Facilitating energy storage to allow high penetration of
variable renewable energy
European Regulatory and Market
Framework for Electricity Storage
Improvement recommendations based on a
stakeholder consultation
Michael Papapetrou, WIP Renewable Energies,
Phone: +49 89 720 12 712, pmp@wip-munich.de
The sole responsibility for the content of this presentation lies with the
authors. It does not necessarily reflect the opinion of the European
Union. Neither the EACI nor the European Commission are responsible
for any use that may be made of the information contained therein.`
Project Summary & Objectives
stoRE aims to facilitate the high penetration of variable renewable energies in the European
grid by unblocking the potential for energy storage infrastructure, through:
 Analysis of the energy storage status and potential
 Assessment of the environmental considerations for the
development and operation of energy storage facilities
 Identification, assessment and reviewing together with
key stakeholders of the regulatory and market
framework conditions
- at European level
- in the 6 target countries
 Dissemination activities for improving the understanding of the benefits of
energy storage for the energy systems of Europe.
Results (1)

Current Status, Role and Costs of Energy Storage Technologies

The Role of Bulk Energy Storage in Facilitating Renewable Energy Expansion

Environmental Performance of Existing Energy Storage Installations

Recommendations for furthering the Sustainable Development of Bulk Energy
Storage Facilities – consultation process closed
www.store-project.eu
Results (2)

Guidelines for the development of PHES in environmentally sensitive sites –
ongoing consultation process

European Regulatory & Market Framework for Electricity Storage Infrastructure –
consultation process closed

Energy Storage Needs in Austria, Denmark, Germany, Greece, Ireland and Spain

Regulatory & Market Framework for Electricity Storage Infrastructure – ongoing
consultation process
www.store-project.eu
Survey Methodology

