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Podcast S03E04

Distributed energy storage in Europe – where’s the market at, where’s it heading?

Distributed energy storage in Europe – where’s the market at, where’s it heading?

The practicalities and economics of energy storage are improving rapidly year on year. As are the drivers for storage. In this episode, Jon Slowe is joined by Andy Bradley, Director at Delta-EE; Eva Chamizo Llatas, President of EASE (The European Association for Storage of Energy) and Director of European Affairs at Iberdrola; and Patrick Clerens, Secretary General at EASE. We discuss where the European energy storage market has got to today, the key issues in the market and where it’s headed.

Episode transcript

Jon Slowe, Director, Delta-EE

Andy Bradley, Director at Delta-EE

Eva Chamizo Llatas, President of EASE (The European Association for Storage of Energy) and Director of European Affairs at Iberdrola

Patrick Clerens, Secretary General at EASE

 

[00:00:04.560] – Jon Slowe

Welcome to Talking New Energy, a podcast from Delta-EE, the new energy experts. We will be talking about how the energy transition is developing across Europe with guests who are working at the leading edge of this transition.

[00:00:22.310] – Jon Slowe

Hello and welcome to the episode, Energy storage is on the rise.

[00:00:27.230] – Jon Slowe

Batteries and other forms of energy storage are being deployed in ever greater numbers across Europe. Storage can be big or small, in front of the meter or behind the meter. And as technology costs fall and the value of flexibility turns upwards, storage has certainly got a bright future. But as with all things new it's not plain sailing. Market structures and regulations haven't always been developed with energy storage in mind. New business models need to be created and associated propositions developed for customers. So today we'll be discussing where energy storage is at in Europe and where it's going.

[00:01:06.480] – Jon Slowe

I'm delighted to be joined by three guests who are excellently qualified to explore these two questions. My first guest is Eva Chamizo from Spanish based utility Iberdrola. And she's also president of the European Energy Storage Association. Hello Eva and welcome to the podcast.

[00:01:25.680] - Eva Chamizo Llatas

Hello. Thank you.

Jon Slowe - Eva could you start by giving us a couple of examples of how Iberdrola, one of the biggest utilities in Europe, is working with energy storage today.

[00:01:39.780] - Eva Chamizo Llatas

Oh yes.

[00:01:41.630] - Eva Chamizo Llatas

As you have said energy storage has potential applications in all stages of the value change or electrical system and some of the applications have energy requirements when all the rest are focused on delivering capacity to the system. So, we work on both of them. So, for instance we work with pumping hydro storage that has a clear competitive advantage compared to other technologies for energy applications because it can produce energy for long long long hours. Iberdrola began to work with pumping storage in the late 70s. The reason why I introduced this is because we sometimes talk about storage about something that is really new.

[00:02:29.490] - Eva Chamizo Llatas

Well not exactly, storage has been in the market for a long time and it is a necessary element for the transition and for the future but it's something that already has a lot of technologies working in it. So, we began in the late 70s and now we have more than 3 gigawatts of power and 60 gigawatts per hour of storage capacity. By 2022, when the timing a project is completed (because this is the one in which we are working right now) it is in the north of Portugal and we will own and operate pumping hydro facilities with a total of more than 4 giga[watts] of power and with the storage capacity of over 90 gigawatts per hour.

[00:03:15.360] - Eva Chamizo Llatas

So, for you to have an idea it will mean the possibility to produce electricity to 1.2 million consumers during the one week

Jon Slowe - OK

[00:03:26.220] - Eva Chamizo Llatas

Yes.

[00:03:26.990] - Jon Slowe

They're quite big numbers aren't they Eva? And I think many of our listeners won't – or it's easy to not – appreciate how much energy storage there is today from technologies like pumped hydro. What about on batteries which are where much of the excitement is and I don't want to forget pumped hydro. But could you give us a feel of how Iberdrola might be working with one of the newer technologies?

[00:03:54.400] - Eva Chamizo Llatas

Oh yes of course. So, as I was telling you batteries and other elements in which we're working and in June this year Scottish Power’s plans for the UK's largest wind farm have been approved by the Scottish government.

