Battery storage deployment in Austria from distribution grid operators’ perspective focusing a new ELWG

Abstract

The Austrian electricity system needs storage to further increase its share of renewables, making battery storage a key enabler for balancing fluctuating generation. Integrating batteries into distribution grids raises technical, economic, and regulatory challenges for distribution system operators (DSOs) and battery investors. This thesis investigates how batteries can be integrated under current frameworks and explores the implications of the draft Elektrizitätswirtschaftsgesetz (ELWG) 2025.It uses a quantitative model to compare grid fees and profitability of battery operation across Austrian regions and grid levels and presents insights from expert interviews with DSOs and industry stakeholders. Findings show that grid fees and location heavily affect the economic viability of batteries: while large batteries at higher grid levels can achieve positive returns, small batteries at lower levels often remain unprofitable. The draft ELWG 2025 introduces incentives for system-serving battery operation and might (subject to the final decree design) reduce grid costs for battery operators by up to 14%. Interviews highlight that DSOs value batteries’ potential for flexibility but remain skeptical about regulatory barriers and the difficulties to align interests between market-driven actors and grid operators. They prefer conventional grid reinforcement unless battery deployment is supported by clear curtailment rights and rules for collaboration with third parties. Experts also emphasized that dynamic price signals alone cannot ensure grid-serving behavior and weighed in on the possible future merits and risks of flexibility markets. In conclusion, while ELWG 2025 is a first step toward aligning battery operation with system needs, substantial hurdles remain. Unlocking the potential of batteries will require even more clarity in regulation, and new market mechanisms to balance investor incentives with DSOs’ operational requirements. Without these, Austria risks delaying its energy transition goals.