Research shows: battery storage makes energy cheaper, more sustainable and efficient
Research firm Kalavasta was commissioned by Energy Storage NL to conduct a study on the benefits of battery storage in the electricity system. The report shows that the use of battery storage leads to lower energy prices, increased use of renewable energy and cost savings for grid management. Annually, batteries can generate as much as €300 million or more in system benefits, most of which benefit consumers, businesses and grid operators. The benefits are greatest for the first gigawatts of battery storage.
Affordable electricity for all
The research shows that battery storage can lower energy prices for electricity consumers. By storing energy when demand is low, and releasing it when demand is high, batteries can help absorb price spikes, thus matching supply and demand. As a result, energy prices are stabilized and electricity customers end up paying lower bills. This benefit could be as much as €1.4 billion per year for electricity customers in some scenarios. Knowing that scarcity and therefore higher energy prices will become increasingly common, battery storage is essential to keeping energy bills affordable for consumers, businesses and industry.
More renewable energy and fewer carbon emissions
Another crucial aspect of battery storage is the promotion of renewable energy in our electricity system. With the increase in wind and solar, surplus electricity will become more common. Batteries play a key role in integrating solar and wind energy into the grid.
During periods of excess renewable energy supply, batteries can store this excess energy, preventing it from being lost and keeping it available when demand peaks. This not only reduces CO2 emissions due to dependence on fossil fuels, but also maximizes the use of clean, renewable energy sources. For example, the report by Kalavasta shows that just 3 GW of batteries in 2030 could result in 2.5 TWh less curtailment and a CO2 reduction of 0.5 Megatonnes.
Grid operators benefit from more efficient system
In addition, battery storage helps improve the reliability and stability of the power grid. Fluctuations in the supply of renewable energy sources, such as wind and solar power, can be accommodated by batteries, balancing supply and demand. This contributes to a more reliable electricity system that is more resilient to variations in weather and other external factors. Batteries also significantly reduce balancing costs, which would likely increase in their absence.
Additional funding needed
Despite the benefits that batteries offer in the energy system, the question is whether they will eventually be realized. This has everything to do with the high grid tariffs that batteries have to pay, putting pressure on the business case. This is while batteries in Belgium and Germany are exempt from paying grid tariffs.
Rob Terwel, partner at Kalavasta: "The business case and system benefits of batteries depend on many factors, such as battery investment costs and fuel prices. There may be positive system benefits, yet a potentially negative business case due to grid tariffs. The structure of grid tariffs therefore deserves further consideration to reflect actual transportation costs."
For the energy storage sector, the conclusions give reason to consider additional measures. Maarten van den Heuvel, president of Energy Storage NL "This report clearly shows that batteries have great social and economic added value for the Netherlands. Battery storage is indispensable in our new energy system and ensures that the energy supply remains reliable and also becomes more sustainable, efficient and cheaper. We call on policymakers to stop looking only at the costs of battery storage and instead look at the benefits that storage brings to the energy system. The billions in savings made possible by battery storage should therefore be reflected in the ACM's tariff system, the fees from grid operators and the government's incentive framework."
Download the entire report here or download the two-pager here.