[00:04:07.270] - Eva Chamizo Llatas

So, Whitelee will have its own purpose-built battery storage plant on site and it will be one of the biggest budgets project in the UK. So it will be charged with clean, green renewable power from the 539 megawatt wind farm the plant battery storage centre will maximize the renewable electricity integration and support the national grid in maintaining the resilience and stability of the electricity grid even at times when wind may not be blowing. So, this is a first for a wind farm in the UK at this scale. So, the battery storage size will be the size of half a football pitch and will comprise a lithium battery technology with 50 megawatt capacity and 25 megawatts per hour of storage of energy.

[00:04:56.050] - Eva Chamizo Llatas

So, as you see we're working both in pumping and also batteries at a large scale.

[00:05:03.250] – Jon Slowe

Ok, I'm particularly excited about that second project Eva because I can see Whitelee wind farm from my house in Glasgow. So, I'm not sure I'll be able to see the battery from my house, but I'll be able to know it's there and…

Eva Chamizo Llatas – I hope not

Jon Slowe - Thanks Eva, so my second guest is Patrick Clerens, Secretary General of the European Energy Storage Association (EASE).

[00:05:26.950] – Jon Slowe

Hello Patrick.

Patrick Clerens - Hi there, how are you doing.

[00:05:30.710] – Jon Slowe

Good, thank you. So, Patrick, Eva’s told us a bit about pumped storage and batteries. Are these… when we think of energy storage—

[00:05:43.220] – Jon Slowe

As I said before many people automatically think of batteries they're exciting and they’re new, and pumped storage  very significant in terms of energy capacity.

[00:05:52.430] – Jon Slowe

Are there other forms of energy storage that we should be thinking about as well in addition to these two?

Patrick Clerens - Actually we managed in EASE to categorise all the energy storage technologies and we've put them down in five different families.

Jon Slowe - OK.

Patrick Clerens - We’ve done five different families because they have five different distinct specificities and these technologies can be either a chemical one which has longer term storage which is starting to be more and more seen on the market which is mainly driven by hydrogen.

[00:06:28.930] - Patrick Clerens

So, it's hydrogen electrolysers, hydrogen generation, and then you can do any other kind of chemicals you want with those: you can work with methanol or ammonia or synthetic natural gas. So, this is the one which is mainly for longer term storage. Then you see obviously the batteries which are the electrochemical one. But there you see a new evolution with so-called flow batteries, these are batteries that can hold way more energy than the classical batteries as you know today.

Jon Slowe - OK

Patrick Clerens - Then obviously there is this electrical energy storage which is these balloons on birthday parties which attract the dust and your hair.

[00:07:03.990] - Patrick Clerens

This is static electricity, this is the super capacitor and magnetic super capacitor. In the last two ones is the mechanical one which is the oldest which is the pump hydro let's say or compressed air or liquified air, these are the mechanical one also flywheels which you would count in these that just rotating masses. And then the last one which is the cheapest way of storing is the thermal storage. This is a way where you would use the heat propriety of either molten salt or material or ceramics or whatever to store the heat and then use it mainly in heat form but you could potentially re-electrify it.

[00:07:39.670] - Patrick Clerens

So there are a lot of different technologies and to come back to your question about what you're talking about in quantities I mean we are doing the European Market Monitoring for Energy Storage which is a reference document on the European market and we'll talk about it, I suppose in a moment. But we have also very clearly seen that the overwhelming majority of installed capacity today is still pumped hydro storage – we’re talking about capacity of something like 96% of all installed capacity in Europe is pumped hydro storage—

[00:08:11.590] – Jon Slowe

Okay, so when we think of storage—

Patrick Clerens – Energy contained it's 99% roughly.

[00:08:18.550] - Jon Slowe

So when we think of storage today Patrick we have to keep in mind that the vast majority of that as you said 96 percent or 99 percent by energy or capacity is pumped hydro.

[00:08:30.460] - Jon Slowe

Patrick, why do you, why do you see so much excitement then about batteries. And do you think other technologies are not getting the attention that they deserve at the moment? Are people too focused on electrochemical batteries at the moment?

Patrick Clerens – So, for the moment we see as you rightly said a lot of attention for batteries, mainly lithium ion batteries.

