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Fraunhofer study: Battery storage systems could relieve power system by 3.9 billion euros per year

What economic effects would a faster expansion of battery storage have? A current Fraunhofer study provides concrete figures and shows why greater flexibility is crucial for electricity customers, project developers, and the entire energy system.

A new Fraunhofer IEE Study (Institute of Energy Economics and Rational Energy Use) shows how much money a faster expansion of Battery storage could be saved in the German electricity system. Commissioned by BEE, BWE, and BSW-Solar, the researchers retrospectively analyzed the period from January 2025 to the end of May 2026. The key finding: As early as this period, an additional 20 gigawatts of storage capacity with a four-hour duration would have Savings of 5.6 billion euros – converted to an annual basis, around 3.9 billion euros.

Key findings at a glance

An assumed additional flexibility reserve of 20 GW of power and 80 GWh of capacity from battery storage systems would have had the following impacts over 17 months:

Total savings during the investigation period€5.6 billion
Annual savings (projected)€3.9 billion
Relief for the federal budget (EEG subsidy costs)€2.1 billion (€1.5 billion/year)
Relief for electricity customers (spot market prices)€1.9 billion (€1.3 billion/year)
Improvement of the import/export balance€1.6 billion (€1.1 billion/year)
Reduction of negative exchange power pricesapprox. 70 %
Reduction of market-based renewable energy curtailment (redispatch)approx. 55 % (3.3 TWh)
Reduction § 51 EEG Risk PVfrom approximately 25 % to approximately 6.3 %
Reduction § 51 EEG Risk Wind Onshorefrom approximately 8 % to approximately 3.7 %
Reduction § 51 EEG Risk Offshore Wind Energyfrom approximately 7 % to approximately 2.8 %

According to the EEG regulations, an annual increase of approximately 8 GW in capacity and 32 GWh in storage capacity would be necessary to meet the flexibility demand, the Fraunhofer IEE projected in its study.

Why the study is important: Five symptoms, one cause

The study currently attributes five widely discussed challenges of the energy transition to a common cause:

  • lack of flexibility in the power system
  • Extreme price fluctuations on the stock exchange
  • increasing curtailment of wind and solar power plants
  • declining market values renewable energies
  • growing financing risks pursuant to § 51 EEG

All symptoms are closely interconnected. Section 51 of the Renewable Energy Sources Act (EEG) ensures that new installations do not receive subsidies during periods of negative spot market prices—meanwhile already starting from every single negative quarter-hour. The more frequently negative prices occur, the greater the investment risk for new wind and PV projects.

Increased short-term flexibility precisely addresses this point: storage systems absorb electricity during times of high generation and low prices and release it at a later time when demand—and thus the price—is higher. At its core, this is the same market logic that underlies the approach of Revenue Stackings used in BESS in FTM operation.

Methodology of the Fraunhofer IEE energy storage study briefly explained

For the analysis, the European electricity market model SCOPE-EM developed by Fraunhofer IEE, which had already been extensively validated as part of the Agorameter project. The model simulated the period from early 2025 to the end of May 2026 on an hourly basis and, according to the study, achieved a high degree of agreement with actual market data —approximately 97% of the actual day-ahead price level, as well as a nearly identical number of hours with negative prices (845 simulated versus 819 actual hours). Various storage scenarios ranging from 10 GW/2h to 40 GW/8h were examined, with the expansion modeled exclusively in Germany—a deliberately conservative assumption, as additional flexibility can also be tapped abroad.

What this means for storage operators and project developers

For the energy storage industry, the Fraunhofer IEE study provides a remarkable classification. According to this, the determined Sweet spot of 20 GW additional storage capacity of less than 3 % of the network access requests for electricity storage currently on file with network operators. At the time of the study’s publication, these requests were in the three-digit gigawatt range. At the same time, in Germany there are approximately 19 GW of stationary battery storage capacity – including residential PV storage systems – actually in operation. The market for projects thus already exists; what is lacking is the speed of implementation.

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The four investigated scenarios clearly show that Scenario 2, with an assumed 20 GW and 4 hours of capacity, provides the greatest relief for electricity consumers. With higher battery power and capacities, savings in the federal budget increase due to falling EEG subsidy costs.

It is also interesting for project developers that the study distinguishes between two impact logics: With lower storage capacity (up to 20 GW/4h), the price-smoothing effect in favor of electricity customers, primarily because price peaks are being capped. With higher capacity – the sweet spot for reducing support costs is around 30 GW/6h – raising low-price phases is becoming increasingly important. While this is particularly relevant for increasing the market value of renewable energies, it no longer increases the benefit for end customers proportionally. For the economic evaluation of FTM storage projects with a focus on the Day-Ahead Trading or Intraday Trading Is that a relevant note for the importance of a sufficient storage duration?.

Political demands of the BEE

BEE President Ursula Heinen-Esser classified the results of the Fraunhofer storage study by stating that storage systems are “a savings program for electricity customers and the federal budget.” Politics must now enable the expansion of storage and flexibility more quickly. Specifically, the association demands:

  • acceleration and standardization of grid connection procedures for battery energy storage systems
  • the regulatory enablement of multi-use operation of battery energy storage systems
  • the consistent use of storage facilities in redispatch measures instead of curtailing renewable energies
  • a simplification of the connection of battery storage systems to existing grid connections of power generation plants as well as commercial and industrial enterprises

Outlook: Annual flexibility requirement of 8 GW

According to the study, the identified value of 20 GW is not a long-term expansion target, but rather describes the acute need to catch up for the level of renewable energy expansion already achieved. Since the Federal Government continues to annual additions around 20 GW photovoltaic and 15 GW wind power aims at, the need for flexibility grows continuously as well. A simplified extrapolation of the Fraunhofer analysis estimates this additional annual storage requirement to about 8 GW or rather 32 GWh storage capacity – significantly more than is currently being installed. According to the study, only around 4 GW and 7 GWh were newly added in 2025. A complementary special scenario of the study also shows that the expansion of renewable energies and flexibility must be planned together in the future, since a lower expansion of renewables would have also meant a smaller flexibility gap.

Conclusion

For the first time, the Fraunhofer study provides a reliable, model-based retroactive calculation of the specific macroeconomic benefits that additional short-term flexibility in the German electricity system would already offer today—thus making it clear that the expansion of energy storage is not merely a peripheral issue, but rather a central prerequisite for a cost-efficient energy transition. For project developers and operators of battery storage systems, the study confirms the economic rationale behind FTM applications such as arbitrage and market value enhancement, while simultaneously providing political weight for the demand for faster grid connection procedures.

FAQ on the Fraunhofer IEE Energy Storage Study 2026

What is the “sweet spot” in the Fraunhofer study?

The sweet spot refers to the combination of storage power and capacity where a majority of the positive effects are already achieved before the additional benefit diminishes. For the analyzed period, this point is around 20 GW of storage power with four hours of capacity.

How much storage capacity is currently installed in Germany?

According to the study, around 19 GW of stationary battery storage capacity are currently in operation, including residential PV storage systems.

What role does Section 51 of the Renewable Energy Sources Act (EEG) play for new wind and solar power plants?

The paragraph ensures that new plants do not receive subsidies during periods of negative spot market prices. Since these periods are increasing with the expansion of renewable energies, the revenue risk for new projects is rising—according to the study, additional flexibility can significantly reduce this risk.

Who commissioned the study?

The Federal Renewable Energy Association (BEE) together with the German Wind Energy Association (BWE) and the German Solar Energy Association (BSW-Solar); it was carried out by the Fraunhofer Institute for Energy Economics and Energy System Technology (IEE).

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