles when it comes to connecting to the grid and using storage systems:

1. Charge storage facilities with the construction subsidy (designed for final consumers)
2. Time limit of network fee exemption in accordance with Section 118 paragraph 6 EnWG on storage systems with start-up until mid-2026
3. No applicability of the network fee exemption in accordance with Section 118 paragraph 6 EnWG to multi-use storage
4. It takes too long to process network connection requests
5. Too long duration of establishing network connections or even unavailability of network connections due to unnecessary "worst case" analysis of the storage capacity, because a permanent supply and at the same time a continuous supply of the storage system at full power (as in the case of a final consumer/a generation plant) is the basis for network planning.

II. solution: Energy Storage System Grid Connection Ordinance (SpeicherNAV)

In any case, the hurdles and disincentives mentioned above under 1 to 3 can be met in part with amendments to the Energy Industry Act. However, these topics are not covered by the present concept paper. Instead, it will be outlined below what an "Energy Storage System Network Connection Ordinance" (SpeicherNAV) could look like in view of the problems mentioned above under 4. and 5. in order to take account of the special features of storage systems when connected to the grid and to remove the serious hurdles mentioned in paragraphs 4 and 5.

1. objectives of SpeicherNAV

The goals of SpeicherNAV must be defined from the perspective of the overall energy system, taking into account both the current state of the energy system in Germany and the expected further significant expansion of PV and wind energy plants.

In particular, the following should be mentioned:

1. Speeding up the network connection of storage systems
2. Allocation of storage at system-friendly locations
3. Ensuring that storage systems operate properly
4. Ensuring a fair distribution of economic benefits from storage operations between the storage operator and society.

2. storage NAV structure

The structure makes sense to be based on existing regulations, in particular the EEG, but also KraftNAV.

3. contents of the storageNAV

a. Scope of SpeicherNAV

The scope should include all grid connections of energy storage systems to electricity supply networks with a voltage of at least 10 kilovolts (medium-voltage networks and above).

b. Right to priority and immediate grid connection

Because of their importance for the energy system - comparable with renewable energy systems - system-supporting energy storage systems should in principle be entitled to priority and immediate grid connection. In this respect, the regulations can be largely reproduced in Section 8 EEG 2023. This applies in particular to the information to be provided by the network operator, the obligation to provide a web portal, the response times and the determination of the most economically advantageous network connection point, taking into account the special features and capabilities of storage systems.

The obligation to connect to the grid must exist in particular even if the purchase of electricity is only possible through optimization, strengthening or expansion of the grid. In many cases, however, storage systems will simply reduce the load on networks and avoid overarching measures to expand the networks or at least postpone them. This may and must be taken into account by the network operator when examining network connection requests in accordance with the storage NAV.

c. Ensuring the serviceability of the energy storage system

The core of the SpeicherNAV should then be regulations which ensure that energy storage systems that benefit from the privileges under the SpeicherNAV (and possibly other regulations) can not only make a significant contribution to system stability, but must also make a significant contribution to system stability. We believe this is necessary to create a sustainable - and also in compliance with state aid law - basis for the privilege of storage facilities over fossil production plants and final consumers.

In view of the diverse technical capabilities of storage systems and, at the same time, the diverse range of situations in the distribution network areas, we suggest as a flexible and individual solution that distribution system operators may - in accordance with predefined rules (see the following points) - define specific operating guidelines ("operating concept") for each energy storage system.

d. Procedure of the network connection process

As a basis for the operating concept, the storage operator first names the technical capabilities and limits of the planned storage system as part of its network connection request. The network operator then checks - similar to the requirements of § 3 KraftNAV - the connection point, connection lines, load flows and other effects on the network. It also checks the expected extent of the use of the energy storage device for redispatch measures, and the subscriber may request that the network operator also carry out tests based on assumptions made by the subscriber, in particular with regard to expected positive or network-relieving effects of the storage on the network.