[00:08:53.880] - Patrick Clerens

And this is due to the fact that the prices have been dropping radically for these technologies. In the last year you saw drops of 80% compared to before. So, it's really huge price drops which makes them readily available and therefore you can stack them very easily and put them wherever you want. So there's no natural requirement of a higher reservoir and lower reservoir or high difference or anything else no cavern, you need nothing. So, this is allowing for these batteries to deploy more and more. The next factor is that you see the electric cars which are coming.

[00:09:28.680] - Patrick Clerens

We all see the Paris agreement; we all see what's happening on climate change about CO2 reduction and we see that transport is the only sector which increases CO2 emissions in the last year compared to all the other sectors. So, there is a huge need for electromobility and therefore the batteries which allow for electroimmobility are so much on the rise and all the other activities we can do with these batteries like home storage and so on.

[00:09:54.470] – Jon Slowe

OK, now let's bring in my last guest Andy Bradley from Delta-EE, hello Andy.

Andy Bradley – Hi Jon

[00:10:06.130] – Jon Slowe

You've been doing some analysis in the European Market Monitor that Patrick mentioned about the energy storage market in partnership with EASE.

[00:10:17.170] – Jon Slowe

We've heard about the big numbers that pumped hydro:as Patrick alluded to pumped hydro is great but it requires specific geographic circumstances so you can't push it everywhere and there's probably a limited amount that could be developed.

[00:10:33.490] – Jon Slowe

So, I'd like to now look at the growth in the market and see how much new storage capacity is being added. So, can you give us a flavour for how much capacity is being added and how quickly the market is growing today.

[00:10:49.440] – Andy Bradley

Yeah sure, Patrick mentioned the report that we were producing very closely with EASE and its members, looking at the European energy storage market – it’s the European Market Monitor on Energy Storage – and the last edition of that report we did showed that in 2018 about 1.1 gigawatt hours of electrical storage was added to the system, or just under a gigawatt of power added to the system primarily as lithium ion batteries as Patrick mentioned. So it's still a small part of the total energy storage available in the energy system but it's growing quite quickly or very quickly actually and looking back at some of the numbers I mean the electrical energy storage market doubled in size in 2015 to 2017 periods, soit doubled in size in two years, and then it doubled in size again between 2017 and 2019.

[00:11:41.290] – Andy Bradley

So, you know that's an exponential rate of growth. Now clearly the big question: can the market maintain that rate of growth in the coming years. I mean we certainly see it growing this year and growing in 2020. But it's probably unlikely the market will double in size and in the 2019-2021 period, but it might take three years for example.

[00:12:02.140] – Jon Slowe

Yeah, it's easy to double a small number and harder to double a big number

Andy Bradley - Absolutely, absolutely right.

[00:12:06.060] – Andy Bradley

But for sure the market is growing very quickly and I'm sure we'll talk about some of the ways in which it's growing in the next few minutes.

[00:12:12.970] – Jon Slowe

And in terms of where that growth is coming from you could cut that in different ways, but one way you can cut it is behind the meter and in front of the meter and the example Eva gave about the wind farm I can see from my house in Glasgow and the fixed storage facility there.

[00:12:30.640] – Jon Slowe

That's a great in front of the meter example behind the meter example might be a solar panel with a battery and a house for example. So what's that balance of in front of meter and behind the meter is most of the growth coming from one or the other or is that each split?

Andy Bradley - It is split actually and does vary year to year in front of the meter is typically a smaller number of bigger projects.

[00:12:51.460] – Andy Bradley

So, in any one year like last year actually 2018 the front of the meter space grew, grew quicker than we had anticipated actually because a larger number of grid scale projects were realized before the end of 2018. But the behind the meter space is also growing quickly both in the residential area but also in the commercial and industrial areas, so behind the meter projects at commercial or industrial sites. So, both parts of the market are growing quickly I think.

[00:13:22.150] – Jon Slowe

Okay.

Patrick Clerens – May I finish one sentence, Jon if you allow me?

Jon Slowe – Yeah, go ahead.

[00:13:26.340] - Patrick Clerens

I think we all are aware that there is this Clean Energy for all Europeans package  which has been done which is mainly the Electricity Market Regulation and Directive and in there is quite a neat feature that has been included.

