Tauber Energy has recently launched a process to seek a strategic partner to support the delivery of 117 MW of German battery storage projects, managing partner Arne Weinig told NPM in a recent interview.

The developer also hopes that a potential partner would co-invest to support the growth of the platform, including through project acquisitions.

Tauber Energy anticipates a close on an agreement in H2 2025.

Partnerships form a major part of Tauber Energy’s strategy, expected to both support the developer’s capital requirements, but also make the relatively new business – which was founded as part of Tauber Energy Solar Group in 2024 – more agile within the BESS market.

Weinig said: “Two years ago, we decided that it’s better for us to form partnerships with project developers rather than to do everything by ourselves…Obviously, if you develop everything in-house, the margin is the highest, but we thought speed [was] of the essence in this market which changes fast, and hence we are great fan of partnerships.”

The 117 MW portfolio for which Tauber Energy is currently seeking a partner comprises projects primarily based across central, eastern, and northeastern Germany. Detailed engineering design has not yet been finalised, and according to Weinig the developer has retained flexibility to build systems of between two and four hours in duration.

Construction of the first project in the portfolio is set to begin in late 2025, with additional projects following in a staggered sequence through to H2 2026.

“We’re going to execute them over the next circa 12 months,” said Weinig. “We aim to bring them to CoD sometime in 2026, at the latest by the beginning of 2027.”

He did not offer specific detail on capex expectations, but said that turnkey costs for German BESS are currently in the area of EUR 180 to EUR 240 per kWh, for a two-hour battery.

“There’s large deviation around it,” said Weinig. “It very much depends on the location of the project…because there’s a lot of building permit questions, we have to look into our construction constraint and connection costs.”

Weinig further discussed that connection costs in particular are about to become a bigger hurdle for developers. He noted that currently grid connection in Germany typically costs approximately EUR 50 to EUR 100 per kW in building cost subsidies (Baukostenzuschuss or BKZ), depending on region and grid level.

“Grid operators [will soon] grant you access to the grid only with substantial capital commitments upfront, which in the past was not the case, and we think there will be a change in the market that will require more capital,” he said. “Hence we are in discussions with co-investors, investors, for ways to increase our fire power.”

Tauber Energy expects Germany’s Federal Network Agency (Bundesnetzagentur or BNetzA) to institute the change in the coming weeks, or months, which will mean developers will have to pay for their connections or be kicked out of the queue.

“If you only hold paper and you don’t construct or invest then your paper will soon be worth nothing,” Weinig said.

Another important grid related aspect for Tauber Energy to consider is that Germany does not currently have clear price signals based on project locations.

Weinig said: “We are currently trying to diversify across Germany. We believe there will be regions where we stand to benefit and others where we may face disadvantages, though it is not yet entirely clear whether the greater opportunities lie in the north or the south.

“But our opinion is there will be a differentiation, similar in other markets, where it will very much depend on where you have your battery project. At the moment we try to mitigate that with a diversified approach.

“We do have a few preferred locations internally, based on our current market view, but at the moment it’s too early to share.”

Weinig also discussed plans to split the grid into different zones, and potential incentives that could offer further benefits to projects in particular locations.

Wider portfolio and future plans

In parallel to its 117 MW BESS portfolio, Tauber Energy is also approaching ready-to-build with several other similar portfolios.

“We don’t want to be specific, but we are likely [to have] a couple of hundred megawatts reaching RtB over the next 12 to 24 months,” Weinig said.

The majority of Tauber Energy’s battery development projects are intended to be two-hour duration, however there is flexibility to deliver up to four hours in each case. He also noted that while Tauber Energy is focussed on BESS, its pipeline does include some solar projects.

The portfolio has mostly been built up through acquisitions. This is typically throughout various stages of development, however Weinig said that Tauber Energy may also consider acquisition of later stage projects, such as after construction start.

He added: “We can as well imagine to buy acquire projects that are up and running, but at the moment that wouldn’t be our sweet spot because we have enough projects in our pipeline that we can execute by ourselves. And obviously a running project may have a lower return rather than one that we built by ourselves.”

One route for Tauber Energy’s acquisitions is via framework agreements it has with several developers, that allow it to acquire the rights to early- and late-stage projects.

Describing these agreements, Weinig said: “We are, for example, paying a retainer and have the chance to be early-stage involved, take some more risk obviously, and finish the projects to fully developed/ready-to-build stage together with these developers …Usually, we won’t do that with everyone; we have established agreements for early-stage projects only with developers whose processes we know and trust and have had proven positive experiences with in the context of ready-to-build projects.”

Tauber Energy’s first operational project, however, was initiated by its former development entity Joulibra Storage, in 2022. It received final approval and grid access secured in 2024, before construction started later in 2024.

Construction was supported by local bank DKB, which provided non-recourse project financing.

The project is fully merchant, of which Wenig said: “Obviously, the leverage [on] a fully merchant project is lower compared to a scenario where a tolling agreement or a floor is in place. Nevertheless we have received non-recourse financing with leverage beyond circa 50% of the project value.”

He offered no further detail on the financing.

Coming online in late February 2025, the BESS asset is fully merchant, with Weinig highlighting potential annual revenue of around EUR 150,000 / MW to EUR 250,000 / MW in Germany.

“It depends a bit on what you want to do, [but] in terms of fully merchant that’s probably a fair range,” said Weinig. “It also depends on whether you’re implementing two-hour systems or longer ones.”

Weinig said that Tauber Energy currently sees merchant operations as the most beneficial revenue route, however the group is constantly assessing the benefits of a switch to tolling agreements.

He added: “If we would run everything by [ourselves], we would favour merchant, with a view to switch to a tolling [agreement] in part or later in full – depending on market developments.”

However, Tauber Energy is not currently considering tolling agreements because it believes this would sacrifice too much of the upside that the merchant market currently offers.

While some of Tauber Energy’s competitors have been signing such deals and Weinig expects more in the coming years, depending on market price levels and risk appetite of respective investors. But while he sees tolling become a more established tool in the near future, he expects it will be longer still before the terms they can achieve would be sufficiently favourable from Tauber Energy’s perspective.

*This story was originally published exclusively for NPM Europe subscribers.