Co-Location: Battery Storage at Wind or Solar Park Sites
In brief: Co-location means installing a battery storage system directly at the site of a generation facility (wind farm or solar park), sharing the grid connection point (NAP — Netzverknüpfungspunkt). This model saves grid connection costs, avoids curtailment and opens additional revenue streams through revenue stacking. Since December 2025, co-location is privileged under building law (Section 35(1) No. 11 BauGB) — a significant site advantage over standalone storage.
What Is Co-Location?
In a co-location setup, a generation facility (wind or PV) and a battery storage system share the same grid connection point (NAP). Both systems are connected to the distribution or transmission grid via a shared medium-voltage or high-voltage link. The storage system can both absorb electricity from the RE facility and operate independently on the electricity market.
The Federal Network Agency (BNetzA) defines co-location functionally: the decisive factor is the shared grid connection point, not physical proximity alone (source: BNetzA, Storage topic page, 2024). Under the EEG 2023/2024, the plant definition is set out in Section 3 No. 1; Section 19 EEG governs the allocation of storage at a shared NAP.
Advantages of Co-Location
1. Shared Grid Connection — Substantial Cost Savings
The grid connection is one of the largest single cost items in storage projects. A dedicated grid connection point costs typically EUR 500,000 to 2 million depending on the voltage level and distance to the nearest substation (source: Fraunhofer ISE, Levelised Cost of Energy, 2024; BVES, Industry figures 2024). With co-location, this cost is largely eliminated since existing infrastructure is shared.
2. Curtailment Avoidance (Feed-in Management)
Wind farms and solar parks are curtailed by the grid operator during grid congestion. In 2023, approximately 6.1 TWh were lost to feed-in management in Germany (source: BNetzA, Monitoring Report 2024). A co-located storage system can store this otherwise lost energy and feed it in at a later time.
3. Multi-Use and Revenue Stacking
Co-located storage systems can use multiple revenue sources simultaneously or sequentially:
- Arbitrage: purchase during negative prices / overproduction, sell during high-price periods.
- Balancing energy: Frequency Containment Reserve (FCR) and automatic Frequency Restoration Reserve (aFRR) — prequalification is possible as a co-location unit (source: regelleistung.net, 2024).
- Curtailment avoidance: direct storage instead of compensation payment (Section 13a EnWG).
- Self-consumption optimisation: particularly with PV co-location, the operator's self-consumption share can be increased.
4. Building Law Privilege
Since the legislative resolution of 04.12.2025, battery storage in co-location is privileged under Section 35(1) No. 11 BauGB in unzoned areas — with no minimum size, provided a spatial-functional connection with the RE facility exists. This considerably shortens the permitting timeline compared to a local development plan procedure. Details at BESS Permitting.
Legal Framework
| Regulation | Relevance for Co-Location |
|---|---|
| EEG 2023/2024 Section 3 No. 1 | Plant definition — defines generation facility and storage as separate plants, even at the same NAP |
| EEG 2023/2024 Section 19 | Allocation and remuneration for shared use of a NAP; metering and allocation obligations |
| Section 35(1) No. 11 BauGB (12/2025) | Building law privilege for co-location in unzoned areas |
| BNetzA determination on storage | Metering and billing rules for storage at shared grid connection points |
| EnWG Section 13a | Feed-in management — legal basis for curtailment avoidance via storage |
Sources: EEG 2023 (gesetze-im-internet.de), CMS, 12/2025.
Technical Aspects
- Grid connection: typically via shared MV switchgear (10–30 kV) or HV connection (110 kV) for large-scale projects. The storage system connects behind the existing transfer meter.
- Feed-in management: the grid operator issues curtailment signals to the combined facility. The storage system can absorb curtailed power instead of wasting it — this requires a suitable park control system.
- Power flow direction: at the NAP, power can flow bidirectionally (feed-in from RE, feed-in/draw from storage). The metering concept must cover all directions (four-quadrant metering).
- Grid compatibility: a grid compatibility assessment (NVP) per VDE-AR-N 4110/4120 is required before connection. If the combined capacity exceeds the existing connection capacity, grid reinforcement may be necessary.
Co-Location vs. Standalone Storage
| Criterion | Co-Location | Standalone |
|---|---|---|
| Grid connection costs | Low (shared existing infrastructure) | High (dedicated NAP, EUR 500k–2 M) |
| Building law privilege | Yes, Section 35(1) No. 11 BauGB (no minimum size) | Only from 4 MW + 200 m radius (Section 35(1) No. 12 BauGB) |
| Typical permitting timeline | 6–12 months | 12–24 months (without privilege: local development plan required) |
| Curtailment avoidance | Direct access to curtailed energy | Only via market mechanism (arbitrage) |
| Site flexibility | Tied to RE facility site | Freely choosable (grid-optimal sites possible) |
| Self-consumption optimisation | Yes, especially with PV combination | No (no local generator) |
| Revenue model | Multi-use (arbitrage + FCR/aFRR + curtailment avoidance) | Primarily market revenues (arbitrage + balancing energy) |
Economics
The economic viability of co-location depends on several factors:
- Capex savings NAP: EUR 500k–2 M (indicative, depending on voltage level and cable route length; source: Fraunhofer ISE, 2024).
- Avoided curtailment: for a 50 MW wind farm with a 3 % curtailment rate and an electricity price of EUR 70/MWh, this yields approximately EUR 300,000/year in potential additional revenue.
- Revenue stacking: according to pv magazine (2024), optimised multi-use storage in Germany achieves market revenues of 120–180 EUR/kWh/year (arbitrage + FCR + aFRR combined).
- Shorter payback period: the combination of lower capex and higher revenues typically shortens the payback period by 1–3 years compared to standalone projects.
Frequently Asked Questions (FAQ)
What does co-location mean for battery storage?
Co-location refers to the spatial combination of a battery storage system with a generation facility (wind farm or solar park) at the same grid connection point. Both systems share the grid connection, reducing costs and increasing flexibility.
How much does co-location save on grid connection costs?
Sharing the NAP can typically save EUR 500,000 to 2 million in investment costs depending on the voltage level and distance to the substation (source: Fraunhofer ISE, 2024; BVES, 2024). Additional savings accrue from shared planning, permitting and ongoing grid fees.
Is co-location privileged under building law?
Yes. Since the legislative resolution of 04.12.2025, battery storage in co-location is privileged under Section 35(1) No. 11 BauGB in unzoned areas, provided a spatial-functional connection with an RE facility exists. There is no minimum size requirement. Details at BESS Permitting.
Can a co-located storage system participate in the balancing energy market?
Yes. Co-located storage systems can also provide balancing energy (FCR, aFRR) provided they meet the prequalification requirements of the transmission system operators. The shared NAP is not an obstacle as long as metering and control technology allows unambiguous attribution of power flows (source: regelleistung.net, 2024).
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