Aurora 2024 Renewables & Batteries Summit in Berlin
TLDR:
Annual conference about the German Market
Aurora Energy Research ’s annual conference about the state and future of the German Energy Transition took place on 28.05.2025. It included a keynote by the undersecretary Dr. Nimmermann about the strategy of the German government, as well as presentations by Aurora and panel discussions.
Keynote by the permanent secretary
The focus of the German government is on grid/system stability and energy security through:
A conference with KfW is planned for July in Frankfurt to discuss with private capital providers what the right framework should be to attract private investment for the build-out and modernisation of the German electricity infrastructure.
Further details about the upcoming capacity mechanism will be published this summer. But no decision has been made so far on whether it will be a capacity market or some form of hedging mechanism.
The government wants to avoid having to split Germany into different price zones and is considering some form of additional grid charges to send locational price signals.
Battery storage deployment is working well and, therefore, doesn’t need government subsidies and is not included in the government’s long-term supply and demand modelling.
The current EEG subsidy tender system must be replaced by a two-way CfD mechanism to comply with EU regulations.
More demand and supply flexibility is needed to ensure system stability, and renewable energy asset owners need to accept curtailment as part of their business case.
Keynote: Rentability of PPA and merchant solar PV
New solar PV projects in Germany that plan to sell their electricity on a merchant basis or via a PPA are currently not profitable if your cost of capital is higher than 5%. This is not forecasted to change until 2036 at the earliest. PPAs will, therefore, remain a niche product that only a few project owners will choose.
To reach the capacity increase targets, the government will instead rely on CfDs, and capacity limitations have been ruled out so far, unlike in the UK.
Government-backed CfDs are less risky than PPAs, and this will lower the cost of capital for renewable energy investments.
Panel Discussion: State of the Energy Transition
The panel broadly agreed that investors and lenders see three critical topics in Germany:
Keynote: co-location in Germany
Whilst co-location would be a logical choice for the German electricity market with its increasing number of hours with negative prices, the current regulations don’t allow for a profitable business model.
Co-located batteries that receive subsidies are only allowed to be charged from the connected renewable energy generator. This will change in 2026, but the government hasn’t published the details yet.
This situation frustrates investors as other countries have more straightforward metering concepts and are more flexible on how the battery is charged.
Panel discussion: Does co-location make sense
The panel mirrored the keynote by expressing frustration around the co-location regulation and that the business case doesn’t work in Germany.
An interesting assessment from one panellist was BESS developers shouldn’t pin too much hope on the future capacity mechanism, as gas-fired power plants tend to win most contracts in other European markets.
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