EP.274 – From Grid Bottlenecks to Battery Value: Europe’s Storage Markets Evolve

This April Aurora Energy Researches Flagship Spring Forum returns to London for its 12th year. On 29th April 2026, join over 450 senior energy leaders for a full day of insight, debate and high-level networking. Here's CEO Keynotes from Global Energy and Finance Leaders, explored geopolitics, system resilience and investment strategy, and experienced live debates, breakout sessions and a recording of Aurora's energy unplugged podcast. As the energy transition enters a decisive phase, be part of the conversation shaping what comes next. Head to auroraear.com/events to book your path and use the code podcast20 that podcast20 for an exclusive 20% discount. Welcome to Energy Unflugged, the go-to podcast focusing on a global energy transition. I am Claudia Günter, Senior Research Lead at Aurora. Today we're tackling one of Europe's big energy transition challenges. How can battery storage scale up when the grid is too congested to let new projects connect? Europe has made impressive progress in scaling up renewables, but grid investment and expansion hasn't kept pace. In 2024 congestion management hit 72 terawatt hours, enough energy to power Austria for a year, costing us nearly 9 billion euro for energy that couldn't be transported where it was needed. Also, the reality for battery developers has become harsh, getting a grid connection can take years, and in some case it may not ever happen. Today we will explore a relatively new but growing solution, flexible grid connection agreements. We will put a special spotlight on Germany where we see them rising fast. So could they ease congestion and advance the energy transition? And what do they mean for battery developers? To help us unpack these questions, I'm delighted to welcome two battery experts from Entrix. Entrix is a European market leader in trading flexible energy systems, operating across Germany, Poland, Italy, Spain and Portugal. Interestingly, Entrix has been at the forefront of battery optimization and Germany, managing one of the nation's first large-scale storage projects. So I'm quite excited to have them on the show today. Stefan Schulzien is founder and CEO of Entrix, meaning that he has built the business across Europe, helping battery operators to turn their flexibility into money and also providing the airport for the power system. Beyond his work, Stefan also has a creative side. His secret wish is to be a professional just player. Welcome Stefan. Thank you. Thanks for being here. Stefan is joined today by Konstantin Niklas, head of sales at Entrix. With over a decade of experience in assets management and client advisory, he combines financial expertise with deep market insights. And his passion for tracking energy markets is only matched by his enthusiasm for the Olympic Games. Nice to have your Konstantin. Thank you. And an honor to be here. So, you two combine lots of diverse energy expertise and also interest. That's why it's great to chat with you today. Before we dive into the topics, I'm curious to know, is this the first podcast episode you're doing together or are you already podcast wingman? Podcast wingman, we're not yet. But I've done a few. I think for Konstantin for you, it's, it's the first here. Yeah, so for Konstantin, it's the first one. So yeah, it had to be supported and hopefully bring double, double power. Nice. Okay, that's good to hear. So let's see how this goes. Let's first talk about Entrix. So Entrix is a battery optimizer. And of course, there are many different ones in Europe. There are more established ones. There are some new kits on the blocks. So I would like to understand how do you position yourself in that market and which markets does your portfolio cover? Yeah, I have to to shut some light on this. Indeed, we are we are an optimizer. We are active across several European geographies, as you can hear, my accent, we are based in Germany. So we started out in the German market, now also active in Poland, into the Portugal and Spain. So truly, truly European company in this field have been active for quite a while. So would rather count us to the ones who have been who have been in the market for for several years. And maybe for the ones who are tuning in for the rather first time to understand what the term optimizer actually is. So what we are in the end responsible for is to capture a value from flexible energy assets, especially from grid scale batteries that will be the focus, I guess, as well, of what we will be talking about today. But we are also, for example, working with virtual power plants. And so we are the operator of Europe's largest residential world power plant. And when we talk about optimization, what does that mean? In the end, it's about making sure that as I said, that we maximize the value of flexibility, that means on the one hand side, we have to take care of trading decisions. So we have to understand how to market the flexibility from a battery at a given moment of time, yeah, into the arbitrage markets for they had to intraday and into the FC&AFR markets for control reserves, so to stabilize the frequency in the system. And we like the term optimizer because it's not just trading, already in the text, so to say, now because obviously all the trading that we do has to account for the specifics of the hardware, the specifics of the grid connection and so on. So the optimization problem from a technical perspective is actually very complex that we have to master. And we as antics, we also interpret our mandate a bit more broadly. Yeah, so ultimately we feel responsible for helping our clients who are the asset owners of batteries. We interpret our mandate as such that we want to help them deliver on the business case. So what we have to do for our customers as well, for example, is that we can provide them with secure revenues when the risk appetite is a bit lower. We can help them with warranty parameters. We get involved in grid connection designs. And then of course, we're very, very close partner with them or for them once the batteries then ultimately operation. Thanks a lot. And how many