Large-scale battery storage: Why your expansion determines the success of the energy transition

4 mins

The fact that renewable energy forms the center of the future energy system is nothing new anymore. Germany has set itself major expansion goals to achieve climate neutrality by 2045. What is less well known is that in order to achieve the energy transition, enormous storage capacities are required in addition to renewable generation. But why does your expansion actually determine the success of the energy transition?

Transforming the energy system

Transforming the energy system is an essential part of national and global efforts to combat climate change and secure a sustainable future.

In the past, a central energy system dominated, in which large power plants generated electricity and transported it over long distances to consumers. Today, we see a significant development towards decentralized energy generation, in which electricity is generated and used locally. This not only increases the efficiency of the energy system, but also strengthens resilience against disruptions.

At the same time, there is a shift from conventional, fossil fuels to renewable energies. While coal, oil and gas were the main sources of energy production for decades, wind, solar, biomass and other renewable energy sources are becoming increasingly important. This change is necessary to reduce greenhouse gas emissions and achieve climate goals.

As a result of the decentralization of the electricity system, rural areas in Germany are playing an increasingly important role, as it provides the necessary resources and land for the expansion of renewable energies and is therefore a central driver of the energy transition. The new form of use increases the value of the land, as it was previously of no interest for energy generation plants.

Open markets and decentralized structures offer the liberal electricity system many advantages. However, the energy transition also poses significant challenges. The renewable energy sources that Germany relies on are not consistently flexible, available nationwide or independent of time and weather. So how do you deal with these challenges?

Large-scale battery storage for more flexibility in the grid

The expansion of renewable generation plants is in full swing. In the first quarter of 2024, electricity generation from renewable energy sources rose to a new record high: Almost 60% of electricity generation (58.4 percent of 121.5 billion kilowatt hours to be exact) comes from sustainable sources. In order to effectively offset the associated volatility, the power grid must be able to react much more flexibly to fluctuating production from renewable energy sources in the future. For this purpose, energy storage systems mustbecome an integral part of the grid of all types.

Large-scale battery storage systems play a decisive and indispensable role in making power grids more flexible. One of the most important aspects is the ability to compensate for availability and balance out volatilities. Renewable energy sources such as wind and solar energy are subject to natural fluctuations as they depend on weather conditions and times of day. Large-scale battery storage systems store energy when production is high and release it when production is low, ensuring the stability of the power grid.

With increasing demand for electricity and increasing electricity production from renewable energy sources, the power grid is becoming ever more burdened. This load can lead to instabilities and, in the worst case, even power outages. Large-scale battery storage systems provide relief here by temporarily storing excess energy and releasing it again when needed. This helps to distribute grid load and smooth out peak loads. This increases the reliability of the power grid.

The integration of renewable energy sources is also another key argument for large battery storage systems. In order to achieve climate goals and reduce dependence on fossil fuels, renewable energy must be seamlessly integrated into the existing power grid. Large-scale battery storage systems enable this integration by balancing the discontinuous nature of wind and solar energy and ensuring that the energy generated can be used efficiently. Through storage options, a total of more renewable energy can be integrated into our power grids.

In addition, large battery storage systems serve as short-term storage systems, which are able to compensate for short-term fluctuations in electricity generation and demand. This is particularly important in order to keep the grid frequency stable and to ensure security of supply. Short-term energy storage can help to cope with sudden load changes and ensure a continuous supply of electricity.

Large-scale battery storage systems are therefore an indispensable element for making power grids more flexible and stabilized. They are the answer to the biggest challenges of the energy transition and take on the following tasks:

  • Security of supply: Battery storage systems store excess power and release it when needed to ensure a continuous supply of energy.
  • Grid stability: By feeding in stored electricity as needed, battery storage systems provide the necessary operating frequency and voltage in the power grid.
  • Grid optimization: Battery storage systems enable a more flexible and balanced power system by offering technical and economic advantages.
  • Price stability: By reducing fluctuations in the electricity market, battery storage systems help balance supply and demand and stabilize electricity prices.

Demand for large battery storage systems is increasing

As renewable energy continues to expand, the need for storage options in the electricity system is also increasing significantly. Germany has set itself the ambitious goal of achieving climate neutrality by 2045. To achieve this goal, storage capacities must be significantly expanded by 2030. The current grid development plan (NEP) 2030 and the prospects for 2037/2045 therefore predict a significant expansion of large battery storage systems in Germany. The transmission system operators emphasize the essential role of battery storage systems in ensuring grid stability and the integration of renewable energies. In the scenarios, 23.7 gigawatts of storage capacity are expected by 2037, and between 45 and 54 gigawatts by 2045. A goal that is still a long way off right now. Germany (as of June 2024) currently has around 1.6 gigawatts of storage capacity installed.

Other studies confirm the need for an even greater expansion of large battery storage systems. According to a market simulation by Frontier Economics, the capacity of large batteries in Germany could rise to 15 gigawatts or 57 gigawatt hours by 2030 — an almost forty-fold increase in current capacity. Fraunhofer ISE even predicts demand of 104 gigawatt hours by 2030. These forecasts underline the urgent need to massively expand the infrastructure for energy storage systems in the coming years.

A first success: The importance of large battery storage systems in the energy transition is receiving increasing political support, and regulatory issues relating to storage are becoming a priority on the agenda for the first time. A development that also resulted in the Federal Government's electricity storage strategy, and which is urgently needed to achieve the goals.

Battery storage to master the energy transition

With the transformation of our energy system towards a climate-neutral power supply, the challenges in the areas of supply security, grid stability and grid optimization are increasing. Large-scale battery storage systems are therefore an indispensable component for the success of the energy transition. They ensure the stability and flexibility of our power grid and enable the efficient integration of renewable energies. Through their ability to store and supply energy as needed, they make a significant contribution to overcoming the challenges of sustainable energy supply. In view of increasing demand and ambitious climate goals, the expansion of large battery storage systems is urgently needed. Only through its comprehensive implementation can the energy transitionbe successfully implemented and a secure, sustainable energy future ensured.

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