The increased penetration of renewable energy generation is driving the need for more flexibility both on the supply and demand sides to cope, especially with their intermittency and low schedulability.
For this reason, the Council of European Energy Regulators (CEER) has begun looking at the different regulatory arrangements around electricity storage applications across member states, in the context of their possible function as flexibility tools. The first part of the study has been focused on an overview of the European storage market.
Energy storage overview
When assessing the different storage technologies in operation in Europe at the end of 2012 and the expected increase in storage in the next 5 years, hydro-pumping storage is, currently, the predominantly used technology. Furthermore, this is not expected to change significantly in the coming years in terms of power and energy capacity. Other technologies will still be utilised (e.g. flywheels, compressed air electricity storage and electrochemical storage) but even if they increase in number, they will constitute less than 3% of power installation and the increase in energy capacity will be negligible. For example, electrochemical storage will increase by up to 100MW with new demonstration projects, while hydro-pump represents about 37GW in storage capacity in the countries covered by the analysis.
However, what could change this picture is the presence of breakthrough technologies or a strong decrease of cost of electrochemical storage, thanks also to the development of other sectors that may improve weight, size and performance of batteries as well as their costs (mainly batteries for electric vehicles and for ICT mobile devices).
Energy storage ownership
In the majority of cases, storage is owned by generators, although network operators can to some extent own storage facilities in some member states.
In the majority of countries, storage can provide services to network operators and generators. The main users of storage are the facility owners themselves.
Legal framework for energy storage
The legal framework for governing storage is identified at European level in the 3rd Package Electricity Directive but there are, at national level, other laws under development that will regulate electricity storage application.
Where it is regulated, the regulation is done within the services market. In some cases (demonstration projects for electrochemical storage technology application), storage systems are regulated as infrastructure, but regulators set disclosure obligations on network operators in order to disseminate knowledge among market players on this new technology.
Energy storage drivers for the next five years
Although there may be different reasons for the development of electricity storage in different European member states (according to national situations e.g. level of installed renewable energy sources and generation portfolio), two main drivers have been identified:
● Renewable energy penetration, in order to stabilise the grid and avoid congestions
● Time shift, for the most part to maximise generators’ profits from price arbitrage across time, or to reduce electricity costs on the end-use side or peak shaving.
A 2013 study from the European Electricity Grid Initiative and Grid+ identified almost 400 storage projects in 14 EU member states. [Engerati-Energy Storage in Europe To Move Beyond Research]