Energy storage is regarded as an enabler of the energy transition, However, the unavailability of long-duration and high capacity storage systems is limiting the role storage can play in addressing energy transition challenges. According to Julien Jansen, market application director at Fluence, for the world to achieve GW-scale energy storage capacity deployment, new and innovative thinking needs to be applied.
Jansen stated this in a session hosted by the European Commission during the EU Sustainable Energy Week. The session explored the main challenges hindering the rollout of storage capacity, and explored how to build a viable business case for storage technologies.
Jansen said energy stakeholders, regulators and financiers need to “stop thinking of energy storage as a new industry that needs pilots or incentives, storage has been here for a long time. It just needs massive capital because the business concept is already mature.”
He said overreliance on fossil fuels over past decades is the main reason energy players failed to realise the full benefits of storage, maximise low-carbon services such as voltage regulation and address renewables fluctuation.
He added that the biggest challenges today hindering the growth of the market are a lack of capital, project permits and approvals that take too long, and the need to justify to investors that storage is bankable.
He said storage developers, owners and operators need to be innovative by applying advanced software solutions that optimise the performance of their systems.
He added: “They need to apply advanced software services that can maximize revenues and system performance, playing a key role in revenue accumulation.”
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“Policymakers need to move forward and streamline approval and permitting processes. Policies need to remove barriers so that investors can go easily into the market,” said Jansen.
Patrick Clerens, secretary-general at EASE, who also spoke during the session, added: ”Storage projects are seen as financial risks due to revenue volatility. Short-term contracts weaken the energy storage business case since investors need to have a view on revenue to ensure their projects are bankable.”
He said the majority of revenue within the market is coming from balancing services, however, long-term contracts are still vital to increase the bankability of projects and revenue accumulation.
Clerens added: “Revenue streams must be clear and visible to allow for more investments.”
He said the recent crisis of soaring energy prices in Europe does not mean storage market players are on the wrong path in delivering the energy transition, but current approaches need to be tweaked.
The market needs to focus on long-duration systems, suggested Clerens, and concentrate on projects that enable renewable energy shifting through bulk, large scale and long term storage. He said the market needs to shift from 4hr to 12hr storage systems to minimize renewables curtailment.
He reiterated, “the current legislative framework is pushing energy storage into regulated entities but should be market-based.
“Energy storage is needed to achieve the energy transition and energy security of supply but financial risk is hampering the market.”
Find out more about the session.