Energy storage could save taxpayers in Germany some €3 billion (US$3.3 billion) in subsidies for renewable energy assets by 2037, simply by increasing demand in the wholesale electricity market.
That is according to a new report produced by consultancy Global Experts Energy Consulting (GEEC) for German developer and system integrator Eco Stor.
The nearly 50GW of battery storage that could be online by 2037 will increase the wholesale market revenues for wind and solar assets and thereby reduce the amount of subsidies payed to those assets out of general taxation through the EEG (Erneuerbare-Energien-Gesetz/Renewable Energy Sources Act) scheme, which is similar to the UK’s contracts for difference (CfD).
The EEG scheme guarantees renewable energy assets a minimum price for their power, currently around 6-8 euro cents per kWh. If the wholesale electricity market price ends up being lower, the difference is covered from general taxation, and the amount paid will be over €10 billion 2024 according to Germany’s transmission system operators (TSOs).
By increasing demand during settling periods in wholesale electricity market trading, energy storage will increase the prices that renewable energy assets like wind and solar receive for their power, reducing the gap between that price and the EEG minimum price, Eco Stor managing director Georg Gallmetzer explained.
“If you have 50GW of batteries in the market by 2037 as forecasted that will impact the price, and that will mean the EEG account is better filled as the gap becomes smaller,” Gallmetzer said.
The residential and commercial energy storage market in Germany is Europe’s leading by some way, thanks to subsidies for small-scale solar installations driving demand for energy storage to increase self-consumption.
In the past fortnight developer Kyon Energy claimed the “largest approved” battery storage project in Europe while German lawmakers extended an exemption for grid fees for battery storage systems coming online by three years, to 2029.