© 50Hertz

We are a systems operator and therefore take an interest in many different options that we could use to provide the systems solutions that are needed to ensure that the energy transition is a success. Storage is one of these options. But it all depends on what type of storage technology you want to use. At the most basic level, we distinguish between short-term storage (mostly battery-type storage) and long-term energy storage.

Following the rise of photovoltaics, the traditional business model underlying pumped storage facilities, which was based on one-day storage cycles, is no longer economically viable. Nowadays, we would need installations that allow for longer storage cycles (meaning they would have to be able to store larger volumes of energy). These would be used to store wind power and would provide electricity at times when only little electricity from renewables is being fed into the grid. Thanks to additional interconnectors such us the envisaged Hansa Power Bridge, we already have access to Scandinavian hydropower facilities that allow for storage at prices that are economically viable for Central Europeans. But it will only be once the share of renewables in our electricity system has risen much further that we will have urgent need for these storage facilities. It is difficult to predict whether power-to-gas will have had its breakthrough by then. For now, this is the only alternative for seasonal storage, but very expensive.

These reasons make it all the more important to have a well-functioning electricity market in place, which creates the right investment incentives and prevents macroeconomic mistakes from being made, for instance where pumped storage installations are concerned. Such facilities are, in fact, very well capable of taking on system tasks such as re-dispatch and of delivering black starts and keeping the voltage stable.

A word on flexibility. At present, we are not in urgent need of additional flexibility; there is often too much drama surrounding this issue. Also, it is not so much renewables but rather conventional power plants that need replacing with options that are more flexible. Storage – particularly battery storage – is ideally suited to this as far as the technical side is concerned. But this option is also competing with other methods such as demand-side management and control power from renewables. Some of these methods are likely to be very cost-effective in the future.

However, this does nothing to change the fact that batteries will develop at a very quick pace – not because of their relevance for the overall system, but because of the growing number of prosumers and because of e-mobility, which will cause battery prices to fall further.

Dr Dirk Biermann is Chief Officer Markets and System Operations at 50Hertz.

© BVES

We are certainly able to manage without storage for now – it's just a matter of what this is costing us.

If we want to put in place an energy system based on renewables which is also efficient and effective, we would do better to make storage a part of that from the onset.
Grids can only do one thing. They are only able to take energy from one place to another. They are a one-trick pony. By contrast, storage facilities are like Swiss knives in that they come with a lot of possibilities. Storage facilities can deliver a whole range of different ancillary services, and they can do it in a flexible and cost-effective manner.

At the same time, there is nothing to be gained from prolonging the discussion as to whether we need 'either' storage or 'grids'. The answer that, if the energy transition is to be successful and widely accepted, we will need both.

So how long do we want to keep affording ourselves the luxury of investing in grids alone? Progress on grid expansion is slow and these delays keep driving up the cost. Last year, re-dispatch costs in Germany totalled 1 billion euros, with the figure set to rise. Storage facilities could reduce costs by taking up any surplus electricity generated locally so that it can be used at a later point in time. This would eliminate the need for wind and solar installations to be throttled whilst also reducing some of the burden on grids. At the same time, the advantages associated with sector coupling would come into play.

For as long as storage facilities continue to be regarded as end users for tax purposes and are discriminated against on the balancing-energy market, they will, however, not be widely used.

Creating more flexibility in energy generation and on the demand side will be essential if our future energy system is to be a success. This is where storage could make a real difference – provided that the regulatory environment is adjusted accordingly. This could be done right now, as the Electricity Market Act is being debated by the Bundestag. It is now high time that the alternatives be given a closer look. The energy transition cannot wait for the grids to be expanded.

Mr Urban Windelen is Executive Officer of the German Energy Storage Association (BVES).