New Study Shows Energy Transition Gains Momentum with the Acceleration of Battery Storage

A study commissioned by Frontier Economics by Fluence, BayWa r.e., ECO STOR, enspired, and Kyon Energy offers crucial insights to propel Germany’s energy transition. The analysis highlights the urgency of completing and implementing the electricity storage strategy outlined by the Federal Ministry of Economics.

The study shows Germany’s deployed storage capacity is projected to reach 15 GW / 57 GWh by 2030, signifying a forty-fold increase from the current capacity. Looking ahead to 2050, the capacity of large-scale battery-based storage systems in Germany could potentially reach 60 GW / 271 GWh, propelled by escalating demand for flexibility services and declining storage costs.

Speaking about the study, Dr. Christoph Gatzen, Director at Frontier Economics, said, “Large-scale battery storage is critical for the energy transition in Germany. Without the flexibility provided by storage, the country will face higher economic costs caused by increasing gas imports and expensive curtailment of renewable generation.”

The implementation of large-scale storage systems in Germany could potentially reduce CO2 emissions by approximately 6.2 million tonnes by 2030 and around 7.9 million tonnes by 2040, compared to an electricity system relying on gas-fired power plants rather than storage.

Moreover, active participation of storage in the wholesale market is projected to decrease average wholesale electricity prices by €1/MWh between 2030 and 2050, in contrast to a scenario without energy storage. In the absence of energy storage and without replacement by additional gas plants, wholesale prices could see a rise of €4/MWh.

Dr. Christoph Gatzen further added, “Grid-scale storage systems can be built without government funding and can reduce the need for construction of new hydrogen-ready gas power plants as well as their fuel usage. Ensuring investment security for storage and green generation assets through the introduction of a clear and reliable regulatory framework should be a priority for policymakers. We expect the demand for electricity and peak load requirements in Germany to increase significantly in the coming years. There is an urgent need for new large-scale storage systems and other generation assets in addition to the expansion of renewable energies for ensuring security of supply.”