Greenconexa | April 2026
There is one image that captures the current state of Europe’s energy transition well: in Germany, during May 2025, electricity prices fell below zero for 573 hours. Producers paid for others to take their power. Meanwhile, the average monthly bill for a German household stood at โฌ115.60.
Energy was, technically speaking, free โ or rather, subsidized. And yet the consumer was paying more than ever.
This is not an anomaly. It is the most visible symptom of a structural problem the EU knows, officially acknowledges, and addresses at a pace that cannot keep up with field reality.
1. What Happened in 2025?
For the first time in history, solar and wind produced more electricity in the EU than fossil fuels โ 30% versus 29%. This is a genuine milestone, rightly celebrated. But beneath this figure lies a more complex reality.
72 TWh โ equivalent to Austria’s annual consumption renewable energy curtailed (cut) in 2024
~โฌ7.2 billion EU grid congestion management costs (2024)
>1,000 GW across Europe renewable projects stuck in grid connection queues
573 hours โ +25% vs. 2024 negative price hours Germany (2025)
doubled vs. 2024 โ first occurrence was 2024 negative price hours Spain (2025)
~โฌ1.2 trillion (Aurora Energy Research estimate) grid investment needed by 2040
The translation of these figures into concrete terms: Europe has built generation capacity, but has not built the capacity to intelligently transport, store, and distribute the energy generated. The grid, largely designed for a world of large centralized plants and predictable demand, was not conceived for a world with hundreds of thousands of decentralized and intermittent sources.
2. The German Paradox and the Spanish Lesson
Germany is the most instructive case. Renewables cover 59% of electricity production. Onshore wind alone is the country’s largest single energy source โ 25.9% in 2024. And yet German consumers pay among the highest prices in Europe: ~40 cents/kWh in 2024.
The reason is not the energy itself โ that is cheap, sometimes negative. The reason is system costs: grid congestion, redispatch (paying power plants to produce more or less than they otherwise would), and the absence of storage that forces system operators to balance with gas.
“3.5% of Germany’s renewable electricity could not reach consumers in 2024. Grid congestion management costs reached โฌ2.9 billion that year.” โ Prism News, citing Aurora / ENTSO-E data, 2026
Spain offers a different lesson. It added 40 GW of renewable capacity between 2019 and 2025 โ more than any other EU country except Germany. But market design and grid geography allowed solar and wind to effectively displace gas from its price-setting role. The result: gas set the electricity price in only 15% of hours in the early months of 2026, compared to the majority of hours in most other European countries.
3. The BESS Problem: Technology Exists, Framework Does Not
The solution is largely known: battery energy storage (BESS) can absorb midday surplus and release it in the evening, eliminating the need to curtail renewable output and reducing dependence on gas for balancing.
The figures support this logic clearly:
49.1 GWh total capacity BESS installed EU (2024)
~74.8 GWh (+40% year-on-year) BESS installed EU (2025 estimate)
780 GWh โ to support a renewables-based system BESS needed EU by 2030
~380 GWh โ nearly half the requirement missing projected deficit vs. requirement (2030)
If Germany’s announced battery projects (equivalent to 10.5 GW / 26.3 GWh) had already been operational in 2025, they would have avoided one third of recorded curtailment, saving approximately โฌ800 million in redispatch costs and gas purchases.
But BESS faces its own paradox: it is becoming a victim of its own success. Demand has exploded. And with it โ grid connection queues, permitting bureaucracy, and the absence of specific regulatory frameworks for storage in numerous member states.
“Storage is, to some extent, becoming a victim of its own success. We’re seeing delays in grid connections and permitting processes. Bureaucracy remains a bottleneck, and in many countries, regulatory frameworks aren’t yet tailored to storage.” โ EASE โ European Association for Storage of Energy, 2025
The revised Electricity Market Design Directive (2024) explicitly recognized the role of storage as essential infrastructure. But legal recognition and concrete national implementation are two different things. Transposition remains slow and uneven across member states.
4. What the Renewables Directive Did Not Resolve
RED III (revised 2023) raised the EU’s 2030 target to at least 42.5% renewables. It established that permitting for renewable projects must not exceed 2 years.
Field reality: in 18 countries analyzed for onshore wind, the average permitting duration exceeded 2 years in every case โ in some by up to 5 times.
Solar installations in the EU declined for the first time after a decade of continuous growth: 65 GW in 2025. Projections indicate continued decline in 2026 and 2027. The reasons are multiple:
โ prosumer support programs have been withdrawn in many key markets
โ negative prices erode the bankability of utility-scale projects
โ grid congestion blocks grid connection in high-potential areas
โ ~25% of member states risk failing their own national solar capacity targets by 2030
5. What Remains Unaddressed
Who bears the cost of grid infrastructure?
The current model transfers congestion and redispatch costs to the end consumer through network tariffs. There is no clear European mechanism equitably allocating the cost of grid expansion between renewable energy producers, system operators, and consumers.
Regulatory framework for standalone BESS
In numerous member states, a standalone battery โ not coupled with a solar panel or wind turbine โ has no clear legal status. It is not a producer, not a consumer, not a grid asset. Market rules were written for a world with these three distinct categories. BESS fits none of them neatly.
Negative prices and their effect on municipalities
A municipality that has invested in a solar park and holds a PPA (long-term fixed-price contract) may discover that during peak solar hours โ weekends, sunny spring days โ the spot price is negative, and its CfD or PPA contract does not fully protect it. This is a real risk, insufficiently discussed in local-level planning.
Absence of local flexibility markets
Flexibility demand โ the capacity to consume or produce on command โ is concentrated at TSO level (transmission system operators). Municipalities and small producers have no simple access to these markets. A mayor installing a community-level BESS cannot easily offer flexibility services to the national grid, even if technically capable.
Europe’s energy transition does not suffer from a lack of political ambition or insufficient technology. It suffers from a structural fracture between what is being built and what the system can absorb, transport, and monetize.
This is not an unsolvable problem. But it is a problem that deserves to be named correctly before it can be solved.
Sources
Ember โ European Electricity Review 2026 https://ember-energy.org/latest-insights/european-electricity-review-2026/
SolarPower Europe โ EU Market Outlook 2025 (Solar installations decline) https://www.mercomindia.com/eu-solar-installations-fall-to-65-gw-in-2025-ending-a-decade-of-yearly-growth
Aurora Energy Research โ European Renewables Market Overview 2026 https://www.saurenergy.com/solar-energy-news/europe-curtails-over-10-twh-of-power-in-2024-1000-gw-renewables-stuck-in-grid-queues-10984193
Bloomberg โ Europe Saw Record Surge in Negative Power Prices in 2025 https://www.bloomberg.com/news/articles/2026-01-05/europe-saw-record-surge-in-negative-power-prices-in-2025
Ember โ Early Signs of the Impact of Batteries (2026) https://ember-energy.org/latest-insights/european-electricity-review-2026/early-signs-of-the-impact-of-batteries/
EASE โ How Energy Storage is Redefining Europe’s Power Ecosystem https://www.innovationnewsnetwork.com/how-energy-storage-redefines-europes-power-ecosystem/59443/
Wรคrtsilรค โ 2026 Energy Storage Outlook and Opportunities https://www.wartsila.com/insights/article/2026-energy-storage-outlook-and-opportunities
Prism News โ Why Cheap Renewables Haven’t Lowered Energy Bills for Europeans https://www.prismnews.com/news/why-cheap-renewables-havent-lowered-energy-bills-for