Collection and analysis of feedback from overall 55 experts, through a
questionnaire, telephone interviews, four round table discussions, feedback
to draft versions of the report, advisory board meetings
Utilities /
Industry
NGOs / Associations
Developers
Research Institutes
TSOs and others
DONG Energy
EASE
Gaelectric
École Polytechnique
Fédérale de Lausanne
50Hertz
E.ON
EREF
HSE Invest
JRC
ELIA
Endesa
HEA
JUWI
KU, Leuven
Red Eléctrica de España
RWE
Renewables Grid
Initiative (RGI)
UPB/ROSHA
RSE
Philippe & Partners (law
firm),
Verbund
Climate Parliament
Hydrowatt
SiTI
Electricity Authority of
Cyprus
Panasonic
Europe
Smart Energy for Europe
Platform (SEFEP)
ELZACO Ltd
University of Zagreb
Single Electricity Market
Documents considered
 The Electricity Directive - Directive 2009/72/EC
 The Renewable Energy Directive - Directive 2009/28/EC
 Framework Guidelines and Network Codes
 Better Governance for the Single Market - COM(2012) 259
 Making the Internal Energy Market Work - COM(2012) 663
 Energy 2020 - COM(2010) 639
 The Energy Roadmap 2050 - COM(2011) 885
 Renewable Energy: a major player in the European energy market COM(2012) 271
Ideal Market
 In the ideal electricity market, which is the target of the 3rd energy
package, all the required services are well defined and there are
transparent, liquid and competitive markets
 In such a market there would be clear signals to reflect the requirements
for flexibility, balancing and ancillary services and these signals would be
interpreted by electricity storage developers/operators, among others, to
design, build and operate their facilities accordingly or not to build if other
technologies could provide the required services at lower cost
 Non-market elements are distorting that vision (often for good reasons):
RE feed-in tariffs; financial support for transmission infrastructure and for
certain storage technologies; procurements of ancillary services based on
bilateral contracts etc.
Market Signals?
 Spread between peak and off-peak prices is decreasing,
changing the business model of energy storage and
making its viability marginal
 Uncertainties in the ancillary services markets and double
grid fees are putting more pressure, making the financing
of such plants very difficult
 Does lack of viability reflect a market signal that additional
storage is not necessary?
 Storage is necessary: Market solution or market
intervention?
Source
Energy Roadmap 2050 (Reference Scenario)
Energy Roadmap 2050 (High RES Scenario)
Eurelectric’s Power Choices
EPIA (Paradigm Shift Scenario– refers only to PV )
Source: Simon Mueller, IEA, Future Design
of RE Markets, EUFORES Parliamentary
Dinner Debate, 4 December 2012, Brussels
Installed Solar Capacity by 2030 (MWe)
91,599
195,255
65,000
768,500
Market Intervention
 Large scale storage development times can be over 10 years long,
therefore for 2020 - 2030, reliable markets signals should be available
now: Targeted regulatory interventions and initiatives should be
introduced to ensure the timely development of storage infrastructure.
 Here are listed some ideas proposed by survey respondents:
 Introduce elements that reward flexibility in RE support mechanisms
 Provide support for storage only when storing renewable excess:
grant priority dispatch and/or exempt it from grid fees and taxes
 Develop a forward services market in which the service is bought
sufficiently far forward to be relevant to investment decisions
 Redesign capacity mechanism in order to recognize possible
contributions of alternative flexibility means
Electricity Directive
 Article 9 (1) states that TSOs cannot control any electricity supply or
generation activities. In general this article is interpreted as a prohibition
for TSOs to control electricity storage.
 But there are different views. For example ENTSO-E in the last TYNDP: “In
terms of regulatory issues, open questions are related to which players …
shall own and manage storage facilities”
 Legal uncertainty is created by the lack of an official definition for
electricity storage, which is treated as a generation facility. The uncertainty
does not help electricity storage to progress in a clear framework. Article
9(1) should be officially clarified regarding its applicability to storage
Electricity Directive
 The first step should be to include a clear definition of electricity storage
in the Electricity Directive. This could be done in cooperation with all
relevant actors like EASE, to ensure that the relevant aspects of the
different technologies are covered.
 Secondly, it should be decided if and how to include electricity storage in
Article 9 (1) of the Electricity Directive. We recommend that all actors are
involved in a dialogue to propose an approach that fulfils the following
conditions:
 Ensure the functioning of an open , fair and transparent market, by
introducing restrictions to the use of storage by system operators if
and when they are allowed some kind of control over them
 Facilitate the market selection of the most efficient solution when a
decision has to be taken for transmission vs. storage
Energy Infrastructure
Package and PCIs
Documents considered
 Blueprint for an integrated European energy network - COM(2010) 677
 Guidelines for trans-European energy infrastructure - COM(2011) 658
 Establishing the Connecting Europe Facility - COM(2011) 665
 The Ten Year Network Development Plan (TYNDP)
 The list of “Projects of Common Interest” (PCIs)
Energy Infrastructure
Package and PCIs
 The provision of the infrastructure package to provide financial support for
electricity storage projects could help in the timely development of
storage infrastructure, as they are unviable in the current market.
 However, the explicit exemption of PHES is controversial, as it is a
technology ready for deployment. The exemption of PHES from the
financing provision should be re-evaluated
 Storage projects do not seem to feature in the TYNDP – possibly as a result
of the unbundling principle. The possibility to include in the PCI list
projects not foreseen in the TYNDP should be maintained.
 The evaluation method of the proposed electricity storage projects
should be reviewed to ensure that it is fair and in equal terms with the
transmission projects, since the market cannot indicate the most efficient
solution between regulated and non-regulated actors.
Grid Fees
 Common rules should be applied across the EU regarding transmission
access fees and use of system fees for electricity storage systems,
promoting deployment of storage according to needs rather than
favourable rules
 Access fees should be calculated with a method that will take into
account the real impact of the electricity storage system on the grid.
Electricity storage facilities can choose when to absorb electricity from the
grid and when to feed it back. In most cases they are operated for
balancing so they are not contributing to congestion problems, but are
actually relieving them.
Environmental Issues
Documents considered
 Water Framework Directive (Directive 2000/60/EC)
 Habitat Directive (Directive 92/43/EEC)
 Birds Directive (Directive 2009/147/EC)
 SEA Directive (Directive 2001/42/EC)
 EIA Directive (Directive 2011/92/EEC)
Environmental Issues
1. Establish a need for bulk EST – create policy
2. Develop Plans and Programmes for Bulk EST
3. Identify viable sites at Strategic Level
4. Develop clear guidelines and document best practice
5. Facilitate planning and approval procedures
Policy
Plans
Programmes
Projects
Energy storage needs
ame 001  29 Jan 2013 
Frame 001  29 Jan 2013 
200
45
75
200
180
35
180
160
55
80
80
50
40
35
25
20
1
2
75
70
25
40
60
40
45
3
80
4
5
6
7
8
Pumped storage power (GW)
25
40
30
40
65
100
35
60
120
20
100
30
120
140
45
60
Storage capacity (GWh)
140
45
Storage capacity (GWh)
160
9
10
20
1
2
3
20
15
4
5
6
7
8
Pumped storage power (GW)
Example: Results for Greece – 80% RE penetration
10
9
10
Installed pumped storage capacity (MW)
Energy storage needs
7000
(a)
CF = 25%
CF = 30%
CF = 35%
6000
5000
4000
3000
2000
1000
0
15
20
25
30
35
Commissioning year
Example: Results for Greece – 80% RE penetration
40
Thank you
Michael Papapetrou
WIP Renewable Energies
Sylvensteinstr. 2, 81369
Munich, Germany
Phone: +49 89 720 12 712
Email: pmp@wip-munich.de
www.wip-munich.de