Energy storage has been the hot topic in the distributed energy industry since Tesla made its move into stationary storage a couple of years ago. As is often the case with ‘new’ technology, the headlines and the hype has been quite far ahead of the reality.
The reality in Europe today is that behind-the-meter (BTM) battery storage markets remain very small in most countries. Market growth is mainly concentrated in just three countries: Germany, Italy and the UK. And Germany is easily the biggest market – it accounts for over 90% of the total European market. So the impact to date on most European energy retailers is very limited.
However, Delta-ee’s research identifies that the introduction of new customer propositions which will radically change the way energy is generated and customers use it – and energy storage is often at the heart of these. These could prove to be disruptive game changers for energy retailers. Here are two examples:
A ‘Flatrate’ for electricity – too good to be true?
Last month one of the market leaders for residential energy storage – Sonnen – announced the introduction of the sonnenFlat – basically an electricity ‘Flatrate’. In short, German customers with PV and battery storage will only have to pay a flat monthly fee regardless of their specific electricity consumption. Julian Jansen, manager of the Delta-ee Energy Storage Research Service, says ‘the message to the customer is clear – decouple yourself from ever-growing energy prices, maximise self-consumption and support the energy transition’. By doing so Sonnen are using battery storage as the platform to displace incumbent energy suppliers. Sonnen are not the only player going down this route, and Delta-ee see many more models emerging, that look to share additional value outside of increasing self-consumption with the end-customer.
Low-cost packaged PV + Battery solutions hitting the bottom line
The best innovations are often actually nothing new. They bring together component parts in new and creative ways that make a proposition look and feel totally different. In the UK North Star Solar’s proposition targeted on social housing tenants is a great example of this. Using low cost financing combined with low cost sourcing of solar PV and battery storage, as well as intelligently exploiting legislation, they aim to help social housing providers address fuel poverty and sustainability agendas. If successful, incumbent energy suppliers will see lower income while acting as the payment collector for North Star Solar.
The BTM storage markets are small today but looking forward a combination of falling costs, rising energy prices and the introduction of new more attractive customer propositions will support very strong market growth in Germany, UK and Italy – and other countries. The European BTM market opportunity is set to grow very quickly. But major energy companies have so far only been able to capture a fraction of the European small scale energy storage market. ‘Innovation is happening at a speed that could catch out some incumbent energy retailers’, explains Jansen. ‘There is a risk of history repeating itself: energy suppliers could miss out on the energy storage boom in the same way many missed the boom in the solar PV market.’
So it is fear or greed that motivates energy retailers most? Delta-ee conclude they are both very strong motivations. Doing nothing is not an option – both the threat and the opportunity from storage will grow quickly in the years ahead. The critical question is whether energy retailers can move fast enough to negate the threat and capture the opportunity.
For more information regarding the Energy Storage Research Service, contact Julian Jansen or visit the service web page.