Germany's future capacity market — a mechanism worth an estimated €15.6–35.2 billion — won European Commission state aid approval on 2 September, but critics say its first auctions are effectively closed to battery storage.
The mechanism, which will remunerate capacity from 2031 under Germany's Electricity Supply Security and Capacity Act (StromVKG), lets resources compete for 15-year contracts. The Bundesnetzagentur is due to open the first tender on 9 September, seeking 4.5GW, with a second 4.5GW round closing on 29 December.
Industry and climate groups argue the design favours gas. Plants must be able to feed the grid without interruption for at least 10 consecutive hours at 80% of installed capacity — and gas combined-cycle plants receive an 85% capacity credit, while battery storage receives just 58%. Beyond Fossil Fuels says the 9GW of long-term capacity tendered this year will therefore be closed to batteries and demand response, and notes that a requirement for battery cells from European or associated countries adds a further barrier.
Environmental law charity ClientEarth, which filed a state aid complaint in November 2025, called the approval "astonishing", pointing out that the decision was not published before the first tender closes, leaving the public no time to scrutinise it. Grenergy regulatory affairs manager Nina Schmüser said the initial 9GW "is unlikely to be accessible for today's BESS projects", adding that the design "locks in gas capacity for many years while reducing merchant revenues for storage assets".
There is a path forward: from next year, Germany plans "duration-neutral" auctions of around 2GW, which analysts at Aurora Energy Research expect batteries to dominate. The European Commission, for its part, found the mechanism "necessary and appropriate" and consistent with EU electricity rules — a decision with implications for other EU member states now designing their own capacity markets.
