Battery Storage Key to Greening Europe

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An energy-independent Europe, powered by low-cost, green energy sources, isn’t possible without a rapid and huge scale-up of battery-based electricity storage infrastructure — and the policy reforms needed to keep the cost of electricity low and to meet the EU’s net-zero goals.

If 2022 hasn’t caused a need to rethink our electricity grid, then I’m not sure what will. As I type, the UK swelters in record-breaking heat, forest fires are causing chaos across southern Europe, many countries struggle to envision their inevitable future independent from Russian natural gas, and we all are facing skyrocketing energy costs.

The REPowerEU Plan, published in May, is the solution posited by the European Commission — aiming to increase the security of energy supply by building and connecting more renewable generation to the power grid. This is not just an answer to the climate crisis, but also a way for the European nations to become more energy independent and self-sufficient.

However, for this plan to be successful, it takes more than just increasing the number of solar panels and wind farms. To build an electricity grid that can meet our growing energy demands without relying on carbon-emitting fossil fuels, Europe needs to ramp up the deployment of flexibility technologies such as battery-based electricity storage. This new infrastructure must be driven by stringent targets and holistic frameworks to ensure grid stability and resilience, and the involvement and commitment of private-sector and environmental, social and governance-minded investors.

Storage as Backbone of the Grid

Electricity storage systems offer a quickly deployed, cost-effective and low-emissions solution with the potential to become the backbone of a modern, resilient and decarbonized power grid. They enhance network stability and ease congestion on transmission lines, and, perhaps most importantly, provide storage for electricity when it’s abundant — electricity that can be used later, on still days or dark nights.

This not only ensures we have a more constant supply of green energy, but also reduces the significant costs and challenges around curtailing renewable energy when the levels of generation are higher than the demand. In turn, storage limits price volatility and the overall electricity cost in wholesale energy markets through energy arbitrage.

Net-zero emissions become a realistic goal only when we increase the deployment of electricity storage and other flexibility technologies — such as demand-side response — and maximize the benefits of pumped hydroelectric storage and the interconnectivity between national electricity markets.

This isn’t an unrealistic and idealistic solution. In several markets around the world, including Ireland and some US markets such as California, energy storage technologies are already proving their ability to replace conventional power plants as a more economical and low-carbon way of providing secure energy supply during periods of peak demand and low renewable generation.

Europe’s Multiplying Storage Needs

We already have access to electricity storage — ready-to-deploy and cost-effective technology. Even so, we continue to rely on high-emission natural gas-based generation. In 2021, capacity market auctions across Europe awarded approximately 2.4 gigawatts of contracts to storage, but various studies predict we’ll need around 200 GW of electricity storage by 2030, and as much as 600 GW by 2050.

Achieving this goal doesn’t just require physical infrastructure, but also sound, unified policy, and targets that are enshrined into law. A recently published open letter to the European policymakers, signed by Fluence and nine other organizations with decades-long experience in creating and supporting European energy markets, outlined some of the changes required to realize the REPowerEU Plan:

“The energy market should be designed in a way that provides clear price signals to generators and customers in line with the needs of the system at any moment in time. Energy prices should be low at times of high renewable generation, and higher during periods of low generation. Similarly, the cost of using the grid should be higher when it is congested, providing price signals to local generation and consumption that helps to lower the congestion on the grid.”

“The carbon intensity of peaking power plants needs to be addressed in capacity market design and through new policy measurements such as clean peaking standards. Grid connections for energy storage should be prioritized. The introduction of flexible connection agreements in congested areas can speed up integration of storage, which in turn can help reduce congestion based on market signals. Finally, existing barriers to storage in national markets, such as charging of fees, levies or taxes that are not cost-reflective and disadvantage storage technologies, or restrictions to market participation must be removed in line with existing European legislation.”

Energy storage is essential in bridging the gap between sustainable net-zero goals and Europe’s current ability to generate and store green electricity at any given time. Given that intermittency is the major flaw of renewable energy, electricity storage technology is intrinsically intertwined with global net-zero ambitions — and one should not be considered without the other.

Paul McCusker is Emea (Europe, Middle East and Africa) president of energy storage technology and services provider at Fluence. The views expressed in this article are those of the author.

Energy Storage, Renewable Electricity , Low-Carbon Policy, Gas Demand
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