The network operator should then be required, within a fixed period of not more than three months, to complete the tests, to name the connection point and the possible connection time, and to inform the storage operator of the operating concept. The benefits of the operating limits specified in the operating concept for the distribution network must be explained in detail and that the storageNAV requirements have been taken into account.

Within the operational concept, the network operator should be able to provide, on the basis of the specific needs in the respective network area, that, in each case within a predefined framework,

a) can adjust the operation of the storage system as planned by the plant operator both in the direction of supply and in the direction of supply,
b) can adjust the operation of the storage system as planned by the plant operator both in the direction of supply and in the supply direction as well as in terms of height,
c) Contract operating periods and operating cycles of the storage system at predefined conditions, even in the long term and can freely dispose of the storage system within limited periods of time, and
d) can prohibit the storage operator (output, periods of time) from providing control energy to the responsible operator of the transmission systems.

The right of the network operator to set operating limits should be limited to the minimum necessary for the safe operation of the distribution system.
The memory dispatch made possible by the operating concept on the basis of the operating concept reduces the overall need for redispatch measures in the respective network area.
Grid-service energy storage systems with a corresponding operating concept in accordance with the SpeicherNAV requirements must also be excluded from the scope of redispatch (Sections 13, 13a EnWG).

e. Subsequent commitment and legal obligation

The result of the proceedings would then be a connection commitment from the network operator, including an operating concept, which creates a legal obligation. This is in line with the - proven - EEG concept.

f. Right to refuse network connections

The network operator has the right - as under the EEG - to refuse network connections in the event of technical impossibility or economic unreasonableness, although - unlike in the EEG - the legislator should define more precisely when there is a case of economic unreasonableness.

g. Arbitration board in case of disputes

By means of an unbureaucratic and time-limited arbitration or conciliation procedure, it should be possible for both storage operators and network operators to constructively reach agreement on the network connection itself, the details of the network connection and, in particular, the operating concept. Appropriate procedures should be carried out by the relevant regulatory authority responsible for the network operator - preferably online.

h. Deadline for implementing the grid connection

The storage operator's right to immediate network connection should be accompanied by a standard period ("immediately, but at the latest within 12 months"), giving the network operator the opportunity to extend the period for reasons beyond its control. The burden of presentation and proof for these reasons must be placed on the network operator. This proposal takes into account that the lack of implementation deadlines for grid connection in other regulations and laws (EnWG, EEG, StromNZV, GasNZV) has so far meant that the right to immediate grid connection is de facto empty because it is regularly not possible for subscribers to prove themselves that a certain period of time was too long or that delays were caused by the network operator.

i. Costs for grid connection and network expansion

In accordance with the cost allocation regulations under Sections 16 and 17 EEG, the storage operator should bear the costs of grid connection and the network operator should bear the costs of optimizing, strengthening and expanding the network.
The costs of examining the network connection request on the basis of the storage NAV should be borne by the storage operator. This would ensure that network operators are only involved in serious projects.
The costs of compensation must be able to be accounted for by the network operator as part of incentive regulation - as well as costs from redispatch.

j. Financial compensation for storage operation restrictions

The costs of compensation must be able to be accounted for by the network operator as part of incentive regulation - as well as costs from redispatch. The financial compensation for restrictions on storage operations may be based primarily on the provisions of Section 13a EnWG (redispatch measures). The financial compensation must be made in such a way that the storage operator is not in a worse economic position than he would be without operational restrictions. Appropriate financial compensation must therefore include the following elements:

a) Necessary additional costs of the energy storage system due to the requirements of the operating concept
b) Expenses necessary for the adjustment of the purchase or supply of the energy storage system based on the operating concept
c) The value consumption of the system for the adjustment of the purchase or supply of the energy storage system based on the operating concept
d) The loss of revenue opportunities due to the restrictions imposed by the operating concept
e) The expenses necessary to establish operational readiness or to postpone a planned audit.

k. No construction subsidy

Finally, the SpeicherNAV should also state that no construction subsidy may be charged when energy storage systems are connected to the grid.

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