Energy Storage NL welcomes EU commission recommendations around energy storage

This week, the European Commission adopted the EU proposal on EU electricity market reform released. Specifically, it proposes adjustments in existing EU legislation. For example, it is now possible for Member States to introduce support schemes for demand response and storage.

For energy storage, the committee also has a recommendation about energy storage published. It recognizes the added value of energy storage for the European energy system. For example, EU commission sees that energy storage can play a crucial role in decarbonizing the energy system, contributing to energy system integration and security of supply. To accelerate the rollout of energy storage in the EU, the commission comes up with the following 10 recommendations for EU member states.

Energy Storage NL is pleased that the added value of energy storage is recognized not only in the Netherlands but also within the European Union. We therefore call on the government, grid operators and the ACM to translate the recommendations into national policy.

Recommendation Energy Storage

1. Member States shall take into account the dual role (producer-consumer) of energy storage when defining the applicable regulatory framework and procedures, in particular when implementing Union legislation on the electricity market, in order to remove existing barriers. This includes avoiding double taxation and facilitating permit granting procedures. National regulatory authorities should also consider such a role when setting network tariffs and tariff regulations, in accordance with Union legislation.
2. Member States shall identify the short-, medium- and long-term flexibility needs of their energy systems, and in their updates of national energy and climate plans, strengthen the objectives and related policies and measures aimed at cost-effectively promoting the deployment of energy storage, both utility-scale and behind-the-meter storage, demand response and flexibility. Member states should also assess the production capacity needs for relevant energy storage technologies.
3. Member States, and in particular their national regulatory authorities, shall ensure that energy system operators further assess the flexibility needs of their energy systems when planning transmission and distribution networks, including the potential of energy storage (short- and long-term) and whether energy storage can be a more cost-effective alternative to grid investment. They should also consider the full potential of flexibility resources, particularly energy storage, when assessing their connection capacity (e.g., considering flexible connection contracts) and system operation.
4. Member States identify potential funding gaps for energy storage in the short, medium and long term, including behind-the-meter (thermal and using electricity) and other flexibility instruments, and whether there is a need for additional flexible resources to achieve security of supply and environmental targets is identified, the potential need for financing instruments that provide visibility and predictability of revenues should be taken into account.
5. Member states shall examine whether energy storage services - particularly the use of flexibility in distribution networks and the provision of non-frequent ancillary services - are adequately remunerated, and whether operators can add up the remuneration of multiple services.
6. Member States shall consider competitive bidding procedures where appropriate to achieve a sufficient level of deployment of flexibility resources to achieve transparent security of supply and environmental objectives, consistent with state aid rules. Potential improvements should be explored in the design of capacity mechanisms to facilitate the participation of flexibility sources, including energy storage. by ensuring that reduction factors are appropriate in light of the security of supply objective pursued, by lowering the minimum eligible capacity and minimum bid size, facilitating aggregation, lowering CO2 emission limits, or prioritizing greener technologies, in accordance with the State Aid Guidelines on Climate, Environmental Protection and Energy.
7. Member States shall determine what specific measures, regulatory and non-regulatory, are needed to remove barriers to the roll-out of demand response and behind-the-meter storage, e.g. linked to the acceptance of electrification of end-use sectors based on renewable energy sources, the deployment of individual or collective own consumption and bi-directional charging through the use of electric vehicle batteries.
8. Member States accelerate the deployment of storage facilities and other flexibility instruments in islands, remote areas and the EU's outermost regions, areas with insufficient grid capacity and unstable or long-distance connections to the main grid, for example through support schemes for low-carbon flexible resources, including storage, and review grid connection criteria to promote hybrid energy projects (i.e. renewable generation and storage).
9. Member states and national regulators publish detailed data on grid congestion, renewable energy curtailment, market prices, renewable energy and greenhouse gas emission content in real time, as well as installed energy storage facilities, to facilitate investment decisions on new energy storage facilities.
10. Member States continue to support energy storage research and innovation, in particular long-term energy storage and storage solutions linking electricity to other energy carriers, and continue to optimize existing solutions (e.g. efficiency, capacity, duration, minimal climate and environmental footprint). Attention should be paid to risk mitigation instruments, such as technology accelerator programs and specific support schemes that guide innovative energy storage technologies to the commercialization phase.