Germany’s Capacity Auction Locks Out Batteries, Hands 5 GW to Gas

Germany has awarded 5.16 gigawatts of long-term capacity contracts to gas generators, with battery storage systems shut out by technical thresholds that most projects cannot currently meet.

The Federal Network Agency, Bundesnetzagentur, distributed the contracts under the first phase of the Power Supply Security Act, granting 15-year agreements at a weighted average rate of €155,296 per megawatt. Energy companies RWE and LEAG claimed 99 percent of the awarded capacity through proposals for large gas-fired plants. The facilities are due to come online from 2031, earmarked mainly to cover supply shortfalls during prolonged periods of low wind and solar output.

Battery energy storage projects entered the auction but could not clear the eligibility bar. The rules require a facility to sustain its maximum output continuously for ten hours, recharge within three hours, and then discharge again for eight hours. Most commercial battery systems today cannot exceed four hours of continuous discharge. Storage faced a further obstacle that gas plants did not: main battery components must be manufactured within the European Economic Area.

The design is expected to shift for the second auction phase, which will be adapted to reward short-term flexibility — the market segment where batteries are more competitive. Meanwhile, the deadline for bids on the remaining 3.84 GW under the first phase is December 29.

Source: Balkan Green Energy News