A recent study commissioned by key industry players, including Fluence, BayWa r.e., ECO STOR, enspired, and Kyon Energy, reveals that battery storage is a pivotal catalyst for accelerating Germany’s energy transition. The study, conducted by Frontier Economics, emphasizes the urgency of completing and implementing the electricity storage strategy proposed by the Federal Ministry of Economics to meet the country’s growing energy needs.
Key Findings
By 2030, the study projects a fortyfold increase in battery-based energy storage in Germany, reaching a staggering 57 GWh with a connected capacity of 15 GW. This surge is expected to generate €12 billion in added economic value while simultaneously reducing the cost of electricity for end-customers.
Additionally, the deployment of storage could eliminate the necessity to build an extra 9 GW of new gas-fired power plants by 2030, resulting in a potential reduction of up to 6.2 million tonnes of CO2 emissions.
Storage’s Crucial Role in the Energy Transition
The study underscores the critical role of large-scale battery storage in Germany’s energy transition. Dr. Christoph Gatzen, Director at Frontier Economics, emphasizes that without the flexibility provided by storage, the country may face higher economic costs due to increased gas imports and expensive curtailment of renewable generation.
The deployment of storage is predicted to follow a trajectory similar to the growth experienced by photovoltaic (PV) technology, driven by market forces rather than government funding.
Economic Value and Environmental Impact
According to Frontier Economics, utilizing storage to shift electricity availability can generate around €12 billion in added economic value by 2050. This estimation is based on savings from wholesale markets alone and is expected to increase when considering additional benefits like system services, reduced CO2 emissions, and participation in intraday markets.
Furthermore, the study suggests that large-scale storage systems have the potential to limit CO2 emissions by 6.2 million tonnes by 2030 and approximately 7.9 million tonnes in 2040 compared to an electricity system reliant on gas-fired power plants.
Reducing the Need for Gas-fired Power Plants
The study forecasts that the deployment of energy storage systems will significantly reduce the need for new gas-fired power plants, easing the pressure to invest in additional gas infrastructure. While Germany needs to develop approximately 26 GW of new gas-fired power plants by 2030, storage deployment, as per the model, could cut this requirement by 9 GW.
Dr. Christoph Gatzen highlights the potential of grid-scale storage systems to be built without government funding, reducing the necessity for new hydrogen-ready gas power plants and their associated fuel usage.
Industry Expectations and Call to Action
The initiators of the study call on policymakers to ensure investment security for the development of large-scale battery-based energy storage systems. They urge the reduction of bureaucratic and regulatory barriers, advocating for market-based approaches in energy trading, capacity, and ancillary services. Additionally, they call for the Federal Government to swiftly set indicative storage targets for Germany and present a comprehensive expansion strategy aligned with the recently published electricity storage strategy.
As Germany faces a surge in demand for electricity and peak load requirements, the study emphasizes the urgent need for new large-scale storage systems and additional generation assets to ensure the country’s energy security.
