When BESS Backfires: How BESS Can Work Against the Grid—and Why BKZ Is NOT the Cure

One of the biggest hurdles for BESS developers in Germany is the Baukostenzuschuss (BKZ) —a relatively large, upfront, and often unpredictable connection fee that can make or break a project’s business case. Even today, there’s no standardized methodology for calculating BKZ: I’ve heard of projects being quoted as little as €20 per kW and others as high as €200 per kW . Last year, the Bundesnetzagentur published a position paper effectively treating BESS as pure consumers—legally defensible under principles like the cost-causation principle , fairness to other grid users , and avoiding “free-riding,” but technically debatable.

Of course, I don’t agree with categorizing batteries only as loads, so I challenged myself to imagine real-world scenarios in which BESS might actually harm the grid. There’s a saying: “Whatever grid problem you have, throw some batteries at it and it will be solved.” That’s true—up to a point. Depending on topology and market design, storage can introduce new issues. Here are a few examples I’ve sketched out:

Low-inertia risks High inverter-based resource (IBR) penetration reduces system inertia, potentially pushing the grid into critical situations. BESS can help by operating in grid-forming mode, significantly improving stability. Recently, EPRI published a report investigating the effects of default GFR operation during “blue-sky” conditions.

Inter-day market herding A fleet chasing the same price signal might create megawatt-scale power jumps with almost no ramping. --> Stagger dispatch schedules and enforce ramp-rate constraints on price-driven dispatch.

Deterministic frequency deviations In a 15-minute market, dozens of batteries chasing the same price signal can switch—charging to discharging or vice versa—simultaneously at interval boundaries, causing sudden net-load swings and frequency overshoots. --> Impose ramp-rate limits or move to shorter dispatch intervals (e.g. 5-minute products).

Revenue stacking and SOC conflicts Revenue stacking may tempt an operator to trade away the state-of-charge (SOC) needed for reserves or other obligations. Imagine a BESS signed up for black-start (not yet a German market) but selling energy in the intraday market, only to find its SOC too low when black-start is required. --> Enforce strict SOC regulations and real-time monitoring tied to service commitments.

Congestion rebound Germany’s north-south corridor is a perennial bottleneck. If many batteries charge at low prices in the north and all discharge during southern peak prices, they may worsen that corridor’s loading. Further, Frequency is a grid parameter, but PRL pricing is nationwide—regardless of BESS location or point of connection. Dispatching BESS into a congested line can do more harm than good. --> Designate “grid-booster” locations, give TSOs/DSOs priority dispatch rights (or curtailment options), or use tolling contracts where the utility operates the BESS in exchange for a connection fee.

Market-mechanism distortion There’s a claim that PV + BESS portfolios with aggressive dispatch control could alter market dynamics and increase overall system costs.

Ultimately, BESS are the driving force of our energy transition—not merely profit engines. To unleash their full power for the „Energiewende“ this is an appeal tot he BNetA and BGH to adopt transparent, equitable, and stable BKZ policies—or better yet, dramatically reduce or remove these upfront fees. Such a move would signal confidence to investors and position battery storage as the backbone of a cleaner, more resilient grid.

Originally published on LinkedIn Pulse. Open the original →