The next phase of the energy transition

By Gerhard Kienzler, Country Manager, Germany

On 1 May 2025, the German electricity market set a new record for negative power prices. As large volumes of solar power fed into the grid and public-holiday demand remained low, the spot price briefly fell well below zero. What was once considered an anomaly is becoming a regular feature.

That day was not an outlier. It was a preview of what high-renewables grids will routinely demand.

Germany recorded 457 hours of negative electricity prices in 2024. Redispatch volumes involving solar PV installations reached around 1,400 GWh – nearly double the figure recorded in 2023. The first phase of the energy transition was largely about building capacity. The next phase will be decided by how well generation, grids, storage and control systems work together.

Storage is becoming infrastructure

Battery storage is moving to the centre of this new market phase. Modern battery energy storage systems do far more than store electricity – they stabilise grid frequency, reduce peak loads and help integrate renewable generation more effectively. Germany’s system infrastructure segment – large-scale BESS – grew 72% year on year in 2025 and is expected to rise further.

New business models are emerging around flexibility markets, hybrid projects and digital asset management. The question is no longer how much capacity can be built, but how intelligently it can be operated.

What this means for investors

Investors are adjusting accordingly. Grid connection, flexibility and long-term system compatibility are becoming as important as energy yield. Projects that can respond to market signals, shift load and participate in ancillary services carry a fundamentally different risk profile to those that cannot.

Germany’s proposed EEG reform – due to come into force on 1 January 2027 – reflects this shift. The introduction of mandatory two-sided Contracts for Difference across all technologies above 100 kW would change how revenue risk is shared between developers and the state, and will reward projects designed for long-term market participation rather than simple generation.

For asset owners and investors navigating this shift, the practical question is not whether to integrate storage and flexibility – it is how quickly. RES manages 45GW of renewable assets across 24 markets, including a growing portfolio of hybrid solar and BESS projects. That scale of operational experience is what turns market signals into actionable decisions.