Germany: Parliament adopts act to facilitate energy storage expansion

Why should I read this?

On 13 November 2025, the German Federal Parliament (Bundestag) passed an amendment to, inter alia, the Energy Industry Act (Energiewirtschaftsgesetz – “EnWG”) and the Federal Building Code (Baugesetzbuch – “BauGB”) which significantly simplifies the development of energy storage projects. The reform is intended to accelerate the expansion of storage facilities and thus create a central prerequisite for the energy transition. The following aspects are key from a developer and investor perspective.

What do I need to know?

Privileged permitting

The reform elevates legal certainty regarding the privileged treatment of thermal storage facilities, hydrogen storage facilities, and large-scale battery storage systems in outer areas (Außenbereich). By introducing no. 10 and 11 into section 35 BauGB, such projects are now expressly granted privileged status in the outer area.

From a permitting perspective this constitutes a major simplification of future permit procedures for such storage facilities. The legislator thereby addresses the practical reality that the implementation of such projects was previously subject to considerable legal uncertainty, resulting in significant delays in the permitting procedure. The explicit regulation ensures that the permissibility under planning law can now be determined promptly.

The amendment to the BauGB is complemented by an addition to section 11c EnWG. This provision clarifies that until the power supply in Germany is practically greenhouse gas neutral the accelerated expansion of energy storage facilities shall be regarded as a priority concern in the respective balancing of protected interests. This amendment constitutes an essential element in assessing the permissibility of storage facilities under the new concept of Section 35 BauGB and ensuring the effectiveness of the legislative reform.

Exemption from grid usage fee also for multi-use storage systems

The amendment act introduces one aspect in the context of this exemption which can be expected to facilitate the economic operation of so-called multi-use storage systems (e.g. BESS used as a buffer for a PV plant and for peak-shaving purposes): whilst the exemption so far applied to storage facilities if they use power from the grid (i.e. excluding multi-use systems), it will in the future apply also to multi-use systems to the extent they use power from the grid (section 118 para. 6 sentence 2 EnWG).

The current reform does not include an extension of the exemption for energy storage from the duty to pay grid usage fees which has been called for by industry players. The 20-year exemption therefore remains limited to energy storage projects commissioned by 4 August 2029 at this stage.

What should I do next?

The completion of the legislative process should be followed-up. Before the new rules become law, the Second Chamber of Parliament (Bundesrat) will decide on 21 November 2025 whether to raise an objection. Such an objection would not cause the Act to fail directly but it would prompt the Bundestag to reconsider the Act.

In addition to the changes through the current EnWG reform, stakeholders should follow-up on a potential legislative proposal by Federal Government on the power grid connection procedures, which Parliament asked Federal Government to present in the first quarter of 2026: such proposal should, in the Parliament’s view, fundamentally improve and digitise the grid connection procedure in the electricity grid for generation plants, consumers and storage facilities in order to increase transparency and planning security, to resolve the backlog of connection requests, particularly from large battery storage facilities, industrial customers and data centres, and to enable grid operators to deal with the acute situation of increasingly scarce grid connection capacities in a way that makes sense from an overall economic perspective.