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Glossary · Energy industry & energy transition

Co-located Storage

Co-located storage storage photovoltaics wind energy Hybrid power plant grid connection

Definition

Co-located storage is a storage system that is operated at the same site or at the same grid connection as a generation plant. It usually involves battery storage that is planned, connected and marketed together with a solar park, a wind farm or both. Storage and generation plant are closely linked spatially and operationally. Technically and legally, however, the storage system remains a separate installation. It has its own power rating, its own capacity, its own control system and, as a rule, its own settlement. Co-located storage is therefore not a distinct storage technology, but a particular way of connecting and operating installations.

Technical parameters

Storage capacity in kilowatt-hours or megawatt-hours alone is not sufficient. Equally important is the power rating in kilowatts or megawatts. It indicates how quickly the storage system can charge or discharge. A battery storage system with 20 megawatts and 40 megawatt-hours can, in theory, deliver power at full output for about two hours. In practice it is somewhat less, because efficiency losses occur and the operator often limits the depth of discharge. For co-located storage, a third parameter is added: the capacity of the shared grid connection. It determines how much power the generation plant and the storage system together may feed into the grid at the same time.

There are two basic forms of coupling. With AC coupling, the generation plant and the storage system each have their own inverters and share the grid connection on the alternating-current side. This makes it easier to retrofit a storage system, and it can be controlled more independently. With DC coupling, the storage system is connected on the direct-current side of a photovoltaic system. This can reduce conversion losses, save components and absorb power that would otherwise be clipped at the inverter. In return, the storage system is more tightly bound to this one plant. The choice of coupling affects efficiency, controllability, retrofittability, metering concept and permitting. The description "battery next to a solar park" is therefore not sufficient for an assessment from an energy-economics perspective.

Distinction from related terms

Co-located storage must be distinguished from a standalone storage system. A standalone storage system, often called a stand-alone or grid storage system, is connected to a grid node without its own generation plant and typically draws its power from the grid. Co-located storage can also charge from the grid, but does not have to. It is often designed to absorb power from the neighbouring solar or wind plant when generation is high or the connection would otherwise be overloaded. Whether the storage system takes up only renewable power or also grid power does not follow from the term. This depends on the metering concept, on marketing and on legal requirements.

The term must also be distinguished from the hybrid power plant. A hybrid power plant combines several installations, such as photovoltaics, wind and battery, into a joint operating and marketing concept. Co-located storage initially only describes that generation and storage are coupled spatially or via the connection. A solar park with battery storage can therefore be a hybrid power plant, but need not be treated as such in every market or legal context. Also related is cable pooling. Here, several installations, possibly from different operators, share a grid connection that is smaller than their combined capacity.

Why the grid connection is the focus

Co-located storage is worthwhile above all because grid connections are scarce and valuable. Solar and wind plants reach their full feed-in only in a few hours of the year. A solar park feeds in a lot at midday and not at all at night. A wind farm has different profiles, but also fluctuates. If a storage system is located at the same connection, it can charge when generation would overload the connection or prices are low. It feeds in later, when the connection is free again, demand is higher or ancillary services are needed.

What matters is therefore no longer the maximum installed generation capacity, but how much connection capacity can be used over time. An example: A solar park with 100 megawatts of module capacity has a grid connection of 70 megawatts. Without storage, generation above this limit must be restricted, through inverter sizing or curtailment. Co-located storage can absorb part of this otherwise lost energy. How much depends on its power, its capacity and on how often and for how long generation exceeds the limit. The storage system does not replace grid expansion. It can, however, make better use of an existing connection, especially where land is available but new connections take a long time.

Legal framework in Germany (as of November 2026)

In Germany, since February 2025 § 8a EEG 2023 allows grid operators and plant operators to conclude a flexible grid connection agreement. This limits the maximum active power feed-in at the connection, and on request can be staggered by time windows. The plant operator must technically comply with the limit at all times. If plants or storage systems of other operators are connected at the same grid connection point, they must consent. In addition, joint responsibility and joint and several liability must be regulated. The provision is a discretionary rule ("may" provision); it does not directly give rise to a right to such an agreement. For storage systems that also draw grid power, specialist publications refer to § 17 EnWG. It provides for flexible agreements for feed-in and withdrawal.

