* By 2030, the volume of battery-based energy storage in Germany is expected
to increase fortyfold reaching 57 GWh with a connected capacity of 15 GW.
* Battery storage can generate EUR12 billion in added economic value and reduce

    the cost of electricity for end-customers.
  * With the deployment of storage, Germany can avoid the need to build an
    additional 9 GW of new gas-fired power plants by 2030, reducing CO(2)
    emissions by up to 6.2 million tonnes in 2030.

ERLANGEN, Germany, Jan. 09, 2024 (GLOBE NEWSWIRE) -- A study by Frontier
Economics (https://www.frontier-economics.com/uk/en/home/) - commissioned by
Fluence (https://fluenceenergy.com/), BayWa r.e., ECO STOR, enspired, and Kyon
Energy - provides valuable insights for advancing the energy transition in
Germany. The new analysis underlines the pressing need for the electricity
storage strategy recently put forth by the Federal Ministry of Economics and
urges its prompt completion and implementation.
Storage is crucial to the advancement of the energy transition.
The recognition of energy storage's role in power systems will increase
significantly in the coming years. The analyses conducted by Frontier Economics
show that the capacity of storage deployed in Germany will rise to 15 GW / 57
GWh by 2030, if a supportive policy framework is in place. This means a forty-
fold increase compared to today.
By 2050, the capacity of large-scale battery-based storage systems in Germany
can reach 60 GW / 271 GWh. This increase is driven by the growing demand for
flexibility services in the electricity system and falling costs of storage.
Dr. Christoph Gatzen, Director at Frontier Economics, sees the study results as
clear indicators for the future role of storage in Germany: "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 deployment of storage is expected to follow a growth trajectory similar to
the one photovoltaic (PV) technologyexperienced in recent years, both in terms
of cost degression and the expansion rate. However, the deployment of storage is
purely market-driven, as new projects can be built and operated economically
without government funding.
Storage has the potential to generate at least EUR12 billion in added economic
value.
Frontier Economics estimates that using storage to shift the availability of
electricity from times of surplus generation to times of electricity shortages
can generate a (macro)economic value of around EUR12 billion by 2050. This value
is estimated based on the savings from the wholesale markets alone and will
increase further when additional benefits of storage, such as system services,
decreased CO(2) emissions, and participation in intraday markets, are taken into
consideration.
According to the study, the deployment of large-scale storage systems in Germany
has the potential to limit CO(2) emissions by 6.2 million tonnes by 2030 and by
approx. 7.9 million tonnes in 2040 compared to an electricity system which uses
gas-fired power plants instead of storage.
Furthermore, storage participation in the wholesale market will lower wholesale
electricity price by EUR1/MWh on average between 2030 and 2050 compared to a
scenario where no energy storage is built. If no energy storage is built and the
missing capacity is not replaced by additional new gas plants, the wholesale
prices would rise by 4EUR/MWh.
Storage can significantly reduce the need for investment in gas-fired power
plants.
The forecasted deployment of energy storage systems will further ease pressure
to invest in new gas fired power plants. According to the study, Germany needs
to develop approx. 26 GW of new gas-fired power plants by 2030. However, without
the deployment of storage as forecasted in the model, additional 9 GW of new gas
power plants will be needed.
The modelling by Frontier Economics concluded that although storage cannot
replace the construction of gas power plants entirely, it will reduce
significantly the investment required compared to an increased build out and
operation by 2030.
Considering the current budget crisis and the shortage of financing required for
hydrogen-ready gas power plants, Dr. Christoph Gatzen stated:
"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."
Industry expectations from policymakers
The initiators of Frontier Economics' study call on policymakers to ensure
investment security for the development of new large-scale battery-based energy
storage systems.
Bureaucratic and regulatory barriers in Germany, such as complex approval
processes for new storage projects, should be reduced. All markets for energy
trading, capacity, and ancillary services should be market-based and open to all
technologies, including storage.
The Federal Government should meet the requirements set by the European
Commission in the current reform of the European Electricity Market and set
indicative storage targets for Germany as quickly as possible. Building on this,
the Federal Government should present an expansion strategy for energy storage
in Germany. With the recent publication of the electricity storage strategy, the
Federal Government has taken the first step that must now be translated into
concrete legislative proposals without delay.
About the study
The study on the value of large-scale battery-based energy storage in the power
system in Germany(1) was developed by Frontier Economics and commissioned by
Fluence Energy GmbH, BayWa r.e. AG, ECO STOR GmbH, enspired GmbH and Kyon Energy
Solutions GmbH. The study used the modelling of the European Electricity Market
with Frontier's Combined Investment and Dispatch Model in three different
scenarios: (1) a reference modelling in which the endogenous expansion of
batteries and gas-fired power plant is implemented in the model, and two
simulation variants in which the expansion of energy storage is not possible in
Germany, and the capacity replacement of missing energy storage by the
endogenous expansion of gas-fired power plant is permitted (2) or not permitted
(3).
About Frontier Economics
Frontier Economics is a microeconomic consulting firm that provides economic
advice to public and private sector clients on competition policy, public
policy, regulation, business strategy, behavioral economics, and energy and
climate change. The Frontier Economics network consists of separate companies
based in Europe (Berlin, Brussels, Cologne, Dublin, London, Madrid and Paris) as
well as Australia (Melbourne, Sydney and Brisbane) and Singapore.
About Fluence
Fluence Energy, Inc. (Nasdaq: FLNC) is a global market leader in energy storage
products and services, and optimization software for renewables and storage.
With a presence in 47 markets globally, Fluence provides an ecosystem of
offerings to drive the clean energy transition, including modular, scalable
energy storage products, comprehensive service offerings, and the Fluence IQ
Platform, which delivers AI-enabled SaaS products for managing and optimizing
renewables and storage from any provider. The Company is transforming the way we
power our world by helping customers create more resilient and sustainable
electric grids.
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Fluence
Joanna Spirodek
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Tel.: +49 172 8662155
E-mail: joanna.spirodek@fluenceenergy.com
(mailto:joanna.spirodek@fluenceenergy.com)
(_________________________________________________
1) 'Wert von Großbatteriespeichern im Stromsystem in Deutschen Stromsystem'
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