BESS Investment Analyses
Ongoing quantitative analyses of battery energy storage (BESS) economics under changing regulation.
Chronological record — latest analyses on top.
July 2026
Regulation as a weighted scenario timeline
Grandfathering under §118 EnWG is a state pledge — and capital is committed before it is settled whether the pledge holds. If it breaks, the break acts forward and permanently on cash flows from the cut-off date: a lasting charge on grid consumption. We treat this break not as a forecast but as a weighted stress test (25%) on a scenario timeline — exemption, political branching, a zonal price level as a further layer.
In figures: the substantiated, mild path costs ~€3.1m over the lifetime; if the pledge breaks, ~€33m — more than a third of project value (P50 ~€84m). Not negative in any of the 1,000 paths (mathematical upper bound, TRC). MEAG (asset manager of Munich Re/ERGO) shows the magnitude: Spain guaranteed solar feed-in tariffs and cut them years later — investors such as MEAG suffered substantial losses on previously profitable portfolios. A state-granted benefit, later withdrawn — the same mechanism our stress test quantifies. The project is bankable in both worlds — the difference lies in your terms.
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June 2026earlier version
FID Cutoff: §118 Grandfathering and the Investment Decision
Grandfathering under §118 EnWG applies only with a final investment decision (FID) before the AgNes determination takes effect. The bottleneck isn't revenue — it's FID readiness before the window. Instead of a single number, the analysis delivers a distribution (P5/P50/P95 from 1,000 Monte Carlo paths) — the de-risking evidence a bank needs.
Methodologically, regulation (and, in future, further drivers) is modelled as a sequence of scenarios along the time axis: the switch dates are fixed (three scenarios mean two switches). Per phase there is either a single fixed scenario — a deterministic sequence is the standard case — or, where the future is uncertain, several scenarios drawn according to assigned occurrence probabilities (stress test). Regulatory scenarios are implemented today; economic ones (e.g. a multi-year inflation shock) will follow.
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April 2026Archive · superseded
BESS Investment Analysis Under Regulatory Uncertainty
Quantifying the §118 expiry risk: standalone BESS bankability drops from 65 % to below 15 %. This reflects the April 2026 status and is partly superseded by BNetzA's determination of 27 May 2026 (FID cutoff / AgNes) — AP1/AP2 are no longer pursued.
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