According to a leaked draft of its Electrification Action Plan, the European Union (EU) must deploy 200GW of energy storage by 2030 to meet energy system flexibility needs.
The EU is set to publish its long-awaited strategy on electrification this week: the due date was announced as 15 July in advance, though some reports now say it will come out on Friday, 17 July. A public call for evidence for stakeholders was opened in August last year.
An overall electrification target of [X]% by 2040, which will become EU legislation, is not included in the leaked document seen by media, including Energy-Storage.news. However, it sets out the measures the European Commission (EC) will take to advance its aims. The EU’s preceding Clean Industrial Deal and Affordable Energy Action Plan set 30% by 2030 as a reference point.
Those aims include removing five barriers to electrification:
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- Reducing the gap between electricity and fossil fuel costs by adding flexibility to reduce the costs of operating the system, making electricity cheaper and deploying more homegrown clean energy,
- Lowering the upfront costs of electrification for end-users across the industrial sector, transport and buildings.
- Increased access to infrastructure and enhancing the productivity of electricity grids through investment in transmission, EV charging networks, port infrastructure and district heating and cooling.
- Accelerating innovation in electrification solutions, including emerging technologies such as small modular nuclear reactors (SMNRs), hydrogen and carbon capture and storage (CC&S).
- Growing and upskilling electrification technologies workforces and the European manufacturing and supply chain sectors.
Each set of barriers is explained and put into context alongside the measures the EC is proposing to take, for instance, in taxation proposals to improve the electricity-to-gas price ratio and “aggressively phasing out” fossil fuel subsidies in the post-2030 Energy Union package for barrier No.1.
Energy storage as system flexibility tool
The role of energy storage is emphasised in the actions proposed to enhance the flexibility of the electricity network. Enhanced electric system flexibility is a mitigator for the electricity price spikes, negative and zero pricing events.
The EU wants to encourage participation in flexibility markets from customer-sited resources at the household, commercial, and industrial levels, spanning vehicle-to-grid (V2G) technologies up to AI data centres.
“Energy storage is an essential element to optimise the functioning of the EU energy system,” the document adds.
It noted that the recent Tripartite Agreement on Energy Storage from 22 Member State governments, renewable energy and storage developers and industrial electricity consumers pledged a commitment to 30GW to 35GW of energy storage deployment in the years 2026-2028.
However, it then quoted figures from the EU’s Joint Research Centre (JRC) that 200GW of energy storage will be needed to accommodate energy system flexibility needs, almost four times the 55GW projected to be deployed by the end of 2026. This is according to modelling from the JRC’s POTEnCIA (the Policy-Oriented Tool for Energy and Climate Change Impact Assessment) and the JRC highlighted last year that it is currently projecting that less than half the required capacity will be deployed under current conditions.
Recognition of long-duration energy storage welcomed by industry group
EU energy policy expert Carolina Cruz at Energy Storage Europe said in a LinkedIn post that recommendations the trade association has “long advocated for appear in the Commission’s thinking.”
One of those recommendations was for consideration of long-duration energy storage (LDES), which has previously been left out of even the more recent EU electricity system policy documents that have otherwise come to incorporate more mentions of energy storage technologies.
The EC document notes that there are insufficient revenue streams to cover upfront investment in cross-seasonal energy storage. The Commission will organise a high-level conference to discuss barriers and solutions for storage, including LDES and renewable energy power purchase agreements (PPAs) that include energy storage.
Cruz also welcomed the EC seeking to implement the Tripartite Agreement on Energy Storage as a priority for the Energy Union Task Force.
“Delivering on that existing commitment matters more, at this stage, than any new pledge,” Cruz said.
Meanwhile, digital energy specialist and Octopus Energy spin-out, Kraken Technologies, welcomed draft proposals to incentivise the uptake of distributed electrification technologies such as battery storage, EVs, and heat pumps through tax exemptions and other incentive schemes.
Kraken chief marketing and flexibility officer Devrim Celal said that the plan showed “exactly the right ambition.”
“Electrification is now about affordability, resilience and energy sovereignty, not just decarbonisation,” Celal said.
However, Celal and Kraken Technologies advocated for the rollout of distributed energy resources (DERs) to be paired with increased investment in demand-side response to manage peak loads.
“With Europe facing an estimated €584 billion (US$667.74 billion) grid investment challenge by 2030, we need to build, but we also need to use the grid we already have much better. Software can shift electricity usage from EVs, heat pumps, batteries and industrial loads to times when power is cheapest and cleanest, turning new demand into flexible assets rather than grid problems,” Celal said.
Meanwhile, environmental non-profit group Beyond Fossil Fuels called the leaked Electrification Action Plan “a step in the right direction” but said the electrification of buildings, industry and transport must be “paired with a binding target to boost the share of renewables by 2040 and a credible plan to phase out fossil fuels.”
Beyond Fossil Fuels also warned that the current “grid crisis” must be urgently addressed, while the growth of data centres is the metaphorical “elephant in the room” that could disrupt electrification efforts.
“Electrification can only happen if Europe’s power grids are ready to support greater shares of renewables as well as heat pumps and electric vehicle chargers. But right now, €100 billion worth of renewable and battery projects are languishing in distribution grid queues alone in just eight countries,” Beyond Fossil Fuels campaigner Tara Connolly said.
“Without proper reforms, Europe’s energy transition – and electrification – risks stagnating not due to the lack of projects, but because local grids are simply not ready.”
“For the EU to deliver on electrification, it needs to ensure that data centre growth does not throw a spanner in the works,” Jill McArdle, another campaigner with the group, said.
“Accelerating data centre energy demand without credible and robust safeguards will divert electricity and renewable energy away from households, priority industrial sectors, and vehicles that electrification is supposed to serve, leading to higher reliance on fossil gas and to higher electricity costs,” McArdle said, calling for “binding rules, not voluntary commitments.”
You can track the EU Electrification Action Plan’s progress through the Legislative Train Schedule of the European Parliament.
