Every term with a definition, the reason it matters, and the pages where it is applied. In running text elsewhere on this site these terms are marked with a dotted underline.
Arbitrage
Definition
Charging when power is cheap and discharging when it is expensive, on the day-ahead and intraday markets. The margin equals the price difference minus losses and costs.
Why it matters
Arbitrage is the revenue model that grows with PV expansion: the deeper the midday price falls, the larger the spread.
Acquisition of individual assets and contracts instead of the company. Each contract must be transferred separately, often with the counterparty's consent.
Why it matters
An asset deal avoids a company's legacy issues but is more laborious for projects with many contracts.
Reserves for frequency control procured by TSOs: frequency containment reserve (seconds), automatic and manual frequency restoration reserve (minutes). Batteries suit FCR and aFRR because of their response time.
Why it matters
Balancing was long the main revenue source of storage; with growing storage capacity prices fall, which is why marketers now combine several markets.
Plants behind a consumer's meter, for instance on a factory site. They primarily lower the site's own electricity bill and are marketed only in addition.
Why it matters
The value of behind-the-meter storage depends on the site's load profile, not on the power market.
Battery Energy Storage System: a grid-connected battery plant made of cells, battery management, inverters, transformer and controls. In practice, BESS denotes stationary large-scale storage from about one megawatt.
Why it matters
A BESS is described by power (MW) and capacity (MWh); the ratio of the two determines which markets it can serve.
Storage and a generation plant (usually PV or wind) share one grid connection point. The storage can charge from the plant or, depending on the concept, also from the grid.
Why it matters
Co-location uses existing grid connections, lowers connection costs and shifts generation peaks into high-price hours. The 2026 grid connection package foresees priority connection for such storage.
One-off contribution by the connecting party to grid costs, calculated under the Federal Network Agency's capacity price model. Since the Federal Court of Justice decision of July 2025 it is also permissible for battery storage.
Why it matters
In unfavourable grid conditions the BKZ can amount to a double-digit percentage of the investment and tip a project.
The auction for next-day electricity, cleared at noon on the previous day. Since 1 October 2025 the German/Luxembourg market area has been cleared in 96 quarter-hours instead of 24 hours.
Why it matters
It is the market on which storage Arbitrage takes place, and the price there is formed by the merit order. Shorter products mean more price movement within the day — and therefore a different calculation for the C-rate.
Operator of the low-, medium- and high-voltage grids to which storage up to about 100 MW is usually connected. It processes the connection request and issues the connection offer.
Why it matters
The DSO is the most important counterpart in development; its procedures and deadlines set the schedule.
Purchase agreement for a project concluded before ready-to-build is reached. The price is tied to milestones; transfer happens when defined conditions are met.
Why it matters
Forward structures give the developer certainty about the buyer and the investor access to pipeline ahead of competition.
Binding confirmation from the grid operator that a plant of a given capacity can be connected at a given connection point. It follows the grid compatibility study.
Why it matters
The offer is the single most valuable building block of a project: without it there is neither substantive permitting nor a financial model.
Inverter operating mode that sets voltage and frequency itself instead of following an existing grid. Grid-forming storage can provide inertia and stabilise networks.
Why it matters
As rotating power plants retire, grid-forming capability becomes a requirement rather than an option.
What one more megawatt-hour costs once the plant is running: fuel divided by efficiency, plus CO2 price times emission factor divided by efficiency, plus variable operating costs. Capital cost and depreciation do not count.
Why it matters
Because wind and solar have no fuel, their marginal cost is zero — everything else follows from that. And because efficiency sits in the denominator it helps decide the order: an old unit runs dearer than a new one on the same fuel. The merit-order cut lets you work it through.
The dispatch order of power plants: they are called in ascending order of marginal cost until demand is met. The most expensive plant still needed sets the price — for everyone, including the cheaper ones.
Why it matters
It explains why storage charges cheaply at midday and discharges expensively in the evening without anything changing at the plant. The merit-order cut shows the curve with sliders for load, feed-in, gas price and CO2 price.
Determination by the Federal Network Agency on market integration of storage and charging points. It allows storage to mix subsidised green power and grid power without losing EEG support.
Why it matters
MiSpeL makes co-location with subsidised PV plants considerably more flexible; entry into force planned for 1 October 2026.
Hours in which the exchange price falls below zero: whoever takes electricity is paid for it. This happens when feed-in exceeds load and generators would rather pay than shut down.
Why it matters
Below zero marginal cost logic no longer applies; what applies is the willingness to pay to stay online — technical minimum load, heat supply, support rules. For storage this is the cheapest hour of the day, and the more storage is connected the rarer it becomes. Both can be reproduced on the merit-order cut.
Application to the building authority to clarify individual questions of permissibility in advance, for instance planning permissibility in the outer area. The result is a preliminary building notice.
Why it matters
A positive preliminary notice is an early, robust proof for investors before the full permit exists.
Ready to build: land secured, grid connection offer accepted, permits obtained, engineering complete. From this point only the decision to build is missing.
Why it matters
RtB is the stage at which developers typically hand over to investors, because development risks have been removed.
Enables flexible connection agreements: the grid operator may connect although capacity is not always sufficient, if the applicant limits feed-in or offtake in congestion situations.
Why it matters
For storage this is the way around a queue: earlier connection in exchange for limited availability.
Governs which projects are privileged in the outer area. Since December 2025, battery storage in spatial-functional connection with renewable plants (no. 11) and larger storage near substations (no. 12) is privileged.
Why it matters
The privilege often saves a development plan and thus months to years of procedure.
Special purpose vehicle: a company founded for one project, usually a GmbH, holding land, grid connection, permits and contracts. It ring-fences risks and is the object of a share deal.
Why it matters
Institutional investors expect a separate company per project without unrelated history.
Operators of the extra-high-voltage grid: 50Hertz, Amprion, TenneT and TransnetBW. Very large storage connects here directly; TSOs also procure balancing energy and order redispatch.
Why it matters
For storage in Bavaria, TenneT is the responsible TSO; balancing markets are run jointly by the four TSOs.
Technical connection rule for customer installations at the medium-voltage grid (1 to 60 kV), including storage. It sets requirements, verification and the certification process from unit certificate to declaration of conformity.
Why it matters
Without a plant certificate under VDE-AR-N 4110 there is no commissioning at medium voltage. The process takes months and belongs early in the schedule.
