Budget Day 2024: what does it mean for energy storage?
On Sept. 17, the government announced its plans for the new year. The new administration values an energy transition with less dependence on foreign countries, and a greater focus on affordability. Tackling grid congestion also remains top priority. But what do the plans say about energy storage? ESNL lists the key points.
Electricity Storage
It was announced in the Headline Agreement that €1.2 billion will be cut from Climate Fund funds for green hydrogen and batteries, and this is carried through in the Ministry of Climate and Green Growth's (KGG) State Budget. The subsidy scheme for deferred delivery by solar parks - for which there was previously talk of €416.6 million - will be opened from 2025. A budget reservation for a pilot scheme of €100 million will be started. Lessons from this will be fed into the development of a measure in the next opening of the scheme. In doing so, the reserved funds will be €200 million lower than previously communicated by the previous administration.
Energy Storage NL sees transmission tariffs as the main determinant of the electricity storage business case, and sees the subsidy for deferred delivery primarily as a mitigating measure. ESNL assumes this cut is not a message of reduced need for electricity storage, and calls on the government to work with the industry as soon as possible to get the scheme up and running by 2025.
Regarding the National Grid Congestion Action Program, the central government reports making €65 million available to help companies implement smart solutions to relieve the power grid during the busiest times.
Molecule Storage
The Ministry of Climate and Green Growth is reserving €37 million for the Hystock project, with which Gasunie will realize hydrogen storage in four caverns. This is in addition to the €125 million designated from the Climate Fund for Hystock. The ministry is also publishing a vision for safe underground hydrogen storage in early 2025, for which Nel Aland has been appointed as Envoy for Underground Energy Storage since April this year. In addition, the ministry is reserving €128 million for de-risking the development of new caverns.
Energy Storage NL sees the construction of four caverns for hydrogen storage as a good first step, but sees that the construction of more caverns is necessary. Clarity from the government about the necessary number of caverns and the path towards them is seen by the sector as highly desirable.
Heat Storage
The government expects to submit the Collective Heat Act to the House of Representatives soon. This will support the growth and sustainability of collective heat systems in the built environment. To stimulate the realization of heat networks, €400 million has been opened up by mid-2024. The Guarantee Fund is a fund to cover risks for new heat networks, making financing cheaper. In addition, three new categories for electrification of industry have been announced for the SDE++, including for thermal storage high temperature heat.
Energy Storage NL welcomes the addition of high temperature thermal storage in the SDE++. However, the industry organization believes it is very important that low-temperature heat storage should also be added to the SDE++ scheme in order to create a level playing field. ESNL also calls for attention to be paid to the potential of heat storage in the Collective Heat Act and in the integral inclusion of heat storage in the construction of new heat networks. To encourage heat storage projects, it is therefore important that these projects can use the announced Guarantee Fund to cover risks in the construction of storage projects at heat networks.