[00:13:40.210] - Patrick Clerens

So the consumers in Europe may now choose to have a variable tariff – electricity tariff – meaning they're exposed to the wholesale prices, and this would mean that if you have a good storage at home and maybe some PV you could also buy electricity from the market or take it from the market at the moment when the prices are negative. So, nobody knows how this feature will be implemented in detail. But you're in theory now entitled to be exposed to wholesale prices and we know they're getting more and more negative prices. So this is really an opportunity also for consumers to be more energy independent meaning having more batteries at home, so this will for sure be a driver for the next years on how storage will be deployed.

[00:14:24.840] – Jon Slowe

Okay.

Andy Bradley – Absolutely, I mean when you look at the European market, we talk about the European market but actually currently it’s really two big markets: there’s Germany and there’s the UK. Actually there are markets in many other countries, but in terms of scale I think Germany is three quarters of the residential market in Europe, about 75% of residential energy storage is located in Germany and in terms of the front of the meter space 60% or so of the market last year was in the UK. So, the market is still… we talk about the European market but

[00:14:58.150] - Andy Bradley

The market is still actually quite concentrated in some markets, so there's huge potential for these propositions and developments to get traction in a large number of other countries in Europe.

[00:15:09.640] – Jon Slowe

Yeah, so you could look at it two ways couldn't you. You could say either UK and Germany are unique and that's why they've got a lot of this new capacity – and nowhere else is the same and nowhere else you can follow. Or you could say the UK and Germany are the front runners and everywhere else is going to follow. Which of those, well I know what you’re going to say Andy

Andy Bradley – We’ll come onto our crystal ball later on.

Jon Slowe - Yeah okay.

[00:15:31.100] - Andy Bradley

But I'm picking up on Patrick's point I’ve got to say its great to see the Clean Energy Package is a really central instrument I think to shaping the future of the energy storage markets in Europe and I'm sure we would pick up on that later. But it's one of the, one of the drivers which will continue to support growth, I think.

[00:15:48.310] – Jon Slowe  

Eva, can I come back to you and Iberdrola

[00:15:52.390] – Jon Slowe  

What's your observation on how the market is growing and this difference between big front of meter projects like you described at Whitelee and small, behind the meter project at houses or commercial or industrial customers.

[00:16:08.640] – Jon Slowe  

Do you see one or the other as more or less interesting to a company like Iberdrola?

Eva Chamizo - Well we are a big company so we tend to work with large storage projects, so obviously in front of the meter we are, let's say, more focused because of our capacities, but we have also been involved and we also think that there is a development in behind the meter product. And we have been launching products in niche markets where this technology can make sense in the short term. So we, we have projects that are smart solar.

[00:16:52.390] - Eva Chamizo Llatas

So, we go to a residential or even we envisage to talk to industry because, as was said before by my colleagues, the market's going to be needing the storage in both sides but also as a big utility see we have more focus in front of the meter because this is probably what, well of course this is something that you need more investment and the bigger size to do. And also because what we are going to be needing is we are integrating renewable and we are going to a system that is going to be based on this renewables with no fossil fuel as backup.

[00:17:40.010] - Eva Chamizo Llatas

So, the system is going to rely massively on storage. So, we will be obliged to give responses at large scale and also a small scale, but large scale has to be, in terms of security of supply, a very important focus. And also, we are going to be working not only in the electricity sector but also – because the decarbonisation goes to all sectors – we will be in the heating and cooling sectors and so far they are, they need probably more capacity than what residents of storage, so behind the meter, is being able to to provide.

[00:18:26.090] - Eva Chamizo Llatas

So, this is why I think that there is a market for both but probably we are more focused in in in front of the meter storage.

[00:18:36.290] – Jon Slowe

And I can see the fit with a company like Iberdrola that's as you say used to be in developing wind farms large capital projects, a big storage facility fits very well with that that type of business. But Eva, are there one or two challenges or practical issues that you've had to overcome? So, whether it's a Whitelee project or another front of meter a big storage project. Can you give us a feel for what's challenging, hard or difficult or maybe surprising about developing these types of projects?

[00:19:15.320] - Eva Chamizo Llatas

Yes of course. In terms of the practical issues involved in the deploying of storage today.

