Philipp Man, Founder & CEO of terralayr, and Mikko Preuß, Vice President, share insights into the rapidly evolving German battery market. They discuss how batteries are becoming an important asset class, focusing on financing challenges and risk management. The conversation highlights the impact of grid connection fees on battery storage, advocating for regulatory changes. They also explore strategies for expanding into other markets while emphasizing the need for clear regulations and innovative financing solutions to support the energy transition.
The German battery market is thriving, with record installations indicating a strong demand for innovative energy storage solutions to support renewable energy transitions.
TerraLayer offers a unique virtual battery service that allows clients to access energy flexibility without the headaches of ownership and maintenance.
Deep dives
Booming German Battery Market
The German battery market has experienced significant growth in recent years and is projected to continue its upward trajectory. In the past two to three years, record levels of battery installations have occurred, with an even larger capacity planned for 2030. This booming market reflects a growing demand for energy storage solutions that are crucial for supporting the transition to renewable energy sources. Companies like TerraLayer are positioning themselves to capitalize on this momentum by providing innovative services that enhance the operational flexibility of battery assets.
TerraLayer's Unique Business Model
TerraLayer offers a fully integrated platform that provides energy flexibility services by aggregating and managing grid-scale batteries. Through their service, customers can access virtual batteries without the need to own or maintain physical assets, greatly simplifying the process for energy-intensive companies. The model allows clients, including large power producers and traders, to benefit from the capabilities of physical batteries while mitigating the financial and operational burdens of ownership. TerraLayer likens its business to AWS, providing on-demand virtual battery access that enables customized solutions for clients.
Challenges and Regulations in Battery Storage
The battery storage industry in Germany faces regulatory challenges that could impact its growth, such as the clarity of the capacity market framework. Stakeholders express concern that current regulatory proposals may inadvertently exclude batteries from beneficial market structures. In particular, the proposed inclusion of storage systems with a minimum duration of 72 hours does not align with the typical operational profiles of contemporary battery systems, which often have shorter durations. This lack of alignment could undermine the potential benefits offered by battery storage as a viable asset class in the evolving energy landscape.
Future Expansion and Market Opportunities
Although TerraLayer currently operates exclusively in Germany, the company is considering expanding its platform to other European battery markets toward the end of the year. Key factors influencing potential market entry include renewable energy share, regulatory environment, and the ability to provide tailored solutions that address specific market needs. The company aims to leverage its expertise in virtual tolling and flexibility services to offer valuable options in new markets. TerraLayer's strategic approach combines market density with an understanding of local needs, positioning it to navigate future growth effectively.
This week on Energy Unplugged, we're thrilled to welcome Philipp Man, Founder & CEO of terralayr, and Mikko Preuß, Vice President of the company. They join Eva Zimmerman, Senior Associate in our Berlin Research team, to discuss the German battery market.
As a company, terralayr is committed to overcoming the challenges of renewable energy with a mission to create a future powered entirely by renewables. Their goal is to ensure a reliable, sustainable power supply, no matter the fluctuations in demand or energy sources, by use of their cloud platform for clean energy flexibility.
Main topics of discussion include:
Approaching batteries as an asset class, with a focus on financing and risk mitigation