Germany | BESS may be entering a new era of bankable revenues

Germany’s battery storage market is moving beyond pure merchant revenues.

A new grid service is emerging as a potentially significant source of long-term income for BESS: inertia services.

Since the beginning of 2026, Germany’s transmission system operators have started procuring the new non-frequency ancillary service known as Momentanreserve.

BESS equipped with grid-forming inverter capabilities can potentially provide this service, helping maintain system frequency stability as conventional thermal generation is gradually phased out.

🔋 Why does this matter for BESS investors?

According to Aurora Energy Research, inertia contracts can have terms of up to 10 years.

For large-scale BESS projects, this could provide something the market has been looking for:

Long-term contracted revenue without direct merchant exposure.

Aurora estimates that the additional revenue stream could potentially increase BESS project IRRs in Germany by around 1–2 percentage points, depending on the project structure.

Even more importantly, inertia revenues can potentially be stacked with other BESS applications, including energy arbitrage and ancillary services.

This creates a new revenue stack:

Energy Arbitrage → Ancillary Services → Inertia → Long-term Contracted Revenue

However, the market is not fully there yet.

Germany is still waiting for the first grid-forming inverters to complete the required prequalification. As a result, no BESS asset is currently providing inertia services through the Momentanreserve scheme.

The broader direction, however, is significant.

For Europe’s BESS market, the key question is increasingly shifting from:

“How much revenue can a battery generate?”

to:

“How much of that revenue can be made predictable, contract-backed and financeable?”

As BESS deployment accelerates across Europe, revenue stacking + bankability could become just as important as battery technology itself.