days do we currently talk about flexible grid connection agreements, which is one of the main topics of today? So it's just like a very big topic or somewhat more neat. Yeah, I think it has become more of a prominent topic now with a course of 2025. First hints on the started emerging, I would say, in 2024, but there and those projects were still the odd ones out now in 2025. What we saw in what we saw in that year was that there was more and more talks about those agreements. I think overall the market is still finding itself what's what the flexible connection agreement actually is and how to get them right. But it has certainly become more of a topic. Thanks a lot for sharing. So let's make sure that everybody knows what we're talking about. Also the people that are maybe not working that closely on the grid or battery systems. So traditionally, the power grid in Europe hasn't been that much of a big topic in the energy transition, especially in Germany. Despite the fact that 10, 15 years ago, we already knew that the grid's build out was delayed, but we couldn't really feel the impact yet. And this is really current now. And what a lot of battery developers are now struggling with is getting a grid connection in the first place. And then once they get one, these grid connections increasingly restricted. So there are some technical restrictions being put onto those grid connection by the grid operator. Whereas in the past, there was basically a guarantee to a full unrestricted grid connection. And these technical limitations we call flexible grid connection agreements, and they could take any shape, basically. So they could constrain how much energy the battery is allowed to feed into the grid or how fast the battery can change its power output. So constantly, maybe you could take us along your day-to-day business and how that relates to these flexible grid connection experience. So is this something that you just deal with once you have a new client that might have a flexible grid connection agreements or do you already get into the project development at an earlier stage and maybe advise on certain flexible grid connection agreements? So I think they're actually fitting quite well with our overall value proposition. So as entries and as Stefan pointed out, we generally see ourselves as an enter and service partner. So we come in at an early stage and then really support our clients until life operations of battery projects. So I described it sometimes like we are a friendly neighbor. You ask for advice when you build a house in your new neighborhood. Ideally, we both get something out of it at the end. So we have a new, a nice adventure as a neighbor and you have an early introduction into the neighborhood. So when we get client requests and/or when clients are dealing with flexible grid connections and agreements, there are different stages where we get involved. So I think the unique point we speak with a lot of DSOs. So we can share experience and common practices with DSOs in a lot of cases also. We have multiple projects with one crypto operator. So clients benefit from basically the view or the opinions that we have built. The second, battery developers are building their business case. Obviously, critical restrictions have a strong impact on the potential revenue that they can generate. So when they're in early discussions, they ask us, for example, if they get a 10% ramp rate, what will be the effect of the business case? And then maybe the third run a bit more broader, which restrictions in generally hurts. So you've outlined to quite a few. We obviously also see connection agreements with combinations of these restrictions. So that's where we come in. So I would say to you a question, almost on a day today at an early stage, we speak to clients, we advise them on feedback today from seafood crypto operators. I think the important point is what I said at the beginning. Generally, we really focus on understanding each battery and each project in detail because then we are convinced you can get the ideal outcome for a trading result. Crit connection now obviously being the most critical threat, but similar to similar conversations for volunteer parameters, for example. Thanks a lot, Konstantin. And how does this collaboration with grid operators go or maybe the negotiation on a client's side? So is there really room to negotiate a certain flexible grid connection agreement? Because I could imagine it's quite an imbalance of power. Yeah, I think that is exactly right. Now, so the imbalance of power obviously exists, but at the same time, it is clearly our aspiration. And we also see it that it works at times to make sure that you can that you can negotiate those agreements. And as we try to bring it across before, for us, it's really about making sure that we can capture the highest possible value from batteries. And if we talk about value a bit more broadly than only making money for our clients, which of course is the core thing that we want to achieve, but there's also systemic value that batteries can provide to the system. And this only works when you work hand in hand with all the parties involved. And that of course also includes secret operator. And I think one aspect that is also very important around this is that those risks that those restrictions, they're not as zero sum game. Now, so depending on how you design those restrictions, releasing them or making them a bit less strict is actually beneficial for everyone involved. Now, and I think that is kind of the aspiration and the idea that we have to follow here that we find a way of how we can make sure that the restrictions are as little as possible, but as large as they are as they are needed. And therefore what we like to do when we see that the grid operators are open to dialogue and more and more are opening up, we try to understand very precisely what other specific issues that they're facing in the system and how battery would interlink with them. And that is obviously a very local conversation that you need to have in the mountains that is different than at the northern sea, for example, in Germany. And then we have to