​A behind-the-meter (BTM) battery sits on the customer's side of the grid connection, often alongside an industrial load. Rather than co-locating a battery with a generation asset, for many commercial and industrial (C&I) users it is beneficial to add a battery to their load site. But the shared connection point shapes what the battery can do and how it earns money.

In Germany today, the main value of a behind-the-meter battery does not come from wholesale trading or balancing markets. It comes from grid fees. Large industrial consumers pay up to 90% less in network charges if they keep a flat load profile, and a battery can help flatten that profile. With grid fees around 40-50% of electricity costs for many industrials, the grid fee savings dwarf any wholesale arbitrage the battery could capture. But as the regulator overhauls these grid fee discounts, the other uses of batteries come into focus more: arbitraging the cheapest power for consumption, participating in balancing markets, and forming the load to whatever shape the next regulatory update prefers.

Key takeaways

• In Germany today, a BTM battery earns mainly through grid fee savings, not wholesale or balancing markets.
• Flat-load sites can cut network charges by up to 90%, bringing a strong incentive for a battery to help keep a flattened load profile.
• The AgNes reform will scrap that flat-load discount and reward flexibility instead, reshaping the business case.
• Batteries keep a role under the new regime, but returns won't be clear until the reform lands. Wholesale and balancing market benefits of behind-the-meter batteries will stay the baseline.

Grid connection and load shape define what the battery can do

A standalone battery has its own bidirectional connection. It charges when prices are low, discharges to the grid when prices are high, and pockets the spread. A behind-the-meter battery does not have that freedom, but can still be of large value to commercial and industrial (C&I) electricity users.

Most BTM connections are one-directional. The battery can charge from the grid, but it cannot export back. So the discharge side has no wholesale market access. It can only discharge to serve the host's own demand. A site can apply to make its connection bidirectional, but this needs grid operator approval and can take years. Many industrials with on-site solar or other generation already have a bidirectional grid connection. Adding a battery can make this into a hub including generation, load, storage and grid access in one.

One-directional grid connections still allow for energy arbitrage, but only in line with the host's load shape. In a flat demand profile, for example, the battery can still arbitrage as it would with a bidirectional grid connection. If it charges at full power from the grid during the lowest prices, it can discharge to meet demand during the highest prices. The opportunity cost of not having to draw power from the grid during the high-price period is, in theory, the same as discharging into the grid. But if the site does not need power during the expensive hours, that value disappears.

Connection size is a second hard limit. Charging adds load on top of the demand already flowing through a fixed connection at a certain point in time. A site running close to its limit may need a larger connection to charge at the cheapest hours, which means another approval and a construction cost subsidy (Baukostenzuschuss, BKZ) payment. With this additional cost in mind, battery size becomes a determining factor in optimising the returns from import connection capacity and the demand profile.

Balancing access is asymmetric, or complex to wire up correctly

BTM batteries can still provide , but the load shape constrains it. Some industrial sites already provide aFRR in Germany, depending on how important their timing is for the industrial processes they serve. If they can be shut down on 5 minutes’ notice, this can be a lucrative revenue stream. In theory, BTM batteries could help even with less flexible loads, but there is less precedent for it.