Munich, Bavaria. Together with Fluence, Fraunhofer ISE, Vattenfall and a total of 24 of the leading companies and organizations in the energy and battery storage market in Europe, Kyon Energy is committed to the recognition of flexible energy storage technologies as a pillar of the European energy transition. As supporters of the RepowerEU Plan, they welcome the ambitious goals of increasing energy security by expanding and connecting more renewable energy sources to the grid. At the same time, they are calling for the urgently needed political framework for the use of energy storage systems, which are needed to successfully implement European plans.
Kyon Energy is looking forward to working with regulators and other market players to achieve the goals outlined in the RepowerEU Plan.
The current geopolitical situation on the entire European continent, combined with a high dependence on imported natural gas, growing demand for electricity and, as a result, higher bills for households and companies, make it urgently necessary to rethink the structure of European energy systems.
The RepowerEU plan* published by the European Commission in May aims to increase energy security by expanding and connecting more renewable energy sources to the grid. However, for this plan to be successful, it must be accompanied by appropriate goals and policy frameworks for the use of energy storage and other flexibility-enhancing technologies. They are necessary to enable the safe and efficient integration of renewable energy into the power grid. It is therefore time to recognize them as the pillars of the European energy transition.
The Signatories to this letter, organizations with decades of experience in creating and supporting global and European energy markets, welcome the RepowerEU Plan, its ambitious renewable energy goals, and recognition of the role of energy storage in providing sustainable and reliable energy supply.
At the same time, we believe that if the accelerated short-term deployment of renewable energy sources is to be successful, Europe needs a rapid introduction of proven and scalable technologies to increase grid flexibility and enable the safe and efficient integration of renewable energy sources. For this purpose, battery-based energy storage is a rapidly deployable, cost-effective and low-emission solution with the potential to become a backbone of modern, resilient and decarbonized energy systems. Other technologies such as “demand-side response,” the improved use of existing storage potential of pumped storage power plants and other energy storage technologies, and the networking of national electricity markets are all crucial to make the European energy transition possible.
Thanks to their unique features — speed of response, flexibility, and reliability — battery-based energy storage and other fast-acting technologies are perfectly positioned to reduce overall electricity costs for businesses and private energy consumers in a variety of ways. Battery-based energy storage can improve grid stability and reduce congestion on transmission lines, reducing the restriction of renewable energy and the associated significant costs. It can provide capacity and additional services that balance supply and demand — often more efficiently and cheaply than other technologies. This can also limit price volatility and thus total electricity costs on wholesale energy markets through energy arbitrage.
In Markets Around the World, Energy Storage Technologies have proven their ability to replace thermal power plants as a more economical and low-carbon way to provide a secure supply of energy during periods of peak demand and low levels of renewable generation. But although we have access to this ready-to-use and cost-effective technology, we continue to focus on high-emission natural gas-based power generation, while Europe-wide goals for the strategic expansion of energy storage projects still need to be developed and enshrined in law. In 2021, around 2.4 GW of energy storage contracts were awarded at capacity market auctions across Europe. However, various studies predict that we will need up to 200 GW of energy storage by 2030 to increase the safety and reliability of the continent's energy systems. Further changes to the structure and design of the energy market are also needed to achieve RepowerEU's goals.
In addition, the energy market should be designed in such a way that producers and customers receive clear price signals at all times in line with system requirements. Energy prices should be low during periods of high renewable production and higher during periods of low production. Similarly, the costs of using the network should be higher when it is congested by providing price signals for local generation and consumption that help reduce network congestion.
We look forward to working with regulators and other market players to achieve the goals outlined in the RepowerEU Plan by providing technologies, solutions and policy frameworks that ensure affordable, reliable and sustainable energy systems for European consumers.
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*The European Commission's RepowerEU Plan was first communicated in March and published on May 18. It includes raising the target of energy generated from renewable sources to 45% by 2030, up from 40% compared to last year's targets. This would bring renewable energy generation in Europe to 1.236 GW by 2030, including the installation of 320 GW of solar energy by 2025.
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