understand what kind of levers we can pull from a systemic perspective and what the impact would be on the business case. And then last we have to discuss how we would set things up from a technical perspective. Then once we are operational to make sure that the respective battery that we are working with would indeed be working in a decent setup, so to say, with regards to the grid. And to give you a very specific example, a few weeks ago, we, for example, looked into historical analysis of load profiles together with the grid operator and we overlaid this with the simulation, what we would have done in the same time with the battery. And that of course then allows us a bit to understand where what kind of problem could emerge. And then based on this, you can design a password. Thanks a lot Stefan. And I think you've made a very good point that it's quite location specific and that the best approach is probably to find the sweet spot for both sides and that it's really up to the details of the contract. At Aurora, we're also currently looking at a lot of different flex whiprit connection agreements. And we also see that the impacts can be from marginal to quite heavy, depending on what conditions you impose on the battery. I think one restriction that's normally not that harmful is, for example, what I said earlier that if you forbid the best to discharge at noon hours, when typically there is a lot of sun and prices alone, you wouldn't really see that much loss in revenues because typically this is not a time when you would like to discharge your battery anyways. But then of course, there can be much more workflow extreme cases. So I would like to understand a bit more what your perspective on these different kinds of flexible grid connection agreements is and what experience this you have made. So yeah, how many hours, constrain you or kill your business case, maybe is there anything general you can say about that? Let me take that one as well. Unfortunately, the answer is it very much depends. I think the example that you just gave is perfect for this because if you get a restriction, for example, on the feed-in in an area where you would be seeing a lot of solar, yes, most likely the restriction is not as severe from a business case perspective, but that might change on how exactly that restriction is being designed. So the one thing is obviously the number of hours, and the other bit is a bit how is that being designed with regards to how dynamic is that for instance. And if you were to have restrictions designed in such a way that you would have to follow this, no matter what the physical reality is on a given day, things might become pretty expensive because there will be days where there's not so much generation in noon hours where maybe at noon prices are high-ish, where it would overall help for the battery to feed into the system, both from a commercial and from a technical perspective. That's what I meant before with it's not a zero-sum game. There are instances where it actually makes sense to work a bit smarter. So maybe taking this in a bit more of a structured fashion, I just wanted to refer back to the example, this is what kind of restrictions do we see? We see charge and discharge restrictions, we see restrictions on the provision of engineering services. So basically the question of how much of my power can I commit to the FCR and AFR frequency response services? We see restrictions on the ramps, so that is how much power I can increase in a second or in a minute. So basically how fast can I ramp up my power? And then there are also restrictions around the reader's patch schemes. And of course, now all of them, they are bit on a sliding scale. So if I only get a couple of hours and we probably say that below 1000 hours a year, it's most of the time doable depending on the exact project, then the revenue impact would be rather narrow. Also when the ramps are still at a speed where I can ramp up my power with more than 15% per minute, that should also be okay. If I'm being read as patched according to the normal German BDEW processes, that should also be fine. But if I were to be constrained in a direction of I'm not allowed to be factual to provide engineering services, if the restrictions that I would be facing come very unannounced, so that I can basically also not adjust my bidding early enough. If readers patched just not being remunerated, if the ramps are so flat that it takes me an hour to ramp up to full power, then obviously the business case is pretty dead. Now so unfortunately, it's hard to give a precise answer. It really depends on the project and how the grid operators then point to that. It's a busy question of how many dimensions or how many boxes do you take in terms of restrictions? Correct. Nice. Stefan, you just mentioned the ramping constraints. So this is currently a big bus word in a German market. So let's talk about this for a few minutes. Constantin, could you maybe explain for our non-technical audience what ramping constraints are and what you think about these? Yeah, absolutely. And you said it right, right, ramps is probably the most the most discussed topic in the in the bus word and everyone has their philosophies about ramps and how hard for they can be for a business case. So in simple words, it's right how it defines the speed on how quickly you can provide the full power. So basically how quickly can the battery fully chart or discharge from the grid? What's important right in the standard grid connection environment? This is usually or this is 40 percent per minute. So 40 percent of max power per minute. What's also interesting maybe before we go into ramps, right? We see this actually as a strength of batteries that they compare to, for example, fossil fuel plants can actually discharge or charge in a very quick quick way. I think we also see that this is increasingly recognized. So let's start a bit with the positive, right? And that there are projects in development that support the grid, even in a large scale, maybe not directly related to ramps, but I think also in in the latest oral report, right there for for crit booster projects now