Energy Storage Roadmap progress: ESNL lacks ambition
Last Monday, the Ministry of KGG in a Chamber letter provided an update on the actions in the Energy Storage Roadmap. In early 2023, this Roadmap was developed in consultation with ESNL, with the goal of better defining the role of energy storage in the energy system and identifying actions to advance it. Through the Chamber letter sent, the progress of actions is now reviewed and updated.
Update in House letter: cabinet working on flex target
The Energy Storage Roadmap update emphasizes the importance of energy storage as part of a flexible energy system, without setting a specific national target. Starting in 2026, the Netherlands will report biennially on flexibility targets, including storage, in line with European regulations. The government is working on improved monitoring and scenario models to better predict the growth of energy storage. In doing so, the cabinet is also examining scenarios for strong growth of batteries after 2030 and developing a vision of the necessary flexibility solutions in a CO2-free electricity chain.
The government will make inter-governmental agreements with decentralized authorities in 2025 on the spatial facilitation of batteries as part of the agreements on the further development of the energy system. Among other things, it is being explored whether adaptation of the Environment Act is necessary or can help.
One spearhead is promoting Long Duration Energy Storage (LDES), which contributes to grid stability and security of supply. Because market prices do not adequately reflect the social value of LDES and investments lag behind, LDES will be included in the 2025 DEI+ grant.
The parliamentary letter also refers to the study of the costs and benefits of heat storage in heat networks by Invest NL and Energy Storage NL in which it was shown, among other things, that heat storage can reduce costs in heat networks. The ministry is currently considering a follow-up study of the financing options for heat storage. It is also working on a guide to heat storage for decentralized authorities, supported by a fact sheet through the National Local Heat Transition Program.
For molecule storage, particularly hydrogen, the cabinet will publish a vision for safe underground storage, with accompanying measures, in 2025. An envoy has been appointed to guide this process. The envoy will come out with its advice later this year
Response Energy Storage NL: National Flex and Storage Program.
Energy Storage NL is pleased to read that the new cabinet also supports the importance of energy storage and commits to the actions written down iot the Roadmap. Nevertheless, ESNL misses in the updated version of the Roadmap the ambition now needed to accelerate energy storage.
Rising energy costs, increased problems around grid congestion and the desire to become energy independent show that energy storage - both in electricity, heat and molecules - is indispensable for an affordable, stable and independent energy system. The urgency to therefore work toward conditions that encourage accelerated development of energy storage is missing from the updated Roadmap, according to the industry.
Specifically, ESNL calls for targeted prioritization from the more than seventy actions now listed in the Roadmap. The resulting selected priorities should eventually be reflected in a National Flex and Storage Program, as was previously done for Hydrogen and Green Gas. This will enable much more focused management of the development of energy storage in the Netherlands. ESNL makes the following suggestions for this National Program.
- Flex and storage objective
The minister notes, in line with the ESNL Market Study 2024, that the first storage projects are currently getting off the ground. This is happening because developers are currently taking a lot of risk because key earning markets are filling up fast. Eventually, not a "number of gigawatts" of storage will need to be realized, but a multiple of that to achieve a fully sustainable energy system. For batteries alone, Netbeheer Nederland expects up to 70 GW of battery power by 2050. The Roadmap presents no strategy for moving toward such sizes. A flexibility target, with a sub-target for energy storage, is therefore needed. A concrete objective that provides insight into storage needs at high, medium and low voltage is essential, to which a concrete timeline with milestones and decision moments should be linked. This will provide clarity about the desired amount and interpretation of energy storage in the energy system.
- Funding approach
There is currently much uncertainty about both the short-term and long-term financeability of energy storage. In the short term, we see that rising transmission tariffs are increasingly weighing on the business case. The new time-based transmission charge (TDTR, previously called "ATR85"), which allows a discount for storage, is a nice first step. Unfortunately, it does not address the growing uneven playing field with neighboring countries. In addition, we are already seeing that key earning markets are filling up as quickly, making the long-term business case for energy storage unclear. All this ensures that financiers are still reluctant to provide significant capital. Energy Storage NL has therefore previously research done on the benefits of energy storage in the energy system. It shows that some €300 million in system benefits annually, with no obvious compensation. For example, batteries can reduce grid operator costs and thermal storage can reduce heat costs. It is therefore important that the government, grid operators and the storage sector come to a financing approach that considers targeted subsidies, appropriate compensation and new markets, such as a capacity market, that match the expected-and necessary-growth of storage in the energy system.
- Action perspective Provinces and Municipalities.
The Roadmap lacks a concrete action perspective for provinces and municipalities. The ambition to reach inter-governmental agreements for batteries with provinces and municipalities by 2025 is welcomed by the industry. In fact, in discussions with provinces and municipalities, the lack of clarity from central government and grid operators about where, how much and under what conditions storage should be located is often discussed. As a result, the permitting process for storage is stalling, while acceleration is precisely what is needed now. The storage sector therefore wants to work with central government and grid operators to identify suitable storage sites and create the preconditions that can serve as a basis for licensing. - System integration via energy storage
Energy storage makes system integration possible. To do so, however, it is important that electricity storage, heat storage and molecule storage no longer be treated separately, as is currently the case in the Energy Storage Roadmap, but rather start acting together in a single energy system.
We see that excess electricity generation is increasingly causing problems. This has major consequences for congestion, among other things, as well as for the financeability of solar and wind. We therefore need to start thinking now about what to do with this excess electricity. For example, do we first store this electricity in batteries and when these are full do we then convert it towards heat (storage) and molecules (storage)? This requires system choices beyond curtailing wind and solar energy.
Energy storage as keystone future energy system
Energy Storage NL will present a National Energy Storage Action Plan later this year in which the industry intends to provide the cabinet with new proposals for the Energy Storage Roadmap. The industry looks forward with confidence to further cooperation with the cabinet to ultimately make energy storage the keystone of the future energy system.
