Germany has only a few large-scale battery storage systems in operation, yet warnings about excessive expansion are already being issued. The figures appear to support these concerns—though they may also be misleading.
A few weeks have passed since the event, but Jens Wegmann’s frustration is still evident in his voice. The Chief Operating Officer (COO) of Munich-based battery storage developer GESI is not easily unsettled. With a background in major companies like Thyssenkrupp, Klöckner, and Siemens, he is well-versed in tough negotiations. However, during the “Handelsblatt Energy Summit,” after a speech by Klaus Müller, head of the Federal Network Agency, Wegmann made an exception—grabbing the conference microphone to voice some pointed questions.
The issue at hand is battery storage, which, for years, was dismissed as too expensive for significant contributions to the power grid. Now, at least on paper, the sector is booming. Germany currently has only a handful of large-scale battery systems, with a total registered capacity of 2.2 gigawatts (GW)—roughly the equivalent of two coal-fired or nuclear power plants, or about one-thirtieth of the country’s average electricity demand. However, grid operators responsible for connecting these large-scale batteries are struggling with an overwhelming number of new connection requests. In response, Müller is advocating for restrictions on further expansion.
Siemens Energy board member and government advisor Veronika Grimm also warns against excessive battery storage construction. “The current battery storage plans are likely to overshoot the target,” she said, cautioning that the costs could spiral out of control. Instead, she argues, priority should be given to gas-fired power plants, which can later be converted to run on hydrogen and provide quick, flexible electricity supply during periods of low renewable generation.
A “Battery Tsunami” Only on Paper
It is true that there has been a flood of applications for large-scale battery storage projects. The country’s major grid operators—Amprion, 50Hertz, TenneT, and TransnetBW—are currently processing 650 applications for battery storage connections, with a combined capacity of 226 GW. Meanwhile, municipal utilities are handling additional, smaller-scale requests. The surge in applications has accelerated in recent months. At the end of November, the total requested capacity stood at 160 GW—since then, it has increased by about 40 percent.
However, projections from Germany’s Federal Ministry for Economic Affairs suggest that only around 50 GW of large-scale battery storage will be needed by 2045. For 2037, the ministry anticipates a demand of just under 25 GW. The Fraunhofer Institute for Solar Energy Systems (ISE) provides a slightly higher estimate of around 100 GW. In any case, these figures remain a fraction of the total capacity currently being applied for.
Battery storage has suddenly become a lucrative business, attracting numerous new players to the market. Many of these are start-ups, including GESI—which is part of the Bavarian Schoeller family business empire—along with Kyon Energy and Eco Stor, both based in Munich.
The boom is being driven in part by the sharp decline in battery cell prices. Lithium iron phosphate (LFP) cells, known for their durability, now cost just one-seventh of what comparable batteries did per kilowatt-hour of storage capacity a decade ago. Additional price pressure is coming from excess production capacity, particularly among Chinese manufacturers, further pushing down battery module costs.
Another factor is the shifting demand for battery cells. Some of the production capacity originally intended to support the electric vehicle market is now being redirected to stationary storage solutions. This shift is partly due to the slowdown in electric vehicle adoption in certain countries, freeing up supply for other applications.
While the numbers might suggest an imminent “battery tsunami,” the reality is more complex. Many projects may never be realised, and the actual storage capacity added to the grid will likely be far lower than the raw figures imply.