[00:19:22.490] - Eva Chamizo Llatas

Well first of all as I was saying we're going to be needing large storage. I mean it is important to know that for instance, the national plant that the member states or something for example in Spain: Spain has set a target of 2.5 gigawatt of battery storage and 3.5 gigawatts of new pumping hydro. So, what I mean is there will have to be a combination of in front of the meter and behind the meter but in front of the meter needs a lot of work and that. So, what do we need as investors?

[00:19:58.100] - Eva Chamizo Llatas

And what's the problem that we have been discussing all through the Clean Energy Package? Of course we need long term vision in the revenue streams and any final investment decision in companies,

[00:20:11.720] - Eva Chamizo Llatas

..these decisions are taken based on the certainty of the long revenues that we are having and there are programs like the EFR in the UK or the DS3 in Ireland – they address correctly this issue.

[00:20:26.780] - Eva Chamizo Llatas

So, I think that the Clean Energy Package has established a framework in which we will be able as investors to have a long term vision because what large projects need.

Jon Slowe - Eva, on those frameworks so I can completely appreciate that.

[00:20:44.510] – Jon Slowe

So, with renewables project you might have a feed in tariff for some guarantee of the revenue stream, with storage you need that framework for the revenues. How, how far away or how close or far away are we from having the details of that kind of framework in place in different countries whether revenue streams for storage are indeed quite predictable and comfortable for investment decisions. Are we close to that certainty or do we still have a long way to go to enable the company like Iberdrola to invest in storage across different countries?

[00:21:18.800] - Eva Chamizo Llatas

No, I think, I think of course different countries have different realities. We are present in a lot of countries but a lot in Spain. I think that it is coming, I think that the clarity of decarbonisation is creating the need to have security of supply based on a decarbonised way of storage of energy and storage.

[00:21:47.860] - Eva Chamizo Llatas

Of course, it's getting there.

[00:21:49.480] - Eva Chamizo Llatas

So, I think that… because with the national plan, I think the national plan have been one of the most important elements in the Clean Energy Package. Because member states have thought that they really have to give an answer decarbonisation and storage is one of the biggest elements. So I think we are close to— I mean renewables begin begun with a need to have long term vision with it and it was through public aid and now we see a market for renewables for instance with the PPA.

[00:22:28.060] - Eva Chamizo Llatas

We have corporate solutions that go in the market and storage will need some way to go as  well. But the I think that we have already the experience with renewables and it will come, the long-term vision is coming. I don't think it is something that will be, I think that member states now understand that this is a necessity for decarbonisation.

[00:22:55.780] - Eva Chamizo Llatas

So, it's coming..

Jon Slowe - That's encouraging to hear.

[00:23:01.300] - Jon Slowe

Patrick can I ask you about the perspective of your members. You've got a whole range of different types of companies active in the storage value chain. How…what is their mood at the moment? Are they excited about the market?  Are they frustrated at lack of clarity on certain issues? Are they thriving? Are there too many people trying to sell batteries at the moment. Can you give us a sense of how your members are feeling about the market at the moment?

[00:23:34.070] - Patrick Clerens

Yes so,

[00:23:36.220] - Patrick Clerens

Andy said very well where the markets are for [demand, the biggest markets]??? we see this behind in front of the meter in the U.K. or Germany we see also other business cases which are everywhere in Europe which are system services or what is emerging now is also to balance renewables on isolated systems. So you can have this on islands but also less interconnected. So there are very clear markets for energy storage today where companies make money. But the need for energy storage is very often not remunerated. I give you two examples. First of all, when you talk about balancing the system (frequency containment reserve) you're paid by capacity so everyone who's providing frequency containment is getting the same payment for the megawatt, one megawatt of capacity.

[00:24:30.200] - Patrick Clerens

Now very often the batteries who are earning money from the system services react way faster than the conventional generation would: gas or coal plants or others. Which means in turn that they are doing the heavy lifting and also getting the frequency to 50 hertz again before the conventional generators start even to influence or to lift the frequency which means that the drop is done by the storage but everybody gets the same payment and that's something which is not working. So, if you do better system services, faster system services you should be remunerated in a better way or more way.

[00:25:07.250] - Patrick Clerens

This is the case in the UK as was mentioned before or in Ireland, but very often on the continent where they don't feel the heat like they do on islands...

