In 2023, as the cost of photovoltaic storage decreases, the large storage market in Europe will gradually open, and the scale of large-scale energy storage projects will continue to increase. According to Wood Mackenzie**, the cumulative installed capacity of large storage in Europe will reach 42GW 89GWh by 2031, of which the United Kingdom leads the installation of large storage in Europe, which will reach 25 by 203168GWh, it is expected that the British large reserve is expected to exert force in 2024. Factors such as the growth of renewable energy installations and the gradual improvement of the revenue model will further drive the development of large storage in Europe.
Chart: Europe's top 10 grid-scale energy storage market installed capacity***
Driven by rigid demand, the implementation of superimposed electricity reform, and the UK's large savings are poised to go
The UK has a strong incentive to develop large storage with the demand for ensuring power and improving the stability of the power grid. As an island nation, the UK has certain limitations in its power capacity and grid flexibility compared to countries on the European continent.
On the one hand, the continuous withdrawal of coal power has led to a shortage of electricity**, and electricity is dependent on imports. On the other hand, fluctuating renewable energy such as wind power and photovoltaic power has an impact on the power grid, which greatly increases the balance cost of the British power system, and the UK can only be forced to purchase balanced electricity from France, Belgium and other countries during some congestion periods.
Chart: New energy storage capacity in the UK in 2024**.
On July 19, 2023, the European Parliament officially approved the electricity market design reform plan, which will encourage the grid to introduce more non-fossil fuel flexible resources (such as energy storage, demand-side response), and provide them with a reasonable return on investment through capacity markets, emphasizing the important role of new energy storage in building a reliable energy system from the top-level architecture level.
Under the demand of carbon neutrality, increasing power capacity, and improving the stability of the power grid, the UK needs to continue to promote the construction of a large storage system while vigorously developing renewable energy, so as to provide sufficient support for the large-scale integration of renewable energy into the power system.
The business model is mature and the revenue mechanism is abundant
The mature business model has led to a steady increase in the UK's energy storage capacity. According to Modo statistics, the cumulative installed capacity of the UK's large reserves has been 001GW grew to 1. at the end of 202293GW, by the end of 2026, the cumulative installed capacity of the UK's local large reserves is expected to reach 13GW, and the average annual new installed capacity in the next four years will not be less than 277GW, conservatively according to the 2h distribution and storage time, the annual new installed capacity will not be less than 55gwh。
Chart: The UK's installed energy storage capacity continues to grow.
With the formation of a policy-driven market mechanism, the current relatively liberalized UK electricity market has laid the foundation for a rich revenue mechanism for energy storage in the UK.
The UK has a rich revenue mechanism for energy storage power stations, from the relatively high-value frequency modulation service market and backup market to the low-value energy market, and there are more than 10 kinds of benefits that can be obtained by energy storage. Large storage projects can participate in the capacity market, electricity market, balanced backup and frequency modulation auxiliary service market, and obtain more ideal returns through revenue superposition.
The project reserve is perfect, and the UK leads the European large storage market
At present, the decline in the cost of energy storage systems has further reduced the construction cost of energy storage power stations in the UK, which is expected to further improve the economy of large storage. From the perspective of Europe as a whole, Europe took the lead in proposing the 2050 carbon neutrality goal, and the energy transition is imperative, and there are many large-scale energy storage planning projects in Europe.
According to statistics from the European Energy Storage Association (EASE), there will be 4 new energy storage installations in Europe in 20225GW, of which 2GW is occupied by large reserves. From the perspective of large storage installed capacity, the British market accounts for 42%, which is the largest large storage market in Europe.
In addition, according to Solar Media data, by the end of 2022, there were 20The 2GW large storage project was approved and will be completed in 3-4 years; Energy storage systems have been planned or deployed615GW, broad room for growth.
The demand for large storage capacity is essentially the flexible resource demand brought about by the integration of renewable energy into the grid. Under the "Repower EU" target of 45% of renewable energy installed capacity in 2030, the installed capacity of renewable energy in Europe will continue to grow, promoting the increase of large storage capacity.
*: EnergyTrend Energy Storage Finishing.