EU battery storage could slash energy costs by €9B annually, says report

A new report by UK-based energy think tank Ember suggests that the European Union could save significant money on gas costs by deploying battery energy storage systems (BESS) to capture excess wind and solar energy. According to the report, the EU could save up to €9 billion annually by 2030.

Titled EU Battery Storage Is Ready for Its Moment in the Sun, the report is based on an analysis of power prices and hourly generation data.

The data from Ember’s projections is striking:

• The headline of saving up to €9 billion per year in gas costs by 2030 by deploying BESS stems from wind and solar, forecast to generate an excess of 183 TWh per year by 2030, through midday generation and morning and evening demand imbalance.
• If EU countries were to shift this excess via storage and interconnectors and replace fossil gas generation, reliance on imported gas would fall, and gas purchase costs worth a claimed €9 billion would be avoided.
• That’s even with falling fossil use: Fossil fuels generated 17% less electricity in the first half of 2024 than in the same period in 2023, the lowest share in the EU electricity supply ever.

Current trends and other valuable data points back the extrapolated data:

• Between August 2023 and July 2024, nine EU countries saw solar alone exceeding 80% of their hourly domestic demand.
• In June 2024 alone, Germany could have avoided a reported 36 GWh of fossil power and up to €2.5mn in fuel costs with just 2 GW more of additional batteries.
• The report highlights a trend for longer-duration batteries, moving from current 2-hour duration projects towards 4-hour durations across Europe. It notes that new storage tenders are creating demand for projects up to 8 hours.
• The benefits add up for solar projects as well: for example, in Spain, in the first half of 2024, zero or negative prices were experienced in 14% of hours, compared to 1% of hours in the first half of 2023, and the trend is expected to continue.

Overall, renewable energy is projected to meet an average of 49% of the EU’s hourly electricity demand by 2030, up from 27% in 2023.

Image via Ember

Reducing barriers, boosting flexibility

The report notes several recommendations to help continue widening storage to support wind and solar, including removing regulatory barriers and improving system planning to allow for solar co-location with batteries. Ember says grid operators should also make available granular and timely data, such as via grid hosting capacity maps, on the grid’s status to assist with investment decisions.

Furthermore, the report suggests that National Energy and Climate Plans should send stronger policy signals to support transitioning towards more storage and demand-side flexibility, also called clean flexibility.

Further support for this clean flexibility is emphasized throughout the report and later recommendations.