RE: EU storage18 Jun 2020 08:18
Another aspect that the team highlighted is the cost development of electrolyzers. For now, electrolyzers carry high upfront costs, making the technology almost prohibitively expensive. The group concedes that their assumption for a large-scale hydrogen rollout presumes an attractive price development of the necessary equipment. Should that development not unfold, it is more likely that 73 GW, instead of 50 GW of battery storage, is added to the EU’s power system to deal with flexibility demands.
Additionally, the flexibility of hydrogen will play an important role. How well hydrogen or synthetic fuels can be deployed and whether they can utilize existing liquid and gaseous fuel infrastructure will impact the pace at which hydrogen is used.
Policy recommendations
The directorate-general additionally identified the best practices to enable storage technologies to proliferate. Public guidance, support, and adequate design of electricity markets and grids are key factors in this mission. The most important factor, however, is to foster viable business cases. At the moment, the authors said, “various policy barriers still hamper the development of energy storage in the EU and lead to uncertainty concerning the revenue streams to cover the project costs and risks.”
To this end, the report outlines the issues the team identified. For example, the authors recognized that the Clean Energy Package (CEP) argues that the double-charging of grid tariffs must be eliminated. However, it points to the fact that there is no monitoring at the EU level to determine whether the provisions are implemented promptly and according to their object and purpose.
“The current ‘tariffication’ practices across member states are still quite diverging, and even if eliminating double charging, do not address all possible cases,” the authors of the report said. “For example, concerning the application to existing and new storage facilities, the inclusion of conversion losses, whether the energy is traded in wholesale markets or supplied to end consumers, and the application of tariff rebates on all volumes or only for electricity providing specific services (e.g., balancing).”
Among other issues that need to be addressed in favor of a thriving storage market are dynamic electricity prices and time-of-use grid tariffs, the phasing-out of net metering, and the establishment of non-discriminatory procurement processes of non-frequency ancillary services.
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