[00:25:15.020] - Patrick Clerens

…It's not the case. So it’s a bit frustrating to see that we do more work but we get the same revenues and then—

Jon Slowe - Patrick that's an example I guess of the market structures and regulations needing to keep up and move quick enough and not always doing so.

[00:25:31.320] - Patrick Clerens

That's true but it's also the question on the on, actually this how can you monetize the system service which is a service to the whole society to the whole electricity or energy system as such but were only one person is actually putting the technology down and invest in this technology so that the added value  is dispersed between all people. And how do you monetize such a service? And that's a difficult part.

[00:26:00.990] - Patrick Clerens

Now this is where we are asking for new services by the TSO , tendedered by the transmission system operator, or maybe distribution system operator in future – we're discussing at the moment how to have a more active distribution system operator also – and to have this therefore captured this added value and be able to monetize this added value. The same question just to finalize will be also on seasonal storage. We want to do governance in 2050. We want to increase the targets for 2030 with the new Commission, the European Green Deal is on the table. Newer or harsher targets for renewables for decarbonisation will come in which means that we need to get there.

 [00:26:37.700] - Patrick Clerens

But nobody knows how will we get energy from the windy times to the less windy times or for the sunny times to the less sunny times.  26:45 Not with this effort.

[00:26:47.000] – Jon Slowe

Ok, so more needed to do on the regulatory front on the market structures on remuneration.

[00:26:57.380]  Jon Slowe

It's that time in the podcast already when we're having to take our crystal ball out so let we just pick it up and put it down on the table in front of us and

Patrick Clerens - You broke it.

 

Jon Slowe - No not yet, Well I did break it trying to use it for Brexit the other day.

[00:27:12.410] – Jon Slowe

So, I'm not going make that mistake again.

[00:27:16.940]  Jon Slowe

So crystal ball time, let's set the dial on the crystal ball to 2030.

[00:27:28.820]  Jon Slowe

And I'd like to think about, whether you answer this in numbers or qualitatively, how much storage there will be/will be deployed between now and 2030. And any inclination as to what will be on the front of the meter and behind the meter. So, Eva starting with you, how much storage will we see and answer this in whichever way you'd like.

[00:27:52.160]  Jon Slowe

Will we see between now and 2030 and what type of storage?

Eva Chamizo - well getting into such numbers is not easy so I will try to concentrate them in one Member State, the ones that I know better and that’s Spain.

[00:28:10.260] - Eva Chamizo Llatas

Spain has calculated and I think that all the member states have done in there national plans, the amount of storage they will be needing in order to correctly integrate the renewables that will be coming in as Patrick just said, when you don't have wind and you don't have sun or you don't have water you need storage and they well they have said is that they will be needing more or less six gigawatts of batteries sorry of storage. In Spain you take into account the particular conditions because this is one of the questions that is very important, there's no solution that is valid for all member states.

[00:28:56.370] - Eva Chamizo Llatas

Spain has a very particular situation in terms of possibilities of pumping hydro. So that is why 3 gigawatt have been considered that will come from that from that technology and 2.5 from battery. And then how it will be distributed in front of the meter or behind of the meter. I think we need to do a lot of calculation yet. It depends also on the way that every member state is housing and residential is composed as you were saying. Germany for instance has a lot of houses, individual houses – it's not the case in Spain when you have a lot of buildings.

[00:29:40.110] - Eva Chamizo Llatas

So, all those elements make that the decisions have to be adapted to the circumstances of the different populations and member states.

[00:29:52.740] – Jon Slowe

Okay so I'm inferring there may be a bit more front of meter in Spain than maybe in somewhere like Germany.

[00:29:58.800] – Jon Slowe

And if I had to ask a very cruel yes or no answer Eva, do you think Spain will reach that 6-gigawatt target?

Eva Chamizo Llatas - Well we are trying to do our best, I mean from the dollar point of view.

[00:30:12.210] - Eva Chamizo Llatas

So, I really hope that we can provide it because this is probably the only way to decarbonisation. So, I think it is something that we have to work to move, the state will have to do its job in terms of guaranteeing the long term that we were talking about in terms of investment simplification of the administrative procedures etc. So, it is feasible. We will need to work for it but I don't think we have a lot of different possibilities, if we really want to decarbonise.

