Energy storage

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To achieve the EU’s climate and energy targets, decarbonise the energy sector and bolster Europe's energy security, our energy system needs to undergo a profound transformation.

The rapid deployment of a hugely increased share of variable renewable energy sources will require more flexibility, allowing the energy system to adapt to the changing needs of the grid and manage the variability and uncertainty of energy supply and demand.

At any moment in time, the consumption of electricity has to be perfectly matched with the generation of electricity. This balance is necessary in all electricity grids to maintain a stable and safe supply. Flexibility solutions can adjust demand and supply by allowing excess electricity to be saved in large quantities over different time periods.

Besides being an important flexibility solution, energy storage can reduce price fluctuations, lower electricity prices during peak times and empower consumers to adapt their energy consumption to prices and their needs. It can also facilitate the electrification of different economic sectors, notably buildings and transport.

Monitoring EU energy storage progress and competitiveness

The main energy storage method in the EU is by far 'pumped hydro' storage, but battery storage projects are rising. A variety of new technologies to store energy are also rapidly developing and becoming increasingly market-competitive.

Since 2020, the Commission publishes yearly progress reports on the competitiveness of clean energy technologies that present the current and projected state of play for different clean and low-carbon energy technologies and solutions. The 2023 report included dedicated sections on renewable hydrogen production through water electrolysis, and batteries, which are crucial to succeed in the decarbonisation of the energy and transport sectors.

Recommendations and guidance

A Commission Recommendation on energy storage (C/2023/1729) was adopted in March 2023. It addresses the most important issues contributing to the broader deployment of energy storage. EU countries should consider the double 'consumer-producer' role of storage by applying the EU electricity regulatory framework and by removing barriers, including avoiding double taxation and facilitating smooth permitting procedures.

According to the recommendation, EU countries should also identify flexibility needs across different timescales and ensure that system operators assess these needs when planning network developments.

In terms of financing, it suggests increasing the long-term visibility and predictability of revenues to facilitate access to finance, for example by allowing storage operators to receive remuneration for certain services that they currently provide.

EU countries should also consider instruments, such as competitive bidding procedures (in line with state aid rules) to achieve the necessary flexibility and improvements in the design of certain parameters within capacity mechanisms.

The Recommendation was accompanied by a Staff Working Document (SWD/2023/57) which looked at the role and application of storage in the energy transition, emphasising the need for flexibility, reliability and stability. It also provided some global outlook for storage deployment and an overview of best practices.

The key facts illustrated on the page below show where there is a need for increased flexibility in the electricity system and what we are aiming to achieve by 2030 and 2050 respectively.

Energy storage – key facts and actions

Hydrogen

The storage potential of hydrogen is particularly beneficial for power grids, as it allows for renewable energy to be kept not only in large quantities but also for long periods of time.

Renewable hydrogen can help improve the flexibility of energy systems by balancing out supply and demand when there is either too much - or not enough - power being generated, helping to boost energy efficiency throughout the EU.

Hydrogen is an important part of the EU strategy for energy system integration and the Commission adopted the EU hydrogen strategy in 2020.

EU initiatives on batteries

Global demand for batteries is growing rapidly, given their capacity to integrate more renewables into our energy systems and to 'green' the industry and transport sectors, with spill-over effects for the electrification of other sectors.

A new Batteries Regulation entered into force on 17 August 2023 to ensure that batteries are collected, reused and recycled in EU. Starting from 2025, the new rules will gradually introduce declaration requirements, performance classes and maximum limits on the carbon footprint of electric vehicles, light means of transport (such as e-bikes and scooters) and rechargeable industrial batteries. Starting in 2027, consumers will be able to remove and replace the portable batteries in their electronic products at any time of the life cycle.

The comprehensive governance framework of the energy union and the strategic action plan on batteries (annex 2 to the Communication on sustainable mobility for Europe (COM/2018/293)), were important steps to help build a globally integrated, sustainable and competitive industrial base for batteries in the EU. The progress made was evaluated and summarised in the Commission report on the Implementation of the Strategic Action Plan on Batteries (COM/2019/176).

Batteries Europe and batteries research

Batteries Europe, launched in 2019, is the technology and innovation platform of the European Battery Alliance, run jointly by the Commission and stakeholders in the battery industry.

It includes a wide representation of stakeholders and has a well-defined governance structure, including 6 thematic working groups, which build on the previous work of the Strategic Energy Technology Plan (SET Plan) 'action 7 on batteries', focused on competitiveness in the global battery sector.

Most of the new EU collaborative research projects on batteries are taking place under the BATT4EU Partnership, with €925 million earmarked for 2021-2027. A number of EU countries have also teamed up for 'Important Projects of Common European Interest' on batteries research and innovation.

Documents

14 MARCH 2023

Staff working document on the energy storage - underpinning a decarbonised and secure EU energy system