EC endorsed German capacity rules barring batteries from new power tenders
Brussels backed rules shutting batteries out of German capacity market bidding, locking in a gas role that Berlin is also reinforcing with a €1.5bn strategic reserve.
Germany's planned capacity market tenders will be skewed toward gas-fired plants after the European Commission endorsed rules that effectively bar batteries from bidding, the German economy ministry confirmed to Montel News on Thursday (2026-07-10). Internal documents suggest the provision applies to up to 5 GW of capacity.6
The Commission's approval, granted last year, lands at an awkward moment for Berlin. Germany is simultaneously moving to build a state-owned strategic gas reserve costing up to €1.5 billion ($1.7 billion), Reuters and OilPrice.com reported on Tuesday (2026-07-07). The reserve would hold volumes equivalent to nearly 10% of total German storage capacity, with purchases and injection planned for 2027 and 2028. Both the capacity rule and the reserve reflect the same calculation: gas remains structurally necessary for the foreseeable future.5
German gas storage stood at 42.88% on Sunday (2026-07-06), according to Gas Infrastructure Europe data. ICE Endex TTF front-month traded at €53.60 on Tuesday (2026-07-14), and German baseload front-month power was at €105.65. The economics of keeping gas plants in the dispatch stack are legible at those levels. But the capacity market design goes further than price signals — it decides who gets to bid at all.5
The battery exclusion has drawn criticism from clean energy investors. Industry figures told Montel earlier this year that structural preferences for gas in the capacity market shift investment risk onto renewable developers who depend on storage to firm up output. A gas plant that wins a capacity contract receives guaranteed revenue. A battery that cannot bid has no such anchor.2
Germany has concrete reasons to favour gas security. Russian pipeline supply, which accounted for 55% of imports at its peak under successive governments, has fallen to 26% of total supply, according to German government data. Replacing those volumes has required rapid LNG diversification: the share of LNG in total German gas supply rose to 12% in the first half of 2026, up from 10% a year earlier, even as the closed Strait of Hormuz disrupted Middle Eastern supply flows, the German energy regulator reported.3,5
Industrial demand has compressed in response. Gas consumption by German industry in the first two full weeks of the Iran war, covering 2026-03-02 to 2026-03-15, ran around 17% below pre-war levels according to the Bundesnetzagentur. Large manufacturers including Mercedes-Benz reported they had already cut gas use by 10% and could reach 50% reductions by year-end. Whether those cuts reflect durable efficiency investment or temporary price-driven curtailment, Berlin has not said publicly — and the distinction matters for how much new gas capacity the system actually requires.1,3
German energy economists have argued for a different path. In a briefing on Thursday (2026-06-25), four economists urged Berlin to avoid loosening domestic climate targets and instead push for a constructive reform of the EU Emissions Trading System — a route that would squeeze gas out of the merit order through carbon price rather than through structural preference. The capacity market design points in the opposite direction.4
The strategic reserve plan has a defined scope: €1.5 billion over two years, gas injected in 2027 and 2028. The capacity market commitment is less contained. If the battery exclusion holds through the first tender rounds, the dispatchable fleet that emerges will lock in gas burn for the better part of a generation of plant life. At that point the cost of a strategic reserve becomes a floor, not a ceiling, for what security of supply requires in Germany.5
The operative rule is the Commission's approval of the battery exclusion, and it stands until Berlin publishes tender specifications that either retain or revise it. Those documents will tell battery and storage investors what the market is actually worth entering.6