Investment volumes in renewable energies in Germany are far ahead of the necessary infrastructure to integrate them into both the electricity market and the grid. For storages and other technologies offering flexibilities the current regulatory framework and the market design in Germany remain a barrier for upcoming investments. In this paper regulatory barriers for an economically efficient energy storage deployment are presented and evaluated using a generic optimization model for a multifunctional operation of storage technologies on electricity markets capable to consider different market and regulatory design changes. Due to the rising significance of grid restrictions for the integration of intermittent resources and upcoming new innovative storage technologies on distribution grid level, the electricity grid was integrated into the model. Such an approach enables a quantitative analysis of interaction between market operation and grid congestion. This is shown using a 110kV high-voltage grid in the North of Germany as a representative congested grid with ongoing curtailments due to high wind energy penetration. Storage technologies -and also other measures as demand-side and generation managementwill need a flexible market and a sophisticated regulatory design in order to significantly add value to the future energy system. Index Terms--Storageoptimization, Regulatory framework, Electricity market design for storage technologies, Electricity storage technologies, Renewable energy storage, Integrating electricity storage, Multifunctional storage optimization 1 Peak load in Germany is appr. 76.8 GW. 2 E.ON is one of world's largest suppliers of electricity and gas with 85,000 employees and 93 billion Euros of revenue in 2010.Evaluating regulatory and market frameworks for energy storage deployment in electricity grids with high renewable energy penetration T 1:6. Average reserve market prices from 2008 -2010 and spot market prices (EPEX spot) from 2009 were taken. Storage application Typical operator Day-ahead and intraday marketEnergy utility, trading company, independent storage operator (IStO) Reserve (balancing) marketsEnergy utility, trading company, IStO Avoidance or deferral of grid investmentGrid operator, (IStO as a service) Voltage stabilityGrid operator, (IStO as a service) Grid integration of renewablesGrid operator, IStO, Renewables plant operator Market integration of renewablesUtility, IStO, Renewables plant operator Island or micro grids Utility, grid operator, IStO

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