Tadgh Cullen, Statkraft, UK, investigates the current state of play for energy storage in Europe.
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020 may be looked back on as the year battery energy storage became truly viable in Europe and the UK. It was the year that saw many countries achieve a balance between the three fundamental requirements to make energy storage a success: increasing energy market volatility, effective single-buyer market design (explained next), and a growth in investor confidence. In the UK alone, 2020 was the year that surpassed a gigawatt of installed battery storage, with a further pipeline of 15 GW. Single-buyer markets are now either operational or in the consultation stages for many of the countries that are explored throughout this article. That means designing a market that incentivises investment into energy storage through short- to medium-term bankable contracts. This has, and will allow for, a quicker ramp-up in renewable energy penetration while minimising the need to curtail renewable generation due to market or technical reasons.
Ireland Ireland is in a unique position in Europe. It is an island with limited interconnections, has a 43% average renewable energy penetration, and is currently running a trial to increase the cap on the percentage of grid power being supplied by renewable sources to 75%. This is a significant challenge, and to manage this stability concern, Eirgrid – the National Transmission Network Operator – has designed a market that incentivises investment into energy storage by giving investors confidence that their investment in energy storage will make a guaranteed return in the first few years of operation. The market is designed to reward flexible and fastresponding assets that improve deviations in system frequency. This means that during periods of either too little or too much generation on the electricity grid, batteries will respond quickly to either consume or export energy to help rebalance the system. The fast frequency market is technology-neutral; however, its technical requirements mean that few technologies other than battery storage can partake. The new market ensures embedded flexibility in the electricity system while reducing the reliance on fossil fuel inertia-producing generators and allows for a continued increase in renewable energy penetration.
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