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ENERGY STORAGE: A KEY TO SECURITY OF SUPPLY AND PRICE STABILITY

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flexibility

01 June 2021

As sustainable energies grow, it becomes imperative to develop efficient energy storage systems.

With the growing global concern over the climate crisis and considering that electricity generation is a major contributor to climate change, a fundamental paradigm shift has occurred as to how the current energy systems will transition towards zero emissions electricity production and a carbon neutral economy.

As the world approaches 100% clean electricity, a significant share of the energy mix will come from intermittent renewable sources, like wind and solar, which do not generate electricity 24 hours a day. To get all the benefits of these cheap, reliable renewable energy sources without emitting greenhouse gases and overcoming the difficulties of their daily and seasonal variable nature, several technologies will have to be developed and tested much faster than we had predicted.

To ensure the electric system stability and cost efficiency, the decarbonization of the electricity market and the electricity grid will need to rely on market competitive technological breakthroughs, like storage of electricity and flexibility solutions applied both to centralized generation plants and self-consumption facilities.

 

EUROPEAN ENERGY SYSTEMS AND MARKETS

The EU has been a fundamental player in reaching the Paris climate agreement. According to a study by Artelys, entitled "The role and need of flexibility in 2030: focus on energy storage", "the 2030 Framework for climate and energy sets as EU-wide targets for 2030 a 40% cut in greenhouse gas emissions compared to 1990 level, and at least a 27% share of renewable energy consumption. For the power system, this means a share of at least 45% of electricity demand generated from renewable sources (European Commission)", compared to 27.5% in 2014 (Eurostat).

In this context, integrating increasing quantities of electricity from renewable energy sources into the electric power system will bring new challenges in terms of the technology used to guarantee the security of supply and price volatility, threatened by weather conditions inducing "high fluctuations of residual demand and consequent needs for thermal generation: important capacity back-up is required to face periods of low Renewable Energy Sources (RES) generation while the high fluctuations in the use of these thermal units imply additional fuel and start-up costs."

Under the assumption that the more renewable energy is used, the more flexible the overall system needs to be, demand response and energy storage solutions can play an important role in integrating the energy system with high shares of variable energy and smoothing residual demand.

As reported by Dena, electricity storage units combined with solar and wind energy installations, will play a key role in the integration of renewables power sources into the market and make a significant contribution to the security of supply, allowing for excess electricity to be stored in large quantities over different time periods and fluctuations in supply and demand to be stabilized.

According to a new study published by the European Commission, innovative storage technologies will ensure the integration of renewable energy sources into the grid in the EU at the lowest cost. This will help the EU to reach its 2050 decarbonisation objectives under the European Green Deal while certifying Europe’s security of energy supply.

Funded by the Commission, this independent study, entitled “Energy Storage Study - Contribution to the security of electricity supply in Europe”, analyses the different flexibility energy storage options that will be needed to reap the full potential of the large share of variable energy sources in the power system. It provides a picture of the European energy storage environment, in terms of existing facilities and regulatory frameworks, best practices and barriers.

Amongst other findings, it shows how the main energy storage reservoir in the EU at the moment is pumped hydro storage. However, as prices fall, new battery technology projects are emerging - such as lithium-ion batteries and behind-the-meter storage. In addition, the research explores deployment potentials and actual needs for energy storage looking forward towards 2030 and 2050 - for example, there is a lot of work looking at batteries and electrolysers and how these key technologies can provide flexibility to the energy systems.

Having identified different barriers to the development of energy storage that exist at national and EU level, the study makes several recommendations to reduce these obstacles and accelerate deployment. For example, the need for standardisation on safety issues and EV interoperability, and issues of permitting, double grid tariffs and taxes, price signals and access to ancillary services markets. Similarly, it underlines the importance of reliable and regular data. To address these issues, it calls for a comprehensive update of the regulatory framework to speed up the market penetration of storage technologies.

As an energy storage UE report explains, “with electrification set to be one of the main pathways to decarbonisation, batteries as electricity storage devices will become one of the key enablers of a low-carbon economy. Given their capacity to integrate more renewables into our energy systems and their ability to green the industry and transport sectors, with spill over effects on the electrification on many additional sectors, global demand for batteries is expected to grow very rapidly over the coming years, making the market for batteries a very strategic one."


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