In order to unlock the synergies between solar and storage, regulatory adjustments are a must. Three European lobby associations have at the beginning of April 2016 published a policy paper, explaining what's exactly needed to make that happen. Mainly authored by SolarPower Europe – with the support of the the European Heat Pump Association (EHPA) and the Association of European Automotive and Industrial Battery Manufacturers (EUROBAT), the paper suggests 6 regulatory measures:
1. What is storage
First and foremost, the European Union (EU) needs to have a common legal EU definition of storage. The association say, that a commonly agreed legal definition is needed to clarify its position with regard to the unbundling regime, specify the ownership structure and focus on regulatory aspects for the development of the storage facility.
2. Self-Consumption
The associations point out, that any barriers to self-consumption, such as specific additional taxes or levies, will hinder the development of decentralized storage. This can be seen in Spain, where legislation made self consumption and the use of storage basically impossible; but also in Germany a levy on self-consumed solar power for systems larger 10 kW stopped the commercial market to take off. The associations ask for "an appropriate and cost-efficient framework for renewable self-consumption to be developed in the upcoming new Renewable Energy Directive."
3. Value all dimensions of storage
According to the associations, electricity markets should better remunerate flexible assets and reflect scarcity. Moreover, energy policies need to make sure that services provided by storage and solar to DSOs and TSOs are properly recognized and paid for.
4. Holistic strategy for electricity, heating and cooling, and transport sectors
The association emphasize that bridging electricity and thermal grids via storage of surplus electricity in the form of heat (heat pumps, hybrid heat pumps or thermal storage) need to be considered in any strategy, as the thermal storage potential is already widely available and require little extra effort to be used. Therefore, the European Commission should make sure "a regulatory prolongation in the building and product-related European legislation" takes place and that the upcoming communication on decarbonisation of transport needs to "highlight the role that solar and storage can play in supporting e-mobility (BEV, all classes of hybrid vehicles and FCEV)."
5. Promote R&D
It would be important that the European Commission's Strategic Technology Energy Plan (SET) "supports a system perspective promoting the integration of storage solutions, solar technologies and controls into buildings, communities and industrial processes to further reduce their costs and accompany them down their learning curves." More research and development programs in the space need to be continued and encouraged to find ways to further reduce load on the grid. More energy storage technologies would mean a job creation for high-tech R&D and production talent.
6. Yes to market introduction programs
While renewable energy associations have been rather shy asking for incentives in Europe in recent years, these 3 lobby groups cautiously push for state support for storage. The "introduction of temporary market programmes with a digressive design can help in accelerating cost reduction for energy storage," they say. And they give a good example, pointing to the KFW program in Germany, which has helped to create a strong battery-storage market in Europe, in particular Germany. Because finally energy storage technologies offer great potential for creating high-tech R&D and production jobs in Europe – and while Japan, China, Korea and the US are very supportive, most European governments have been very hesitant in the field of storage so far.
Solar & Storage – the perfect partners
Building the case for storage in the context of solar energy, the paper says by 2020, solar power is expected to cover up to 8% of the total power demand in Europe, increasing to 15% by 2030, reducing the need for residual electricity generation through the day. Night time is when power demand will be high in the absence of sun. This makes it imperative to have flexible options to ensure release the pressure on the grid. Storage is one such option as it allows to respond quickly by balancing excess solar generation at peak times. It says this will make the energy system more cost-effective, and will also have a balancing effect on prices throughout the day.
The position paper says solar combined with storage act as a bridging technology which can empower consumers as it helps bring down electricity bills. Batteries can provide backup power during power outage period as well, which will greatly benefit low voltage grids. The consumers can benefit if a premium tariff for the fed-in power is offered, which makes it a win-win situation for all.
2 Key Benefits
In summary, the associations say that it is about 2 key benefits storage can provide – once for the system, and on the other hand for the consumer:
A. System support: "Storage technologies allow for the best use of zero marginal cost solar electricity when it is available," the position paper points out. "Hence storage can help the overall energy system to be more cost-effective."
B. And with regard to the consumer, "solar and storage are mutually reinforcing. The fast cost decrease of solar systems means that more consumers will be able to invest in storage capacities, which in turn will increase the ratio of self-consumption and brings concrete economic benefits to the consumers," the associations say. In addition, "Storage solutions also unlock demand side flexibility which help safely operate our grids."
The Solar & Storage Position Paper can be downloaded at the SolarPower Europe website.