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CEOs and business leaders call for “urgent rethink” on EU energy systems

The demand comes in a letter penned by the chief executives of 10 European businesses and organisations

By: EBR - Posted: Thursday, July 14, 2022

In their letter, the CEOs and business leaders say that the “current geopolitical situation across the continent, combined with high dependency on imported natural gas, growing electricity demand, and consequently, higher bills for households and businesses, create an urgent need to rethink the structure of European energy systems.”
In their letter, the CEOs and business leaders say that the “current geopolitical situation across the continent, combined with high dependency on imported natural gas, growing electricity demand, and consequently, higher bills for households and businesses, create an urgent need to rethink the structure of European energy systems.”

by Martin Banks

The demand comes in a letter penned by the CEOs and business leaders of 10 European organisations (Fluence Energy GmBH, Gore Street Capital, Gresham House, MW Storage, Zenobe, AEPIBAL, BVES, Energy Storage Ireland, Fraunhofer Institute for Solar Energy Systems and Karslruhe Institute of Technology) that operate in the renewable energy sector in response to the EU’s REPowerEU Plan.

The EU plan aims to boost the EU’s energy-efficiency goals, requiring member states to reduce energy consumption by at least 13% from projections made in 2020 versus the current 9%. The €195 billion plan also aims to end dependency on Russian fossil fuels by 2027. The letter is for EU and national policymakers and all stakeholders in the energy markets.

In their letter, the CEOs and business leaders say that the “current geopolitical situation across the continent, combined with high dependency on imported natural gas, growing electricity demand, and consequently, higher bills for households and businesses, create an urgent need to rethink the structure of European energy systems.” The REPowerEU Plan, published in May by the European Commission, aims to increase the security of energy supply by building and connecting more renewable generation to the grid.

The letter warns, “However, for this plan to be successful, it must be accompanied by adequate targets and policy frameworks for the deployment of energy storage and other flexibility technologies.“They are necessary to enable the safe and efficient integration of renewables into the electric grid, and now is the time to recognise them as the pillars of the European energy transition.” The signatories say the “welcome” the REPowerEU Plan, its ambitious renewable targets, and the “recognition of the role of energy storage in delivering sustainable and reliable energy supply.”

“At the same time, we believe that if the accelerated near-term deployment of renewable energy sources is to be successful, Europe needs a rapid rollout of proven and scalable technologies to increase grid flexibility and enable the safe and efficient integration of renewable generation,” it adds. “To this end, battery-based energy storage is a quickly deployed, cost-effective, and low emissions solution with the potential to become a backbone of modern, resilient, and decarbonised energy systems.” Other technologies as well as interconnectivity between national electricity markets, “are all critical” to enabling the European energy transition.

The CEOs and business leaders state, “Thanks to its unique characteristics – speed of response, flexibility, and reliability – battery-based energy storage and other fast-acting technologies are perfectly positioned to reduce the overall electricity cost for businesses and residential energy users in multiple ways.“Battery-based energy storage can enhance network stability and ease congestion on transmission lines, reducing renewable curtailment and the significant costs associated with it. “It can provide capacity and ancillary services that balance supply and demand, often more efficient and cheaper than other technologies,” according to the company bosses.

The argue this could “limit price volatility” but the letter goes on, “but despite having access to this ready-to-deploy and cost-effective technology, we continue to rely on high-emission natural gas-based generation.” In 2021, capacity market auctions across Europe awarded approximately 2.4 GW of contracts to energy storage, but, say the CEOs, “various studies predict that to increase the security and reliability of energy systems on the continent, we will need up to 200 GW of energy storage by 2030.”

The letter says, “Energy prices should be low at times of high renewable generation, and higher during periods of low generation.“Existing barriers to storage in national markets, such as charging of fees, levies or taxes that are not cost-reflective and disadvantage storage technologies, or restrictions to market participation must be removed in line with existing European legislation.”

The CEOs and business leaders say they “look forward to working together with the regulators and other market stakeholders, realising the goals outlined in the RePowerEU Plan.”

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