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PRESS RELEASE

Free rein for energy storage will lead to affordable energy system

’s Hertogenbosch, 7 October, 2015Energy Storage NL (ESNL), the Dutch platform for energy storage, strongly believes that energy storage can contribute to a reliable, affordable, and sustainable energy supply. To fully exploit the possibilities of energy storage, however, a number of barriers will have to be eliminated. More than 80 companies operating in the field of energy storage participated in an ESNL survey on the most pressing obstacles in the way of applied storage techniques. The survey’s most important findings are:

 

  • Net metering is a distortion of the level playing field for storage behind the meter

The current regulatory framework for net metering of locally generated energy and the so-called “zip code range,” enables consumers to use the grid as a free battery. The costs of compensating shortages and surpluses are passed on to other players in the energy system. This impedes the development and application of cost-effective alternatives, such as energy storage.

ESNL underpins the necessity of creating a more flexible energy system for end users. This could be done by gradually and predictably phasing out current net metering regulations, or by implementing alternative price incentives that influence the behaviour of end users such that those who incur costs, carry the burdens.

 

  • Current regulatory frameworks do not properly define the role of storage

In today’s regulatory frameworks, only two players occur: producers and consumers. Since storage embodies both ends of the spectrum, it is a distinct “asset class” (means in the energy system) that requires customised regulation. Such regulation is a prerequisite, but is currently lacking. As a result, network operators acknowledge the added value of energy storage, but are unable to get a full return on investment because regulatory frameworks prohibit they supply energy. As such, net metering-enabled communal storage in a neighbourhood battery within the “zip code range,” is an example of combining value on several levels. Because returns on investment can only be earned once reliable and future-oriented regulatory frameworks have been implemented, companies are reluctant to invest in storage capacity or services.

ESNL is of the opinion that energy storage systems should be defined as distinct “asset class” in all concerned regulatory frameworks.

 

  • Cost price of energy storage technology remains too high

As has been the case for solar cells, reaching a “market tipping point” may take years. Only once benefits start flowing from economies of scale, storage technologies will become affordable. Thanks to government support for electric transportation, the price of Lithium-ion batteries dropped rapidly, for example. Market pull and standardisation seem the most effective mechanisms to lower a technology’s cost price. Investment in fundamental and applied research remains a vital element as well.

ESNL is of the opinion that at this point in time, the government should first and foremost invest in demonstration and pilot projects. This will help new storage technologies achieve scale, and eliminate “first mover” risks to the largest extent possible. Moreover, the Topsector Energy could actively support technology companies in the implementation of relevant standards – such as IEC 61850 and NEN7125 – to enable quick and cheap inclusion of energy storage in today’s energy supply.

 

  • Long-term vision essential for leadership

Energy storage is a rapidly growing, global market. The Netherlands could benefit if it takes the right decisions and becomes a “world class” player in a number of areas. For example, the Netherlands is particularly strong in the fields of heat storage, storage battery management software, and system integration. These positions can be consolidated under the auspices of focused policies that properly align innovation, home market, and exports.

ESNL is of the opinion that there is room for improved coordination between the market, institutional frameworks, and innovation. A national plan of action for energy storage will facilitate the appropriate directional actions if all players commit to its implementation. ENSL will draft a plan of action, and calls on the government to support such a plan.

 

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Notes to the editor:

Additional information about the survey and ESNL can be requested via:

FME / Energy Storage NL

Hans van der Spek

Programme Director CleanTech

Phone: +31 (0) 79 35 31 22 0 / +31 (0) 6 54 25 39 91

[email protected]

Or visit the website of Energy Storage NL:

www.energystoragenl.nl

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