As European countries strive to transform their energy systems, policymakers, regulators and energy sector planning agencies are increasingly faced with complex decisions about developing reliable, affordable, and clean energy systems. Decarbonising the European energy system poses new challenges, such as increased energy demand coupled with intermittent energy supply, which can result in a mismatch between energy supply and demand, and cause supply interruptions such as power cuts.
An increasing number of variable renewable energy (VRE) sources, such as wind and solar power, in combination with the retirement of dispatchable, conventional generation units mandate greater grid flexibility and responsiveness in order to facilitate stable energy supply. System flexibility is particularly needed in the EU’s electricity system, where the share of renewable energy is estimated to reach around 69% by 2030 and 80% by 2050.
Energy storage is a key flexibility tool to help address these challenges, as it can serve to ensure grid stability and reliability, manage voltage fluctuations and frequency control, and provide operating reserve, i.e. electricity supply that can quickly be made available in case of an unexpected loss of power generation. Energy storage technologies can also facilitate the electrification of different economic sectors, such as buildings and transport while simultaneously providing greater grid stability and flexibility.
Energy stored in electric vehicle batteries can be used to power homes at moments of low energy supply or can be used as a tool to absorb excess electricity in times of high renewable generation and low demand. Technological advancements in energy storage systems have also improved storage system performance, safety characteristics, and affordability, meaning these systems are becoming a compelling and increasingly cost-effective alternative to conventional flexibility options such as retrofitting thermal power plants or transmission network upgrades. This is particularly true for lithium-ion battery energy storage, the cost of which has dropped by 89% in the last decade. As such, grid-connected energy storage has gained the attention of power utilities, regulators, policymakers, and the media across the world as a technology to provide cost-effective grid services and enable increased deployment of variable renewable energy (VRE) sources.
In Europe, energy storage to date remains below 60 GW of installed capacity, mainly in the form of pumped hydro storage, but is expected to increase by over 3-times by 2030 and 10-times by 2050.
What is storage?
Energy storage is the process of accumulating energy in particular equipment or systems so that it can be used at a later time, either when companies and sectors need to save energy or when demand increases, or grid outages occur. Energy storage always maintains the supply-demand balance for consumers and prevents challenges such as inconsistent power and sudden price surges through frequency regulation and flexibility ramping. The storing of electricity typically occurs in chemical (e.g., such as lead acid batteries or lithium-ion batteries) or mechanical means (e.g., pumped hydro storage). Thermal energy storage systems can be as simple as hot-water tanks, but more advanced technologies can store energy more densely (e.g., molten salts, as used for concentrated solar power projects). Storing energy will always be accompanied by energy losses, which is described by the efficiency of different energy storage types.
