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Collaboration and the European storage opportunity

The energy industry has known about the potential for storage for years. Only now is the potential of storage being realised, but industry collaboration is needed to build a brighter future for batteries. The key to the future of sustainable energy is storage. But despite the massive potential of batteries, numerous barriers stand in the way.

Benjamin Franklin first used the word ‘battery’ in the electrical context in 1748. He was comparing multiple linked Leyden jars (a precursor to the modern cell) to a battery of cannon, all firing together.

The description was better than he could have guessed. The idea of individual units operating in unison to achieve something great, the notion of military precision, without which the system falls apart – you couldn’t ask for a better description of the role storage is about to play as part of Europe’s finely-tuned power grids.

Central to this metaphor – and to storage fulfilling its potential – is collaboration. To cross the line from the old energy world to the storage-enabled new, there needs to be far greater understanding and cooperation between stakeholders.

Pent-up energy

The cost of batteries has declined by 70 per cent in the last five years, and Bloomberg New Energy Finance expects a 75 per cent fall in cost for commercial and residential storage systems by 2040. This has shifted the storage conversation from theory to practice.

And the opportunity is huge. The EU is targeting 27 per cent renewable energy generation by 2030, which will mean a lot more intermittency and balancing challenges for grids. The move to the Energy Union and the resulting increase in interconnection will help, but storage will be vital. Effective storage allows excess energy to be stored, and discharged later. For generators, this is great, as no energy is wasted, and they can provide a more reliable energy source, increasing their value. For the grid, it means more clean energy but also smooths intermittency. Italian grid operator Terna, for example, has deployed 40.9 megawatts (MW) of battery storage since 2013 for grid stability.

The industry has heard about the potential for storage for years, but we are now on the brink.

Nigel Blackaby, director, POWER-GEN Europe and Renewable Energy World Europe

Conventional power producers are also looking to the future, and many are concluding that hybrid power plants will play a big role. This might, for example, include gas, solar and a battery. This allows the operator to provide a reliable supply but draw on the most efficient source at any given time based on market and operating conditions. Similar thinking is also driving the development of virtual power plants (VPPs), which use smart systems to create a similar effect from distributed generation and storage sources.

Then there’s the transmission grid itself. Grid storage systems can provide ancillary support such as frequency and voltage control, provide system inertia and allow grid restoration and congestion management. In the UK, the National Grid recently awarded contracts for 201 MW of enhanced frequency response where the winning contracts were all storage.

In short, there aren’t many areas of the energy system which don’t stand to gain from cost-effective, efficient storage systems – and that’s without even touching on the commercial and residential scale applications.

For now, costs still hover just above the prohibitive level for most stakeholders. But as storage prices fall and renewables proliferate, that will soon change. The potential is there for a virtuous circle where lower costs open up new applications, creating more demand in turn.

Collaboration at the core

However, despite early success, there are still obstacles to storage fulfilling its potential. Across Europe, storage systems lack a regulatory classification of their own. This means that they might be charged once for drawing power from the grid, then charged again when discharging it – taking on the costs related to both supply and consumption.

There is certainly regulator appetite to fix this, but it has proven difficult to even develop a definition of storage that pleases everyone – though the European Commission is being lobbied to include one in the upcoming Energy Market Design. Questions remain as to what storage is, who’s responsible for transmission and distribution and who is allowed to own what, as well as the extent of subsidy and R&D support available.

New industry associations will help coordinate efforts with regulators, but that’s a small subset of the huge number of stakeholders that need to have their say.

Because energy storage touches on so many different areas, the list of voices that will need to have their say is lengthy. Storage is almost a victim of its own potential.

Calling for collaboration

As Franklin’s metaphor highlighted – batteries (and storage more broadly) are about collaboration. The industry has heard about the potential for storage for years, but we are now on the brink. A concerted push by a connected industry is what will tip us over the edge and realise that future and the benefits it brings.

To that end, POWER-GEN Europe and Renewable Energy World are putting storage at the centre of the 2017 agenda. The event will bring together diverse industry stakeholders to discuss how to progress storage and take this golden opportunity to change the energy world.

POWER-GEN Europe and Renewable Energy World will be held in Cologne, Germany from 27 to 29 June 2017. Click here to find out more and register for the event.

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