Flexible Connection Agreements (FCAs) trade firm (unrestricted) grid rights for faster access, allowing more batteries to connect sooner, but at the cost of lower revenues when dispatch is constrained.

FCAs typically limit assets through import/export caps, ramp-rate limits and ancillary-service restrictions.

This analysis focuses on import/export caps, which have the largest commercial impact.

For a 2-hour, 75 MW battery with 2028 COD, these limits reduce average revenues by 13%:

As FCAs move toward becoming standard practice in grid-connection negotiations, understanding how these limits reshape dispatch, revenues and IRR is essential for lenders.

To learn more, reach out to the author - cosima@modoenergy.com

Subscribers will learn

• How an example FCA alters daily operations and reduces revenues by 13%
• The impact on internal rates of return
• How much of the loss could be offset through lower BKZ fees

FCAs provide faster grid access at a price

FCAs allow system operators to approve new connections sooner , as long as the operator accepts limits on how much capacity it can use during constrained periods.

There are three types of FCAs. Based on scope, lead time and reward structure, they impact projects differently.

In practice, import and export limits are often tied to other operating constraints. Common constraints are ramp rates (limits on speed of power output changes) and ancillary service restrictions (limits on how much of total capacity can be bid into ancillary markets).

Exact terms are negotiated case by case under two legal frameworks:

• § 17 (2b) EnWG - applies broadly to generators, standalone storage and consumers.
• § 8a EEG - applies to renewables and co-located storage only.

How dynamic FCAs reduce average revenues by 13%

Operational impact

With a firm (unconstrained) connection, the battery can use 100% of its import and export capacity at all times. Under a dynamic FCA, those limits vary by season and time of day: