Germany’s Federal Court of Justice has ruled that BESS projects can be subject to the country’s Baukostenzuschuss (BKZ) construction fee.
This decision may significantly increase development costs for energy storage projects.
The BKZ is a fee imposed on any grid-connected resource with the potential to draw large amounts of electricity, payable to distribution or transmission system operators (DSOs or TSOs).
The charge is intended to help cover the cost of necessary grid infrastructure and can reach as high as €140,000 (US$162,800) per megawatt. It is typically applied early in a project’s development, posing challenges particularly for smaller developers.
Unlike generation-only assets such as coal, gas, or renewable power plants, BESS facilities are considered grid consumers under this framework.
However, many in the industry have contested this classification. A case was brought before the court by stakeholders challenging the inclusion of BESS, arguing that their grid usage patterns are more aligned with generation assets than with end consumers.
In its 15 July 2025 decision (Resolution EnVR 1/24), the Federal Court of Justice upheld the application of BKZ to BESS. While acknowledging the industry’s argument, the court concluded:
“The equal treatment of grid-connected battery storage systems and other end consumers is nevertheless objectively justified given the spirit and purpose of the construction cost subsidy. The grid operator obliged to connect has discretion in this regard.”
Though not named in the ruling, the case likely involved Kyon Energy, a key player in Germany’s BESS sector and a subsidiary of TotalEnergies. Kyon’s regulatory affairs head, Benedikt Deuchert, recently discussed the issue at Solar Media’s Energy Storage Summit Germany.
Despite the BKZ fee, Germany’s BESS market has seen significant growth and is projected to be Europe’s largest. Still, developers argue the fee restricts the sector’s full potential.
The BKZ is separate from operational grid fees, from which BESS assets are currently exempt until 2029. A long-term policy on these charges is under review, following a whitepaper issued in May by the Bundesnetzagentur.
