According to a new Wood Mackenzie Power & Renewables’ research, Europe’s renewable energy deployment misses on an important aspect. It is no secret that the European power markets keep improving as time goes by. The rate at which it is […]
According to a new Wood Mackenzie Power & Renewables’ research, Europe’s renewable energy deployment misses on an important aspect. It is no secret that the European power markets keep improving as time goes by. The rate at which it is rising is higher than that of even China and the US. However, to integrate its capacity into the grid, experts feel that it is high time it recognized the importance of storing energy.
Rory McCarthy, Wood Mackenzie’s principal analyst, said that the US is way ahead of Europe as far as energy storage deployments are concerned. He cited various reasons why it is the case. One of them was the vertically-integrated utility companies, which procure the energy. Consequently, they run tenders based on delivery needs at the lowest cost since various companies bid. The other one is the investment tax credit (ITC) policy responsible for great incentives. Besides, the investor return is excellent and enough to facilitate high-quality power delivery.
On the other hand, it is merchants who are in charge of the energy storage proposition. Some of the significant challenges are finance and high risk. There is also a wide array of market players defining the same.
As of 2030, the US’ energy storage capacity would go up to 49%. However, that is not something one can say about Europe confidently because of the current trend. In 2014, the potential was at 44%, but that had changed to 30% as of 2019. With that trend, it wouldn’t be a wonder to be standing at 20% and 13% by 2025 and 2030, respectively. As things are, China and the US are doing way better in energy storage deployment, and it is next to impossible for Europe to get at per with the two.
Nevertheless, McCarthy acknowledges Europe leads to variable renewable energy globally. The region has embraced both wind and solar. During the coronavirus lockdown periods, many countries recorded low and even negative power prices. It resulted from supply exceeding demand, and the solution to that is energy storage.
It is essential to acknowledge that Germany has put effort into that. It has an Innovation Tender, and the agreement includes a combination of solar projects and energy storage all in one, and the contract is to go up to 2028. It is not its first move because it was also one of the six Western European countries that purchased control reserves. However, since battery storage is not entirely reliable, especially when the market saturates, it had to look for alternatives.
It is the same case with France, where various projects are revolving around energy storage. By 2013, Spain wants to have hit a target of 2.5 GW energy storage. An Italian grid operator Terna plans to but reserves of 230 MW. Therefore, the future of energy storage in Europe is, to some extent, bright.