For EEG support of intermediately stored electricity, § 19 paragraph 3 EEG 2023 provides three options:

  • Exclusivity option: The storage system takes up exclusively electricity from renewable energies or mine gas in the calendar year. The support then also applies to the stored electricity fed in.

  • Delimitation option: The storage system may also take up grid power. Support is granted only for the share that is determined as eligible for support under a determination by the Federal Network Agency (Bundesnetzagentur) and is demonstrated. The basis is quarter-hourly measured values.

  • Flat-rate option: It applies only to solar plants with a combined capacity of at most 30 kilowatts behind one feed-in point and caps the supported quantity at 500 kilowatt-hours per kilowatt and year. It therefore plays practically no role for large co-location projects.

The Bundesnetzagentur adopted the necessary determination on the market integration of storage systems and charging points (MiSpeL) on 1 October 2026. During a transitional period until the end of September 2027, the two new options can only be used with the consent of the grid operator and the metering point operator. The flat-rate option additionally requires state aid approval. For co-located storage this means: A storage system at an EEG-supported plant may in principle also use grid power for arbitrage without losing the support for the green share entirely. To do so, it needs a suitable metering and delimitation concept. Whether a project meets the requirements in an individual case depends on metering, plant configuration and support regime.

Economic benefits and revenue sources

Whether co-located storage pays off depends on several revenue sources. It can exploit price differences between hours, that is, engage in arbitrage: charging at low or negative prices and discharging at higher ones. It can offer balancing energy or other ancillary services, provided it is prequalified and meets the technical requirements. It can reduce curtailment of the neighbouring plant and make marketing more predictable. In some cases it also helps to comply with contractual delivery profiles under a power purchase agreement. These revenues cannot simply be added up, because the same storage system is available only once at any given time. Capacity reserved for balancing energy is missing for arbitrage. Each additional cycle also ages the battery.

Common misconceptions

First, co-located storage does not automatically relieve the grid. It can smooth the connection and reduce local feed-in peaks. But it can also create additional load if it charges from the grid, or feed in additionally when the grid section is already stressed. A storage system optimised purely on exchange prices follows the price signals of the wholesale market and not necessarily local grid bottlenecks. It becomes grid-serving only with suitable connection conditions, control requirements, incentives or markets for local flexibility.

Second, not every kilowatt-hour discharged comes from the solar or wind plant just because the battery stands next to it. Without a suitable metering and balancing concept, the electricity can come from the plant, from the grid or from both. This distinction is important for EEG support, guarantees of origin, green electricity products and proof of industrial decarbonisation. The MiSpeL determination regulates the allocation for support and levy privileges. Other proofs are subject to their own rules. Physical proximity does not replace an energy-economic allocation.

Third, shared infrastructure is often assessed too simply. A shared grid connection, a shared substation, shared land and coordinated control can reduce investment costs. At the same time, the project becomes more complex. Grid operators examine connection capacity, protection technology, reactive power and operational management. Operators must coordinate metering concept, marketing, schedules, remote controllability and availabilities. Financiers examine whether the revenues from generation and storage are secured separately or jointly. Co-located storage is therefore not a mere add-on device. It changes the operating model of the entire plant.

Role in the power system

For the power system, co-located storage matters above all where renewable generation is growing faster than grids and flexible demand. Photovoltaics leads to more and more hours with very low or negative prices, while power and energy are still needed in the evening. Battery storage shifts energy over hours, not over weeks. It improves short-term flexibility, but replaces neither seasonal storage nor firm capacity for longer periods of low wind and solar output ("Dunkelflauten").

At the institutional level, conflicts often arise where technical possibility, market rule and responsibility diverge. The operator optimises the storage system in the market. The grid operator needs reliable information on feed-in and load. Regulation sets charges, levies, metering obligations and eligibility for support. Economically sensible operation is therefore not automatically the best operation from a grid perspective. If co-located storage is to serve the system, connection rules, price signals and settlement must be designed so that local scarcity and supraregional electricity prices do not work against each other. The term is precise only when it includes spatial proximity, shared connection, metering, charging sources and marketing.

Sources

Related glossary entries

Edited by eCMS on 11.11.2026 17:33

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