Germany ends remuneration of negative price periods under the EEG and opens new opportunities for co-located BESS
Germany is set to introduce key regulatory changes affecting the remuneration of negative price periods under the EEG and the co-location of EEG generation assets with BESS. These changes will end payments for any negative price periods in the day-ahead market, extend the subsidy periods according to the number of negative hours, and remove restrictions on co-located BESS, allowing for greater market participation and additional revenue opportunities.
New plants under the EEG will no longer receive remuneration during negative price periods, a rule which will apply to full hours and be extended to individual quarter-hour intervals, once the quarter-hour settlement is introduced in the day-ahead market. This marks a significant shift from the current remuneration system, with the three-hour rule in place, as Pexapark has reported.
To account for these uncompensated time periods, the affected periods with negative prices will be added to the end of the subsidy period. The new rules will apply to assets awarded subsidies in EEG auctions once the law takes effect. However, existing plants already awarded EEG contracts will also have the option to transition to the new scheme. Those that opt in will benefit from an increased EEG subsidy of 6 EUR/MWh.
Another major regulatory shift concerns the co-location of EEG generation assets with BESS. The exclusivity principle, which previously restricted co-located EEG assets to charge exclusively from the renewable assets, and prevented them from charging from the grid, will be removed. Under the new framework, storage systems will not only be able to shift production from EEG assets but can also participate in wholesale market arbitrage and provide ancillary services. EEG subsidies will be paid based on the actual generation of the renewable asset, eliminating previous restrictions that led to subsidy losses when a co-located storage system charged from both the EEG asset and the grid.
This regulatory adjustment significantly enhances the attractiveness of co-locating BESS with EEG generation assets. The ability to store electricity produced during negative price periods – which will be no longer remunerated under the EEG but added at the end of the subsidy period – alongside with the additional revenue opportunities from wholesale arbitrage and ancillary services, presents a more favourable economic case for investment in co-located storage than under the previous exclusivity principle.
Before coming into force, the law will require approval from the Bundesrat, with a vote scheduled for 14 February. If passed, it is set to take effect on 1 March 2025.
Did you enjoy this content? You can learn more about all market intelligence content we offer here.
Alternatively you can register with Pexapark directly to get access to free monthly market insights and European pricing trends.