New analysis from global energy think tank Ember finds if the EU rapidly deployed clean flexibility solutions like batteries and cross-border grid connections, it could displace fossil fuel generation worth €9 billion annually from 2030.
The analysis finds that rapid renewables scale up across the EU will mean that by 2030, wind and solar generation will exceed consumption in peak hours. Across the year, wind and solar power could generate an excess of 183 TWh across all EU countries, an amount equivalent to the annual power consumption of Poland in 2023.
If that excess renewable power could be used at another time of the day through battery storage, or transferred to another part of the EU using interconnectors, then it could reduce the EU’s reliance on fossils in hours when renewables generation is lower but there is still high demand, such as in the evenings.
“It just makes sense to capture all the low-cost renewable power we can, and luckily we already have technologies that can help with that,” said Dr. Beatrice Petrovich, senior analyst at think tank Ember.
Renewables are changing price patterns, creating opportunities for flexibility
The rapid scale up of renewable power generation in recent years, especially following Russia’s invasion of Ukraine, means that wind and solar are increasingly producing a high share of EU power in good conditions. Already, solar has surpassed 80% of demand at peak hours in nine countries over the last 12 months. This included the Netherlands and Greece, where solar generation at times surpassed 100% of demand.
At the same time, zero and negative prices are becoming more common across Europe. Price spreads, or the difference between midday and evening prices, have also grown. These increased in summer 2024, compared to the previous summer, especially where solar growth has been strong.
These changes strengthen the business case for battery storage especially. Batteries can earn revenues from price arbitrage: buying low cost power and selling when prices are higher. This can lower peak power prices by providing increased competition to flexible gas assets, while also reducing reliance on fossil power at times of peak demand. More batteries will also increase power demand at peak solar times, supporting solar capture rates and the business case for investing in solar capacity.
“Batteries and solar mutually improve each other’s business case,” continued Dr. Petrovich, “But so far, we haven’t seen the same ambitious strategies for battery storage and other clean flexibility solutions that are in place for renewables. This is a huge missed opportunity that needs to be addressed now for consumers and businesses to feel the benefits of reducing fossil dependence.”
Countries could be already reaping big savings if battery deployment picked up pace
While batteries have been growing rapidly in recent years in the EU, so far capacity is concentrated in a small number of countries and planning is lagging behind both at the Member State and EU level.
Germany is the EU front runner, accounting for 46% of total EU battery capacity by the end of 2023. The country could further boost its battery capacity up to 11.4 GW by the end of 2024 under the best case scenarios of policy support and financial conditions, according to Ember’s analysis and market forecasts.
Doing so would also relieve prices, according to Ember’s analysis. If this battery capacity had already been installed this summer, Germany could have displaced 36 GWh of expensive fossil power during evening peaks in June alone. By shifting midday solar to the evening, batteries could have removed hard coal generation from the mix completely for 12 hours over that period, reducing reliance on one of Germany’s most expensive forms of power generation.
This avoided fossil fuel electricity production could have saved Germany €1.3 million in hard coal imports or € 2.5 million in fossil gas imports, depending on which fuel was displaced.