German Federal Court of Justice: Connection Cost Contributions (Baukostenzuschüsse, BKZ) for Battery Storages are Permissible

In its decision on 15 July 2025 (case no. EnVR 1/24), the German Federal Court of Justice ruled that grid operators may charge connection cost contributions (Baukostenzuschüsse) for the grid connection for battery storage systems in accordance with the capacity price model.

Connection cost contributions for battery storage systems are not discriminatory

In the view of the German Federal Court of Justice, charging a connection cost contribution based on the capacity price model for grid-connected battery storage systems is not discriminatory within the meaning of section 17 (1) German Energy Act (EnWG), and is therefore generally permissible. As a result, the question that concerns many project developers and investors in battery storage projects was decided to their disadvantage and in favour of grid operators.

Steering and control function also applies to battery storage systems

Although grid-connected battery storage systems differ from other end consumers because they do not consume the electricity on site, but rather feed it back into the grid later, equal treatment with other end consumers is objectively justified in the view of the Federal Court of Justice: A connection cost contribution fulfils a steering and control function by linking the grid connection to the actual capacity requirement. The purpose of such contribution, to avoid oversizing the grid and secure financing of the distribution grid, also applies to battery storage systems insofar as they use the grid to draw electricity. The feed-in function of battery storage systems does not change this. The beneficial effects of battery storages to the grid (e.g. relief of the grid) do not justify special treatment either, as only the grid operator can assess whether and under what conditions battery storages can actually relieve the local grid.

Does not contradict EU law

EU law also does not justify exempting battery storage systems from connection cost contributions, as the existing privileges (e.g. grid fee exemptions) are sufficient in the view of the German Federal Court of Justice. If a connection cost contribution could not be charged for battery storage, or not charged in full, such preferential treatment would be at the expense of end consumers who would ultimately bear the costs of grid expansion.

Calculation of the connection cost contribution has been under discussion for some time

We already reported in detail on the calculation of  connection cost contributions based on the so-called "capacity price model" in a blog post (News on conection cost contributions for battery storage systems (in German)). According to this model, the connected load is multiplied by a capacity price over five years, which can be influenced by various factors such as the higher or lower grid level, regional differences in terms of grid load and location dependency. The grid operator has a margin of discretion in this respect, which the German Federal Court of Justice confirmed in its decision. Furthermore, as with other end consumers, the grid connection must be dimensioned in accordance with the requested withdrawal capacity; the feed-in function does not play a role here.

Battery storage systems are indispensable components of the energy transition; they can store surplus energy and feed it back into the grid as required. Nevertheless, they will continue to be treated as traditional end consumers under this decision. It remains unclear whether large battery storage systems with a capacity of more than 100 MW (which were not the subject of the proceedings) will be treated differently. This applies in particular to the different practices currently adopted by grid operators with regard to the applicability of the German Power Plant Grid Connection Ordinance (KraftNAV) to these large-scale battery storage systems and the question of whether, if the KraftNAV applies, only the reservation fee for the feed-in connection should be charged, or if a connection cost contribution should also be charged for the offtake capacity.

Outlook

It remains to be seen how grid operators and the German Federal Network Agency will implement the decision in practice. Companies must continue to take a connection cost contribution into account when developing battery storage systems and factor it into their pricing. It is advisable in any case to stay in contact with grid operators in order to ensure that any leeway they have is used in favour of battery storage projects.