Power Storage Can Secure Energy Transition in the Long Term

The power-generation capacities of wind and photovoltaic plants vary according to the weather, time of day, and season. The expansion of renewable energy sources means there is a growing need to offset these fluctuations and bring power supply into line with demand at all times. Power storage can contribute to this and thus safeguard the energy transition in the longer term. An analysis conducted by the German Institute for Economic Research (DIW Berlin) shows that storage requirements may increase sharply if the share of renewables becomes very high. “Particularly if other flexibility options, for instance, concerning the demand-side, develop less favorably than anticipated, additional power storage might be necessary,” says DIW energy expert Wolf-Peter Schill. “Consequently, broad-based funding for research and development of power storage continues to be a logical course of action in order to secure the energy transition.”

According to German government targets, renewable energy sources should account for at least 80 percent of the total electricity consumption in Germany by 2050. While flexibility requirements rise with the share of renewables, at the same time, there is a drop in the capacities of dispatchable fossil-fuel power plants and thus existing options for balancing. This may lead to power storage becoming more important. The question of exactly what power storage capacities Germany will need in future heavily depends on the context, however. Not only does the share of renewable energy play a major role here but also the availability and cost of other options which  have a similar effect on the electricity supply to power storage, for instance, demand-side measures, flexible power generation from biomass or natural gas, the flexible use of electricity in other fields, or international exchanges of electricity.

At present, pumped hydro storage facilities with a capacity of around nine gigawatts which contribute to balancing out power supply and demand as well as supplying control reserves are directly connected to the German transmission grid. From the perspective of the overall power system, the further expansion of renewable energy sources is possible in the short to medium term without substantial growth in the capacity of power storage facilities. Longer-term analyses by DIW experts Wolf-Peter Schill, Jochen Diekmann, and Alexander Zerrahn clearly point out that power storage requirements may increase sharply with very high shares of renewables. “The evaluation of the power storage requirement essentially depends on various factors whose development from a present-day perspective are subject to significant uncertainties,” says Schill. “Policy-makers should work toward technology advances and cost reductions in power storage through broad-based funding of research and development,” adds Diekmann. “Fair competition of all flexibility options in various market segments should also be made possible.”