The Energy Storage Report 2024

Now available to download, covering deployments, technology, policy and finance in the energy storage market

REPowerEU is a major step forward in the drive for a sustainable energy system

By Patrick McClughan, Chief Strategy Officer, Corre Energy

If Europe is to meet its goals on decarbonisation and gaining independence from Russian imports of fossil fuels, it will need energy storage and lots of it. Some have regarded the European Union’s ambitions on energy storage as lagging behind its commitments on supporting wind, solar, hydrogen and natural gas. However, there’s a lot to like about the REPowerEU plan, argues Patrick McClughan, Chief Strategy Officer at Corre Energy, a company developing large-scale compressed air energy storage for long-duration applications.

Energy is in the news in a way it has never been before. Events in Europe have exacerbated an already strained energy situation, with worries about security of supply, spiralling costs and the sheer technological and infrastructural complexity of reaching renewable energy targets now front and centre in the minds of politicians, economists and the public.

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Throughout Europe, as country after country signed up to producing at least 70% of their energy from sustainable sources, energy policy makers and regulators, suppliers and consumers have been grappling with a new energy reality.

Costs are rising, security of supply is in question, and there’s a technological revolution required to ensure that renewables can be integrated at scale and that their intermittency can be addressed.

Renewable energy – whether from wind, solar or other – is the chosen form of generation to make the transition work but its impact is curtailed by its supply variability. When the wind blows and the sun shines, supply of renewables soars and can easily meet domestic demand.

However, during periods of low wind and little to no sun, renewable energy supply tails off sharply and fossil fuel generation is called upon to meet customer demand.

We’re being wasteful with energy. We switch off solar parks and wind turbines when there is excess production, but we use fossil fuel generation to balance the peak demand for electricity and as system operators integrate more renewables, they experience more balancing issues.

It’s difficult to guarantee supply when the method of generating power can be intermittent and as a result, 2022 is now being referred to as a ‘breakout year’ for energy storage. That ‘breakout’ recently came to fruition with the publication of the REPowerEU plan.

The REPowerEU strategy is aimed at boosting green energy, reducing reliance on fossil fuels and gas imports, and cutting energy use — the latter goals feeding into the EU’s long-term ambition to become climate neutral by 2050.

The final REPowerEU plan marks a material positive shift in the public policy and regulatory environment, providing increased certainty for markets and a more supportive operating environment for project development, financing and operation of electricity storage solutions.

It’s a major leap forward for the energy storage sector given the EU’s encouragement that Member States should consider electricity storage assets as being ‘in the overriding public interest and facilitate permitting for their deployment’.

Compressed air: a perfect pairing for renewables or hydrogen

One technology solution that can help answer the EU’s critical need for storage is compressed air, particularly when paired with renewables or hydrogen. Long-duration energy storage (LDES) projects and products, accelerate the transition to net zero and enhancing the security and flexibility of energy systems.

LDES is generally defined as any technology which can output stored energy at full capacity for longer than four hours. However compressed air energy storage schemes can provide hundreds of megawatts for over 84 hours as we time shift renewables to avoid grid congestion and provide a range of grid services such as inertia, fast frequency and black start to grid operators who are experiencing a deficit of zero carbon synchronous generation across Europe.

LDES solutions — some of which can store energy for weeks or months — are now officially seen as essential to decarbonisation.

Compressed air energy storage (CAES) is a cost-effective solution using proven technology which offers to balance supply and demand. Electricity produced by wind turbines or solar panels is stored in underground salt caverns in the form of compressed air or green hydrogen for up to 84 hours.

At times of peak supply, Corre Energy’s fleet will integrate gigawatts of renewables onto grids by returning some of the highest discharge and energy storage capacity outputs of all the key storage technologies for use at times of low supply.

There is a strong overall interest from utilities and multinational energy companies for long term offtake agreements, and the expectation is that interest will intensify following the announcement of the final REPowerEU plan.

As an anchor member of the LDES Council, Corre Energy welcomed the recent study carried out by McKinsey, ‘Net zero power: Long duration energy storage for a renewable grid’. The study highlights how between 25GW and 35GW of LDES will be installed globally worldwide by 2025, amounting to about 1TWh of energy capacity and US$50 billion of investment.

The study finds that the lowest cost pathway to net zero power will be by deploying LDES technology. The report sums up the importance of LDES going forward very succinctly: “Short-term funding can also be seen as a long-term investment that will pay off in the form of a lower-cost power system and a de-risked energy transition.”

Clearly, the EU agrees.

Corre Energy sees REPowerEU as an implicit endorsement of the company’s strategy to help future-proof energy systems in the EU.

As a direct result of REPowerEU announcements, the company will accelerate and expand our portfolio’s ambition to have at least 8 projects operational by 2030, with four to five more in construction or development so that we are optimally positioned to meet rising customer demand. Our strategic partnerships with Geostock and Siemens Energy will play a critical role in delivering these ambitious targets.

About the Author

Patrick McClughan is chief strategy officer at Corre Energy, a developer of long-duration energy storage projects and products, headquartered in the Netherlands. McClughan has previously held senior management roles with a focus on development, project financing, strategic advisory and fund management at groups including Irish transmission system operator EirGrid.

7 August 2024
12pm (AEST)
Join and energy storage market experts at GridBeyond for a discussion on the evolving landscape for energy storage in Australia’s National Electricity Market, and the challenges faced in optimising the value of battery assets in an evolving market.

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