Alfons Westgeest, Executive Director EUROBAT
Alfons Westgeest has 30 years of experience in executive positions in associations in a variety of sectors such as automotive, engineering, electronics, transport and logistics. He has a high level contact network in the European Union, Standards Organizations and Chambers of Commerce. Alfons holds a Masters in Commercial and European Law from Leyden University, Netherlands. He has served as a Board Member of the American Society of Association Executives and is an ASAE Fellow.
How significant a role will batteries play in helping Europe achieve its energy and climate goals?
Batteries of all technologies (lead-based, lithium-based, nickel-based and sodium-based batteries) are already playing a significant role in helping Europe achieve its energy and climate goals. For example, advanced lead-based batteries are already providing micro hybrid functionality in around 75% of new car models placed on the market by European car manufacturers in 2013. This results in fuel efficiency savings of 8-10%, with technology still being improved year-on-year. In hybrid, plug-in hybrid and full electric vehicles (including buses, trams, boats and bikes), lithium, nickel and sodium-based batteries provide varying levels of full electric propulsion, paving the way for a decarbonised European transport sector in the future.
In relation to the establishment of an EU Smart Grid, battery energy storage (BES) technology will continue its development as an important means for homeowners and businesses to increase their percentage of self-consumed electricity from PV panels from a maximum of 30% without storage to around 70%, reducing the amount of additional power needed from the grid. This is already being encouraged on a national level, as demonstrated in Germany’s recent storage subsidy scheme. In the longer term, residential BES also has the further potential to be aggregated and provide active grid support.
The market for medium and larger scale grid-connected energy storage (decentralised and centralised) also has high potential for rapid development between now and 2020, due to a combination of ambitious EU climate policies, the successful integration of renewable energy sources across Member States, and a shared determination to achieve security of power supply. Although still at the initial phase, real progress is already being made, for example, with Italy’s TSO Terna committing to implement 130MW of battery energy storage in the next 3 years, and the UK testing the impacts of a single 6MW battery installation (the biggest in Europe) in an L18.7m project1.
What are the main drivers behind investment in storage technologies? Is there anything that can be done at a policy level to ensure that these drivers create a sufficient level of investment?
From a purely technical point of view, investments into storage technologies are already encouraged by the high penetration of renewable energy sources in certain EU countries. In such situations, Transmission and Distribution Service operators are faced with high peak loads, more balancing of severe requirements, and the challenge to continue matching supply and demand.
BES has already been targeted through demonstration projects and real installations as a solution to maintain grid stability and flexibility in spite of these challenges. Although demand is there for their implementation, the main current obstacles to their wider take-up are mostly related to the lack of a clear regulatory framework for storage.
In the current pre-competitive phase, regulatory authorities can promote market take-up and investment through supportive incentive schemes. This approach has already been followed by Germany, whose EUR 25 million storage subsidy programme provides financial support to all systems containing battery energy storage installed in Germany in 2013 (with a maximum capacity of 30kW).
EUROBAT welcomes the introduction of harmonized storage incentive schemes in Europe as a short-term stimulus to encourage the take-up of battery energy storage at distribution and customer levels. However, in the longer-term electricity from batteries (such as for battery-integrated PV systems) must become fully market competitive in its own right. Here, a supportive regulatory environment will be important (see below).
Storage is seen as key to the efficient inclusion of energy from renewable sources into the grid. What are the main barriers to be overcome in order to create a smart grid in which renewables are fully integrated?
As I have mentioned, the implementation of renewable energies into different levels of the European grid creates significant challenges for grid operators at all levels to retain generation adequacy. While the proliferation of large-scale renewable generation sources such as offshore wind parks will need to be supported by investments into strengthening the transmission grid, Europe’s low and medium-voltage distribution networks will also be required to accommodate an increasing number of small- or medium-scale RE sources, decoupling supply from demand.
BES technologies have the ability to act fast and are modular to meet power and energy requirements and have therefore been identified as key balancing technologies to support DSOs (and TSOs) in maintaining grid stability and flexibility. However, they will still need to be implemented alongside a host of other options, including demand-side participation and increased back-up generation.
The role of DSOs will also have to change in line with these developments, as they become responsible for the smart management of the electricity flowing in their grids, by dynamically managing distributed generation and demand. Consumers must also increasingly be encouraged to actively manage their energy demand through demand response mechanisms.
A recent EC working paper on the future role and challenges of energy storage2 stipulates that the regulatory framework should be technology neutral. Is this a valid approach in your view, or are there some clear technological winners that should be the focus of R&D?
EUROBAT agrees that the regulatory framework should be technology neutral, in order to allow for free and fair competition between all technologies. The expected demand for storage technologies is significant, with RWTH Aachen for example projecting that an optimised European electricity system with close to 100% renewable generation will require short-term hourly storage of 2000 GWh. This demand can best be met by a portfolio of different storage technologies providing a range of different functionalities to meet the specific demands of each installation.
However, it should also be highlighted that batteries are at present one of the technologies of choice to be installed in this capacity. A lot of other (non-PHS) storage technologies being discussed are still in the development phase, while batteries of all technologies – lead, lithium, nickel and sodium – are already available on the market, ready as a mobile and scalable solution to resolve specific problems raised by RES integration at the distribution level, or to create interest and momentum at the customer level for end-users.
In this context, EUROBAT considers that R&I into mature storage technologies should prioritise technological improvements to facilitate the integration of those existing and commercialised storage technologies into the different levels of the grid (both cell- and systems-level research, including demonstration projects). This will improve the immediate business case for storage at each level, and help ensure that the demand for storage is met as quickly as possible. In addition, this would also help maintain EU industrial leadership, increase our energy independency and boost Europe’s economy. At present, there are already considerable battery production facilities in Europe employing over 30,000 people who are directly involved in battery manufacturing on the continent, but more production facilities could be created.
How important has the SET-Plan been in creating a framework to promote the development and market uptake of power storage technologies?
The European Industrial Initiatives on Solar, Wind and Electricity Grids from the SET-Plan have been successful in accelerating the overall knowledge development and boosting technology up-take. The key European Technology platforms - PV TP, TPWind, SmartGrids and EPoSS - have all recognized the importance of research and innovation to improve energy storage (and battery energy storage in particular) to accelerate the deployment of the SET-Plan and a further technology transfer to a low-carbon economy in Europe.
As for the next steps in promoting BES, we still need a strong basis for basic research but additional efforts will also be needed to foster public-private partnerships and to ensure real market uptake to help to get the low-carbon business to take off. Europe has a strong and well-established battery manufacturing basis. The European battery industry is ready to respond to SET-Plan goals but requires further harmonised support schemes to ensure security and guaranteed investment returns.
What changes in the regulatory framework, in your view, would facilitate the better integration of power storage in the supply chain?
At a political level, it will be crucial for EU and national regulators to establish a supportive and comprehensive market framework for storage technologies within the electricity sector. For example, due to the liberalisation of the European and national energy markets, we still need to establish energy storage as a separate asset from generation and consumption, and afterwards decide how this asset should be defined. A better defined market framework will increase certainty and improve conditions for investing in storage technologies.
In parallel, it’s also imperative that European industry is provided with continued opportunities to demonstrate the performance and competitiveness of different storage technologies as a flexibility option within the European grid. Demonstration projects will validate the combination of services that batteries can provide in this capacity, and as well as resulting in faster market deployment, and will be valuable in bringing together the range of different stakeholders necessary for their full implementation.
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