Due to the shortage of lithium resources, the installed capacity of battery energy storage in Europe is expected to level off between 2024 and 2027, while the European continent will need 200GW of energy storage by 2030 to absorb more renewable energy.
Analysts from research consultancy Delta-EE and the European Energy Storage Association (EASE) recently revealed the content of the sixth edition of the European Market Monitor on Energy Storage (EMMES 6).
Energy storage analysts at EASE said that failure to deploy enough energy storage could make it difficult to meet renewable energy deployment targets and make Europe dependent on fossil fuels to balance the grid. By 2030, Europe (including the UK) will need 200GW of energy storage to accommodate the high percentage of renewables it pursues. By the end of the year, it should have a cumulative installed battery storage capacity of just over 10GW, a third of which will be in the UK (excluding Northern Ireland).
This means that, in ten years' time, annual new capacity additions will have to rise to 14GW, up from around 1GW in 2019/20.
"The critical gap between historical installed capacity growth and actual power system demand highlights the urgent need to advance energy storage deployments today, especially as wind and photovoltaics continue to grow," she added.
“Without sufficient energy storage in the system, not only will we not be able to meet the RePowerEU targets, but we will be limited to the flexibility of fossil fuels, which further jeopardizes the security of supply in the EU.”
Developments this year and last were positive, but still well below the 14GW figure. Delta-EE's head of flexibility and energy storage, John Ferris, said 3GW of new capacity was added in Europe last year, of which 1GW was residential storage.
In 2022, the company forecasts that more than 5GW of battery storage will be installed, implying a cumulative installed capacity of more than 10GW. Battery projects are also getting bigger, with deliveries of 50MW+ projects doubling from 16 last year to 33 this year.
Data suggests that Europe will have around 60GW of battery storage by 2030, which is well short of the 200GW target. Although this market forecast does not include technologies other than electrochemical cells, Ferris said that Delta-EE expects to add more than 50GW of pumped hydro by then, but it still falls short of the target figure.
According to EMMES 6, several countries, including the UK, Germany, Ireland and Italy, are driving battery storage deployment in 2021 and 2022, as shown in the chart below, they account for a quarter of the total battery storage deployment of more than 5GW three.
However, there are more countries in 2021/22 than in previous years, when Germany and the UK alone accounted for the majority of deployments on the continent, with others gradually accounting for an increasing proportion, but by 2030 Four countries, the UK, Germany, Ireland and Italy, will still account for more than half.
According to Delta-EE, the UK will have 3.6GW of battery installed capacity by the end of 2022 and 14.4GW by 2030, with capacity expected to jump to 1.7/1.8GW in 2022, 2.45GW in 2023, and then It will stabilize at 1~1.5GW over the next seven years.
New ancillary services and wholesale electricity deals make it an attractive market, but the expected slowdown could signal saturation.
It is expected that by the end of this year, Germany's installed capacity will be slightly higher than that of the United Kingdom, reaching 3.9GW, and will reach 14.5GW by 2030. It has been driven by the household market, and the proportion of households will gradually decrease in the future.
The pairing of energy storage with residential PV systems remains the main driver for the residential market, with utility-scale energy storage expected to account for around 35% of Germany’s annual energy storage deployments.
For the Italian market, by the end of 2022, the battery capacity in the market will reach 900MW, the vast majority of which are also for household use, driven by Italian government policies.
However, from 2023 onwards, the situation will be completely reversed, with Italy's pre-table utility-scale energy storage accounting for more than 80% of installed capacity, and Italy's cumulative battery installed capacity of 5,200MW in 2030.
France, a relatively small market, is also expected to have 3.2GW of battery capacity by 2030, up from 670MW at the end of 2022, as nuclear power becomes increasingly unreliable.
Ireland is a big part of European deployments in 2021 and 2022, but they plan to interconnect with the French market, which means annual deployments are expected to drop from 760MW in 2021 to 300MW in 2022-2024, and by 2030 Install 3.8GW.
Greece recently announced a 3GW energy storage target for 2030, with 16GW of approved projects underway, and while it is unlikely that all of these projects will eventually be built, it is expected to meet its 2030 energy storage target.
