Preview 2026: Energy storage association expects strong growth 'in every segment'

Beatrice Schulz: One thing is clear: storage systems are crucial for flexibility, which is the key to a stable, cost efficient and climate neutral electricity system. The Federal Network Agency’s (BNetzA) grid development plan includes up to 80 gigawatts (GW) of storage capacity by 2040 to improve both flexibility and supply security. The storage boom started in the building sector and we’re now seeing strong growth also in the industrial-scale segment, as more companies make storage solutions an integral part of their infrastructure. We expect strong growth in every segment. 

What has enabled this boom – and what effects do you expect it to have?

The expansion of renewable energy sources and increasing electrification have been the main drivers of this trend. At the same time, the costs of energy storage have been reduced significantly in the past decade. The strong price swings we currently see on the electricity market, with power prices frequently turning negative, and rising system costs are a symptom of insufficient flexibility.

Short- and long-term capacity for covering so-called Dunkelflaute (dark doldrums) events still are far from sufficient. Storage must be added at all levels, from power production and grids to end consumers, in the electricity, heating, and transport sectors. Lithium-ion batteries will continue to play an important role in this regard, but there are also other electricity storage technologies as well as thermal storage options. The growth rates that are necessary to cover demand can only be achieved under the right framework conditions. This does not mean support for individual technologies, but genuine technology openness, reduced bureaucracy and a legal framework that adequately includes storage systems.

How would you rate the coalition government’s work in energy policy since the election of Friedrich Merz as chancellor in spring 2025?

The government has put a stronger focus on the topics of supply security and cost efficiency. This should bring the flexibility provided by storage technologies strongly into focus. But policymakers so far seem to underestimate the extent to which storage contributes to supply security while also being cost-efficient, and have therefore yet to pull the right regulatory levers. There’s still a lot of explanatory work to be done here.

Do you see any particularly effective approaches or larger failures? 

We can already see promising developments regarding energy storages installed near points of generation or consumption. The partial exemption from grid fees when feeding previously withdrawn energy back into the grid marks an important step towards making these installations more market-ready. This will allow them to demonstrate their value at the local level as well as at the overall system level.

The explicit exemption of storage systems from certain restrictions for privileged installation on the exterior of buildings generally also marks a step forward. But very detailed guidelines make a true simplification of licensing processes more difficult and have irked both the storage industry and grid operators. This needs to be corrected.

Regarding large-scale storage systems, the government removed these from the power plant grid connection ordinance practically overnight and without sufficient debate about the effects. The fact that this was done without putting an alternative regulatory framework in place means that a key aspect for a stable and cost-efficient energy system remains unregulated. This is not what legal and investment security should look like.

Standalone-battery storage projects have, in recent months, increasingly been portrayed as a problem rather than a problem-solver, even if they are a workhorse for system stabilisation, for balancing renewable power output and for reducing costs. This debate needs to become more fact-based.

What energy sector topics do you expect to become especially relevant in the next year? And, in your view, how should the government deal with them?

Grid connection procedures will be a major area of action in the coming year. There needs to be a secure procedure free of discrimination that accounts for the role of storage beyond the conventional production and demand pattern. For this, greater transparency and more formalised procedures are required. It will also be important to ensure that storage systems find a place within the capacity mechanism framework.

To improve licensing procedures, reviewing privileges in the building code will also become necessary, not only for batteries but also for pumped hydropower storages and large heat storage. In addition, there is a need for long-term solutions to deal with new and existing customer systems at power plants, in industry and commercial contexts, and for buildings and districts. Grid operator duties for these installations currently are slowing their growth significantly – or are leading to situations in which combined solutions that are shared by several users are avoided.

Coupling the electricity and heating sectors is a major blind spot at the moment. Policymakers must chart a clear course for supplying buildings with heating energy through grids or on site, for example with heat pumps. The same is true for supplying industry with process heat. Together with a grid fee reform currently being carried out by the BNetzA, long-term signals are urgently needed here.