Research agency Kalavasta has conducted a study on behalf of Energy Storage NL into the benefits of battery storage in the electricity system. The report shows that the use of battery storage leads to lower energy prices, more use of sustainable energy and cost savings for grid management. Every year, batteries can generate up to €300 million or more in system benefits, which largely benefit consumers, companies and grid operators. The benefits are greatest for the first gigawatts of battery storage.
Affordable electricity for everyone
The research shows that battery storage can reduce energy prices for electricity customers. By storing energy when demand is low and releasing it when demand is high, batteries can help absorb price spikes and thus match supply and demand. The result is that energy prices are stabilized and electricity customers ultimately pay lower bills. In some scenarios, this benefit could amount to up to €1.4 billion per year for electricity customers. Knowing that scarcity and therefore higher energy prices will become increasingly common, battery storage is essential to keep energy bills affordable for consumers, companies and industry.
More sustainable energy and less CO2 emissions
Another crucial aspect of battery storage is the promotion of sustainable energy in our electricity system. Due to the increase in wind and sun, there will increasingly be excess electricity. Batteries play a key role in integrating solar and wind energy into the grid.
During periods of renewable energy oversupply, batteries can store this excess energy, ensuring it is not lost and remains available when demand peaks. This not only reduces CO2 emissions due to dependence on fossil fuels, but also maximizes the use of clean, sustainable energy sources. For example, the report by Kalavasta shows that just 3 GW of batteries in 2030 can lead to 2.5 TWh less curtailment and a CO2 reduction of 0.5 Megaton.
Grid operators benefit from a more efficient system
In addition, battery storage helps to improve the reliability and stability of the electricity grid. Fluctuations in the supply of renewable energy sources, such as wind and solar energy, can be absorbed by batteries, keeping supply and demand in balance. This contributes to a more reliable electricity system that is better able to withstand variations in weather and other external factors. Batteries also significantly reduce balancing costs, which would likely increase in their absence.
Additional financing necessary
Despite the advantages that batteries offer in the energy system, the question is whether these will ultimately be realized. This has everything to do with the high grid rates that batteries have to pay, which puts pressure on the business case. While batteries in Belgium and Germany are exempt from paying grid rates.
Rob Terwel, partner at Kalavasta:
The business case and system benefits of batteries depend on many factors, such as battery investment costs and fuel prices. It is possible that there are positive system benefits, but still a potentially negative business case due to grid tariffs. The structure of network tariffs therefore deserves further consideration to reflect actual transport costs.
The conclusions give reason to consider additional measures for the energy storage sector. Maarten van den Heuvel, chairman of Energy Storage NL:
This report clearly shows that batteries have great social and economic added value for the Netherlands. Battery storage is indispensable in our new energy system and ensures that the energy supply remains reliable and also becomes more sustainable, efficient and cheaper. We call on policymakers to no longer only look at the costs of battery storage, but also at the benefits that storage offers in the energy system. The billions in savings that battery storage makes possible must therefore be reflected in the ACM's tariff system, the compensation from the grid operators and the government's incentive framework.
