Key facts
- The EU's first tripartite agreement on energy storage aims to increase capacity to 30-35 GW by 2028.
- This initiative seeks to capture excess solar and wind power, which is currently wasted or leads to negative prices.
- Battery costs have decreased by approximately 93% between 2010 and 2024.
- Challenges remain in market design, grid access, and securing a domestic supply chain for battery components.
- The EU has low self-sufficiency in critical raw materials like graphite, lithium, cobalt, and nickel.
The European Union has taken a significant step towards addressing the issue of wasted renewable energy by signing its first tripartite agreement focused on energy storage. This pact, agreed upon by the European Commission, energy ministers from 22 member states, and various industry stakeholders including developers and financial institutions, places batteries at the forefront of plans to better capture and utilize solar and wind power.
The agreement pledges to deliver between 30 and 35 GW of new energy storage capacity by 2028, a target that would double the current share of storage in meeting peak electricity demand to 10 percent. This initiative is crucial as the surge in renewable energy generation has led to more hours of cheap, negative, or curtailed power when the grid cannot absorb it, negatively impacting the business case for renewables and hindering the EU's 2030 climate goals.
Battery technology is seen as the key solution, with costs having fallen dramatically by approximately 93 percent between 2010 and 2024. Europe has seen record installations of new battery systems, leading some to classify batteries as essential grid infrastructure rather than just backup technology. Projections suggest that increased storage could displace a significant portion of gas imports, leading to substantial cost savings and reducing grid congestion.
However, the agreement acknowledges several persistent barriers. Market design issues, such as batteries being charged network tariffs twice and markets failing to reward the full range of services they provide, create revenue volatility. Grid access and permitting processes also pose challenges, with storage projects often facing lengthy queues. Furthermore, despite EU support initiatives, the bloc struggles with industrial policy, remaining reliant on Asian battery cells and facing a growing trade deficit. Securing raw materials like lithium, cobalt, and nickel also presents difficulties due to low self-sufficiency and local opposition to mining projects.