Balance-sheet storage (accounting-based storage) · Glossary

Balance-sheet storage refers to the calculated, contractual or market-based allocation of quantities of electricity across different points in time. The same physical quantity of electricity does not have to be taken up in a specific store and released again later. Generation at one point in time is booked in such a way that it can be attributed to consumption at another point in time. The storage effect exists only on paper: in billing, in the balancing group, in the supply contract, in schedule management or in the portfolio of a market participant.

The relevant quantity is usually an amount of energy in kilowatt-hours or megawatt-hours. An example: a photovoltaic system generates 10 megawatt-hours at midday, and a consumer draws 10 megawatt-hours in the evening. A supply model can link both quantities in the balance. Physically, however, the midday electricity does not flow through the grid as an identifiable unit, wait there until the evening and then reach precisely this consumer. Electricity follows the electrical conditions of the grid and is not transported separated by origin. For balancing, the path of individual electrons therefore does not matter. What is decisive is how feed-in, withdrawal and balancing are allocated by time and quantity. In the evening, the energy must therefore actually be generated by some plant or released from a store.

Distinction from physical storage

Physical storage exists when energy is actually converted into another form and later used again as electricity or as a substitute for electricity. Battery storage systems store electrical energy chemically. Pumped-storage plants pump water into a higher-lying reservoir. Hydrogen storage uses electricity to produce hydrogen by electrolysis, which is later used for energy purposes. In all cases there is a technical installation with charging power, storage capacity, efficiency, losses, availability and a connection to the grid or to a consumption installation.

Balance-sheet storage does not have these technical characteristics. It can represent a shift in time, but it does not store energy. An example: a contract credits surpluses from a generation plant to a customer for later. This creates neither a technical reserve for a Dunkelflaute (prolonged period of low wind and solar output) nor a guaranteed discharge capacity or grid support at the location of a bottleneck. This requires real counterparts: a store, a flexible load, a controllable generation plant, a trading partner or a liquid market that supplies electricity at the relevant time.

This distinction is important when assessing business models. A virtual electricity store can be a sensible billing model, for example when a plant operator builds up electricity credits by calculation and offsets them later. However, the term does not automatically mean the same system performance as a battery or pumped-storage plant. A virtual model can sell a storage effect if real flexibility is procured or operated in the background. Without this backing, it remains a balancing rule.

Example electricity cloud: credit instead of battery

The best-known example for households is electricity cloud or prosumer tariffs. Surplus solar electricity is fed into the grid and credited to an electricity account. Later, the customer draws electricity from the grid and offsets it against the credit. The Verbraucherzentrale (consumer advice centre) points out that drawing electricity "from the cloud" is technically perfectly ordinary grid consumption. The concept therefore differs fundamentally from storage in one's own battery storage system. In its assessment, the cost and contract conditions are often complex. Such tariffs have so far mostly not been worthwhile for solar plant operators, because the feed-in tariff plus a normal residual electricity tariff is cheaper. For the assessment, the following therefore applies: the credit is a price and quantity rule in the contract. Procurement, grid charges and levies for the later grid consumption are still incurred and are merely distributed differently.

Balancing group, schedule and balancing

In the electricity market, generation and consumption are organised not only technically but also commercially. The central unit for this is the balancing group. There, feed-ins, withdrawals, trades and schedules are brought together. In Germany, every feed-in and withdrawal point must be assigned to a balancing group. Under § 4 paragraph 2 of the Stromnetzzugangsverordnung (Electricity Grid Access Ordinance, StromNZV), the balancing group responsible party must ensure a balanced position in every quarter-hour. It bears the economic responsibility for deviations. These deviations are settled via balancing energy. EU Electricity Market Regulation 2019/943 also prescribes, in Article 8 paragraph 4, a settlement interval of 15 minutes for imbalances in principle. Any monthly or annual netting is therefore based on this quarter-hour balance but does not replace it.

Balance-sheet storage can arise within a portfolio. A market participant generates or procures more electricity at one point in time than its customers consume, and later supplies more than is currently being generated. It must then sell the midday surplus or direct it into real storage or load shifting. It must fill the evening gap through trading, its own plants, load control or storage operation. Otherwise it causes balancing group imbalances in both quarter-hours. Physically, even the quarter-hour is not sufficient: the grid frequency depends on the balance of generation and consumption at every instant. Transmission system operators compensate short-term deviations with balancing power (control reserve).

The schedule connects contract and power system in operation. The StromNZV defines it as a statement of how much electrical power is exchanged between balancing groups in each time unit or is fed in or withdrawn at a feed-in or withdrawal point. A balance-sheet storage solution that relies only on daily, monthly or annual quantities ignores part of the system requirement. For the power system, it matters not only whether the same number of kilowatt-hours was generated and consumed over a year. It also matters whether sufficient power is available in every quarter-hour and whether grid bottlenecks, forecast errors and short-term fluctuations remain manageable.