with the latest ampere on an idea for being announced. So I think there's a general tendency of recognition that the quick charging in this charging of batteries can actually have to have the grid. Now at the same time, there is still a certain level of insecurity that this quick charging in this charging can also create instability. And that's why we see more and more cryptocurrencies also introducing ramp rates as part of the flexible grid connection. And just refer to anything above 15 percent, is usually no problem. And that's not impacted. But we see also quite the extreme cases to 6 percent, 10 percent. And obviously if you then apply this to an optimization, then you actually have an impact because you cannot in a 15 minutes work right, use the full capacity. How do we see that? If you look at it from a grid perspective, I think there's one important point and it goes back to what we just discussed earlier. If it's a local web, like if it's a local characteristic or driven by local characteristics, by then the understanders and then we can work with our clients with grid operators on to what extent does the ramp make sense. What we don't like are what we unfortunately see are kind of bulk rates. So there's a standard ramp just applied across the grid operator just to, yeah, for insecurity. What we also notice is that grid operators with a good monitoring infrastructure actually understand them quite well, or better prediction, better in forecast state. So they add the ramp really is applied for specific, for specific reason. Now if we look at how we look at it from a trading perspective, I'd to give you an example, if we have a large asset just on the criticalness of 60 megawatt, if we have a ramp of 6 percent to fully charter, this try to take significantly longer than a 15 minutes block. So that's why we have to factor didn't our optimization to actually get a good result. So we set the targets basically cross-box and just have a smarter way of dispatching batteries. So in summary, what is important, obviously, that we try to negotiate or steer the ramps to a reasonable level. And then we believe that with a smart optimization, we can still generate significant upside and returns for clients. Yeah, this aligns quite well with our view at Aurora, that in most cases, you can deal with these constraints, but in extreme cases, it can have quite a large chunk of your revenues. I wanted to touch upon the point you made in the beginning, regarding the fact that these ramping constraints are actually taking away the advantage that batteries have of being super quick in reaction time. And I think this is a quite good example of why this nerdy topic of ramping constraints, which could put some people to sleep, is quite important, because it shows that we're basically reaching out this bottleneck of our market design, where we don't have the infrastructure in place, we don't have data flows in place to actually use this superpower of batteries in a better way. But instead, we constrained them beyond what they could do and beyond how much they could help the power grid. And especially in Germany, I think it's a problem because we have more than 800 grid operators, and we're seeing this very decentralized solutions emerging, and there are hundreds of different contracts being discussed, being negotiated, where there could be a much more market-based, much more efficient solution, and at least that's my view as an economist, that we're trying to do something at a decentralized level that could be managed much better with a market solution. So what I'm alluding to is, do we need more local prices, or could there be a better way to price in the constraints that the grid has? Stefan, maybe you have a view on this. Yeah, that's my favorite topic. Despite only being someone who studied business administration, yeah, but the example that I like to bring up most frequently when I talk about our amazing actually found it to be active in the energy space, and the space that's specifically that we are working in is that I'm actually very, very mesmerized almost by how well the market functions as a coordinating force, and how much it's really acting as a coordinating force that creates welfare. And I think overall in the energy industry, we have come quite far with this, now so I think overall the energy market helps us do the right things for for batteries, also in a sense of what is helping the system overall, yeah, and I think that is then great that we can help the system in at the same time make money for the for the asset owners and the other stakeholders involved. But indeed, we are still facing some some form of imperfections where I think we would be better off if we were to use the force of the market for it as well. And from our perspective, local prices in whichever form they would they would emerge, they would set the head because all the restrictions that we have been discussing right now, the ramps are probably not only a local price issue, they are probably also a bit of a digitalization issue and a visibility issue, but many of the other issues that we are seeing and the restrictions that we are talking about, they are a result of us not being able to have a different piece of price information on which we can base our optimization. And we as antics, we would be very much in favor of having a price overlay that we would be then considering in our optimization. Right now, we simply don't have the piece of information. So it's becoming extremely difficult to do the right thing because we don't even know what the right thing is beyond saying, yeah, probably that is a bit of a solar driven grid and so on and so forth. So yeah, I'm repeating myself, but overall, we would be very much in favor of having some form of local price mechanism. I think the question here is how do we get there fast enough and efficiently enough? Yeah, I do acknowledge and understand the fact and that this is not trivial to roll out and maybe we don't have to get to the picture perfect nodal price solution, but I think overall getting in that direction at least so that we get to an even higher correlation between optimizing revenue