Germany: Parliament promotes geothermal and limits permitting privileges for heat and battery storage projects

What do I need to know?

Geothermal energy projects

The adopted version of the GeoBG as well as the geothermal energy related changes to other acts essentially reflect the legislative proposal of the German Federal Cabinet of 6 August 2025 (cf. our summary: Germany: Federal government presents draft bill to accelerate the transition to climate-neutral heat supply | Eversheds Sutherland).

The following deviation from the original proposal is noteworthy: projects for the exploration, development, or utilization of geothermal energy are now explicitly included in section 35 para. 1 no. 5 of the Federal Building Code (Baugesetzbuch – “BauGB”), aligning them with wind and hydropower projects. This amendment clarifies that geothermal projects are generally privileged in outer areas, i.e. may be granted a permit without having to be covered by a development plan set up by the competent municipalities. This enhances legal certainty and simplifies site selection for developers.

Underground heat storage projects

Conversely, the privileged permitting in outer areas for underground heat and hydrogen storage, which has just been introduced into section 35 para. 1 no. 10 BauGB by an amendment act of 13 November 2025 (cf. our summary: Germany: Parliament adopts act to facilitate energy storage expansion | Eversheds Sutherland), will be replaced by a privilege just for underground heat storage projects that are spatially and functionally linked to heat sources and heat sinks.

Pursuant to the explanatory memorandum, this amendment is intended to illustrate that heat storage systems must always be connected to a heat network in order to operate sensibly and economically. The heating network must also include heat sources such as existing solar thermal or geothermal systems, sewage treatment plants or facilities that generate waste heat (e.g. data centres), as well as heat sinks that require additional heat, such as residential or commercial buildings.

Battery storage projects

Similarly, the provisions on privileged permitting for large-scale battery storage projects, which have also just been introduced in section 35 para. 1 BauGB by the amendment act of 13 November 2025, will be replaced by the following, limited privileges in section 35 para. 1 no. 11 and 12 BauGB. Projects may be granted a permit in the outer area if:

• [no. 11] the project serves to store electrical energy in a battery storage facility and is spatially and functionally linked to an existing renewable energy plant, or
• [no. 12] the project serves to store electrical energy in a battery storage facility not covered by the previous item, subject to the following conditions:
  • the project is located at a distance of no more than 200 meters from the property boundary of a substation converting extra-high voltage to high voltage or high voltage to medium voltage, or from the property boundary of a power plant with a rated output of 50 MW or more that is in operation or has been decommissioned and
  • the battery storage system has a nominal output of at least 4 MW and
  • the total area used by all battery storage facilities approved under this item, including associated ancillary facilities and open spaces, in the same municipality does not exceed 0.5 per cent of the municipal area and amounts to a maximum of 50,000 m².

Whilst the broad privilege for battery storage projects introduced by the act of 13 November 2025 was a major simplification of the permitting procedures for most projects, the new, more limited privileges can be considered as a step back but still beneficial for at least some projects: Colocation of battery storage with a renewable energy plant will generally fall under no. 11. On the other hand, stand-alone battery storage projects will typically comply with the at least 4 MW nominal output criterion but might struggle with the vicinity requirement; sites secured by developers are often more than 200 meters away from substations and power plants. In addition, the limitation of areas for battery storage systems per municipality may result in hurdles for certain battery storage projects, even if, in the area concerned, higher battery storage capacities would be beneficial for the power system. In any event, for facilities that do not fall under section 35 para. 1 no. 11 or 12 BauGB, the development plan procedure can be expected to remain the most reliable and practicable route.

What should I do next?

The legislative process has been completed sincethe Act passed the Second Chamber of Parliament (Bundesrat) on 19 December 2025. It will enter into force after its publication in the Federal Law Gazette (Bundesgesetzblatt). 

If battery storage projects do not fulfil the new, more detailed requirements, developers should take into account that the project will be subject to a development plan, which must be prepared and enacted, and which may at least delay, in some cases even put in question that project.