​Germany's new capacity market comes with a clawback. Every contracted unit pays back the day-ahead price above a strike, set at the running cost of an inefficient open-cycle gas turbine (OCGT). This is to stop gas plants being paid twice: once for capacity, and again through scarcity prices.

Each unit pays on its de-rated megawatts, in every quarter-hour the price is above the strike, whether it runs or not. A battery cannot discharge through a long scarcity period, so it pays on hours it can't earn in - with no de-rating or other protections taken into account.

On Modo Energy's October 2026 Central forecast, that clawback costs €25k per de-rated MW for a one-year contract in 2031/32. Over a 15-year contract, it averages €65k a year as scarcity events get bigger.

A gas plant earns most of that back from the same price spikes. A battery cannot. That has two consequences: firstly, the clawback can make capacity market contracts a net negative in the worst case, impacting the bankability boost of the capacity market as a secure contracted revenue stream. Secondly, a battery should aim to recover the clawback through its capacity market bid. Unless the power market reacts to the clawback, German battery bids will sit above clearing prices in Belgium, Great Britain and Italy, and close to where gas bids.

Key takeaways

• A battery pays the clawback on every scarcity hour but earns on only a few. A contracted 4-hour BESS would pay back about €23k per nameplate MW a year over 2032-2046, while the same spikes are worth only €3-7k of its merchant revenue.
• The clawback will likely push German day-ahead prices toward the strike. That matters little for battery revenue: even a hard cap removes only 2-5% of a 4-hour battery's wholesale revenue.
• The bid floor for BESS in the capacity auctions is the clawback plus that lost revenue. For a 15-year contract, it ranges from €65k per de-rated MW (if prices don’t react) to €9-32k if contracted plants hold prices near the strike.
• German batteries may not be able to undercut gas in the capacity market auctions the way they have elsewhere, because they need to price in the risk of paying a clawback they cannot earn back in the day-ahead markets.

The clawback charges every unit, running or not

Many capacity markets have clawback mechanisms, and the European Commission specifically asks for them to make sure capacity markets stay fair. The formula is what matters.

Instead of locking in a fixed price in the law, Germany is using a fundamentals-based approach. The clawback is triggered when the day-ahead price goes above the short-run marginal cost of an OCGT (and any ), the highest price fundamentals can justify - anything above that is scarcity pricing.