Energy sharing: netting only within the settlement interval

How narrowly the legislator frames netting over time is shown by European energy sharing. This means the joint use of electricity, for example in an energy community. Under the Electricity Market Directive (EU) 2019/944, as amended in 2024, active customers may deduct the jointly shared electricity from their metered consumption. However, this applies only to electricity that was fed in within a period no longer than the settlement interval for balancing group imbalances. Taxes, levies and cost-reflective network charges remain unaffected. A credit over hours, months or seasons is not provided for in it. Such models are contractual arrangements of suppliers. How energy sharing is implemented in national law must be examined separately in each Member State.

Why the distinction is practically relevant

Balance-sheet allocation is useful in the power system because it facilitates the economic use of distributed generation and flexible consumers. It can help to represent self-supply, direct supply, tenant electricity, energy communities, corporate procurement or portfolio management. For market participants with several plants and consumption points, it answers the question of which quantities of electricity are attributed to which customer, site or product.

It can also be used to set incentives. If a consumer receives more favourable conditions when using electricity at the same time as renewable generation, it can shift its consumption. A heat pump, an electric vehicle, an electrolyser or an industrial process then uses electricity when a lot of it is available in the portfolio. In this case, the balance-sheet representation is not mere bookkeeping but part of a control model. It makes flexibility billable and can trigger investment in metering, forecasting and automation.

The limit lies where an allocation turns into a statement about security of supply or physical origin. A customer can be supplied with renewable electricity in the balance even though electricity from very different plants is flowing into the grid at the same time. Guarantees of origin, supply contracts and balancing groups allocate quantities of energy. They do not physically separate the electricity flow and do not guarantee that the procured generation takes place at the same time as the consumption. An hourly or quarter-hourly allocation narrows the time gap. It closes when temporal matching and real procurement actually coincide. However, even then the physical origin of individual kilowatt-hours remains a question of allocation, not of transport.

Typical misunderstandings

Free, loss-free storage: a shift by calculation has no technical efficiency, because no energy is converted. The backing behind it, however, causes costs and losses. Batteries lose energy during charging and discharging. Power plants cause fuel costs and emissions. A flexible load can impair comfort or production. And procuring electricity on the market becomes expensive when many market participants need it at the same time in scarce hours.
Annual balance equals system-serving: if a plant generates in a year as much electricity as a consumer consumes in the same year, this says nothing about the coverage of individual hours. Photovoltaics generates a lot in summer and at midday, but many consumption patterns occur in the evening, in winter or in industrial load profiles. A pure annual balance can support a climate balance or product advertising. It says little about storage needs, grid load, residual load or firm capacity. Whether a model is system-serving only becomes apparent in a time-resolved analysis.
Spatial level: balance-sheet allocation can link generation and consumption at different locations. The energy quantity in the balancing group may be balanced, yet a bottleneck can still arise in the distribution grid if a lot is fed in or withdrawn locally. Conversely, a local store can relieve the grid even if its quantities are netted in a larger portfolio in the balance. Commercial allocation and the electrical location of the effect do not necessarily coincide.

Relationship with market, grid and flexibility

Balance-sheet storage sits at the interface between market rules and technical requirements. The market allocates quantities of electricity, prices and risks, while the grid demands physical stability at all times. Flexibility connects both levels if it is measurable, controllable and reliably available at short notice. A supplier can offer balance-sheet storage products if it manages its portfolio in such a way that deviations remain limited and required quantities are procured. A grid operator, however, cannot automatically plan such products as grid-serving capacity as long as location, time, controllability and availability are not secured.

This separation is central for assessing system costs. Balance-sheet models can reduce transaction costs, simplify procurement and introduce customers to flexible consumption patterns. But they can also conceal costs if they make temporal scarcity, grid charges, balancing energy or the backing provided by other market participants invisible. A sound analysis therefore asks three things: Which real resource enables the shift? Who bears the quantity and price risk? And does the allocation fit the requirements of grid operation?

Balance-sheet storage is thus not an opposite concept to physical storage but a different level of description. It explains how quantities of electricity are allocated economically and by calculation over periods of time. It does not explain where the energy comes from in a scarce hour, what power is then available or whether a grid section is relieved. Used precisely, the term shows which parts of a storage effect come from technology and which from contracts, schedules, balancing group management and the liquidity of the market.

Sources

§ 4 StromNZV – Bilanzkreise — buzer.de (Wiedergabe der Stromnetzzugangsverordnung); unbekannt. § 4 Abs. 1–3 StromNZV
Verordnung (EU) 2019/943 über den Elektrizitätsbinnenmarkt — Europäische Union, EUR-Lex; 2019-06-05. Art. 2 Nr. 15; Art. 8 Abs. 4
Richtlinie (EU) 2019/944, konsolidierte Fassung vom 16.07.2024 — Europäische Union, EUR-Lex; 2024-07-16. Bestimmung zur gemeinsamen Energienutzung, Abs. 4 Buchst. a
Lohnen sich Batteriespeicher für Photovoltaik-Anlagen? — Verbraucherzentrale Bundesverband; unbekannt. Abschnitt zu Stromcloud-Tarifen
Stromnetzzugangsverordnung (StromNZV), Stand 22.12.2023 — Clearingstelle EEG|KWKG (Wiedergabe des Verordnungstexts); 2023-12-22. § 2 Nr. 1 (Fahrplan); § 4

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Edited by eCMS on 11.11.2026 15:41