and doing the right thing for the system, this overall would be extremely beneficial. Yeah, I see I'm preaching to the converted there, so it's to economists talking about the advantages of market based solutions. Nice. Yes. Let's let's move on to another topic that's currently trending in Germany, which is the famous green storm fighter. So this is another tool in the toolkit to deal with a constrained grid. So basically, the idea is that you add a battery to a renewable assets. If you can't get a grid connection and then you just charge it from the renewable asset entirely. So currently we have roughly half a gigawatt of these battery storage online and of course the direction of travel is clearly up. So Stefan, do you have already such assets in your portfolio and how do you think about these green storage projects? Yeah, we do and I have really two hard-speeding in my chest when talking about these projects because obviously that's the business guy in me that says okay, it's it's extra business and let's work with it and we there are assets that that simply come in this form and they still require flexibility optimization solution. So we should provide it. The other hard obviously says it's a shame that we're not using the full potential of those projects because in the end in those scenarios no matter how exactly you design the project, the battery will not utilize its full potential. And I think overall of course it is good that we co-locate batteries with with renewables physically or also virtually because that's in the end what what the battery helps to achieve. Yeah, that we that we store electricity when we have too much of it and then we discharge it again when we have too little of it in the system. But in those green co-location scenarios we we are basically right now at least missing a lot of potential that would emerge from the provision of insularies services and also from charging from the system when when maybe the solar side is not producing at full speed. Yeah, but there are still moments where we have too much energy in the system. Maybe then caused by by a lot of wind generation or so and that's a bit of a shame that the batteries cannot cannot be used for it. Yeah, so overall it's good that we see more batteries obviously but I think the green co-location scenarios they are bit they're a bit on a fine line with regards to how much how much value they are from the system perspective. Thanks a lot and I mean these green storage projects also from a revenue side are much more difficult to finance because the business case of course compared to a stand-alone battery system is just the more on the wider side. Would you say this is a German this is a German topic and how does it compare to co-location in other countries maybe constantly into you have a view on this. Yeah, so I think if you look at co-location on on a European basis on the at least in the countries that we active in I think that's absolutely common team. It is a rising topic across markets and also driven mostly by the challenge that PV has former profitability or from a return perspective and then to to some points obviously on grid contrastion I think in some markets. That's so much for the for the similarities. If you look at where the markets stand obviously there are probably a few differences from a dimension perspective one in terms of installed solar capacity where Germany obviously leading Spain has 40 gigawatts and then Italy and Poland less so Poland is around 22 gigawatts so there's less to build on initially. So if you look at the markets from a maturity level there's one dimension is the installed solar capacity Germany leading and then Spain obviously has roughly 40 gigawatts Poland 23 gigawatts so there is an installed solar capacity you work as if you look at the other angles from a regulatory environment as well as from a grid connection environment these really varied by a by market and then the last point obviously where there's flexibility or storage stand stands overall and I think that's interesting to look at the different to different markets so if we start with Spain a lot of installed solar a lot of problems from a return perspective for the for the asset owners currently very immature for the battery market so what we see there is that currently now more than 60 percent of the RTV projects actually are co-located so we see a lot of additions to existing projects or the ones that are that are co-located so Spain is interesting that we see it as a dominant co-location market but immature so far from the flexibility a storage perspective Poland has its own challenges so I think it's interesting because a lot of developers historically have done solar are now going into developing best projects locally I think from a co-location we see it significantly behind also from optimization or getting the best trading we set out of it writer complications in terms of subsidies and how they are really operated on the PV side so we see interest from our clients and we discuss it but significantly later stage and then Italy so far it's basically dominated by a standalone best best product so the co-location from an IRR perspective most are developing separately right grid connections are still still available so that's obviously actually actually there so less of a topic so I think across the markets we are set from the beginning it will come and it will develop but at a very different pace and very different setup and obviously Germany think from a regulatory perspective we're quite quite unique in our level of details thank you Gonstantin I think that's a great point to end and thanks a lot for being here with me today thank you Claudia what's the pleasure and thanks as well as Stefan for being with me thank you too that was Claudia Gunter senior research lead out of Rora talking to Stefan Schultzian founder and CEO of Antrix and Constantine Nicholas head of sales at Antrix thanks are listening to energy unplugged to do keep an eye on our podcast feet for more in-depth conversations with senior members of the energy industry the best way to do this is to follow the podcast via whatever platform you use