Battery storage expansion could lower German electricity prices

Research from the Fraunhofer Institute indicates that increasing battery storage capacity could significantly stabilize and lower electricity prices in Germany. A simulation of the 2025 day-ahead electricity market suggests that adding 20 GW of battery storage—capable of storing excess power for two hours—could reduce the number of hours with prices exceeding 200 euros per megawatt-hour from 169 to 20.

Furthermore, increased storage could reduce the duration of negative electricity prices from 575 to 271 hours. This would benefit solar power owners, as current regulations under the EEG (Renewable Energy Sources Act) result in zero market premiums during periods of negative prices.

In a related study commissioned by the German Solar Association, Fraunhofer researchers explored the use of grid-serving storage to optimize existing infrastructure. By using batteries to manage peak loads at substations, grid operators could integrate more solar and wind power without immediate, costly expansions of transformers or transmission lines. This concept, referred to as “overbuilding,” allows for higher generation capacity relative to transformer nominal power by absorbing surpluses and discharging them during low-demand periods.