[00:30:49.020] – Jon Slowe

  1. Thanks Eva.

[00:30:50.790] – Jon Slowe

And Patrick what do you see when you gaze into the crystal ball in 2030.

[00:30:58.210] - Patrick Clerens

Yes. I put it on the wrong time frame I put on 2050, so I tried to bring it back from the 2050 timeframe. There was a very interesting study so let's continue in Spain. In Spain there was a study from the utility and your electric published it then, the Association of electricity utilities, And they said so imagine we are in 2050 in Spain and we have 70 gigawatt of peak demand. They calculated in order to balance, which in Spain would be mainly PV electricity, to balance this over the day to meet the noon peak over the day demands and night demands they would shift around 345 gigawatt hours over one day.

[00:31:50.040] – Jon Slowe

Wow.

Patrick Clerens - So this is a huge sum 345 gigawatt hours, huge sums. And this is for 70 gigawatt of peak demand. It's roughly what Germany uses today. This is for over the day. Now if you see that this is in a decarbonise society so let’s say 100% renewable and if you foresee that you want to go in 2030 to 50% renewables that's roughly what you were aiming at for the moment. And this is what at least climate campaigners ask us to do then we would need roughly half a bit less than half of this because we have some more dispatchable generation.

 [00:32:28.320] - Patrick Clerens

So, we would still end up with something like I don't know 150 to 200 gigawatt hours you have to shift around over one day. This is this is huge amounts of energy we're talking about. And this is for the daily balancing. When you now look at the forecast in 2050 with the same energy system, electricity system of Spain you want to go to the seasonal balancing taking the excess electricity of March, April and May and put this to the part of October, November, December when you when you really need it. There you are talking about a seasonal need in 2050 of 25000 gigawatt hours for seasonal energy movement from one side to the other.

[00:33:11.760] - Patrick Clerens

And now we are talking really big numbers. And energy which need to be stored for 3, 4, 5 months.

[00:33:18.660] – Jon Slowe

So even if we get close to those numbers Patrick as you say they are huge numbers and they'll need every bit of storage we can find, be it hydrogen, pumped hydro, electric or thermal and so on.

[00:33:34.350] - Patrick Clerens

Yes. Because the batteries are such – and now we’re coming back to the technology question we had in the beginning – for the moment or in the last years, we had battery production which is limited. In 2020 we are expected to have, I don't know 180 gigawatt hours of battery we can produce a year. The yearly global production is 180 gigawatt hours or something like this in 2020 which means that if you want to have 345 gigawatt hours to move that move around and this is only Spain.

Jon Slowe -Yeah.

[00:34:02.010] - Patrick Clerens

You cannot solve this with battery certainly. This is not possible.

[00:34:06.330] - Patrick Clerens

So, it will be way too expensive. So that's why we are advocating also on the policymakers side that we need a technology neutral framework which allows all technologies which store energy be it in a heat form, a gaseous form, a liquid form, electrochemical whatever it is, to be supported and not only to support lithium ion batteries as it is very often done to date not only but very often.

[00:34:34.200] – Jon Slowe

OK thanks Patrick. Andy last but not least what do you see in the crystal ball?

[00:34:41.730] – Andy Bradley

Yeah, I see lots of growth. The question is how much growth and how fast. I think what Patrick said is absolutely right that demand and needs for flexibility in our energy system in Europe over the next 10 years and beyond is strong and will only get stronger. A suppose from the energy storage perspective thing about battery storage. The question is how much of that will be, will be batteries so: just while Patrick was talking there and thinking about that question, I mean looking at the European markets today and how we see it growing in the next two,three, four years and then going out to 2030.

[00:35:17.580] – Andy Bradley

I'd say 25, 35, 40 gigawatt hours of electrical energy storage perhaps would look reasonable based on the growth in the market for battery storage over the last years and how we see it going in the near-term. There are some big drivers and unknowns of course: the role of the V-G for example vehicle to grid technologies and how significant  they’ll become by 2030, will stationary storage still be a dominant part of the market or will the EV market be contributing in a significant way. What happens when the fit tariffs for many residential customers of PV in Europe start to phase out post 2021 in Germany and many other countries, and how much will that spur the uptake of household batteries across Europe in different countries not just the U.K, Germany and Italy you know the ones we have mentioned.

[00:36:10.460] – Andy Bradley

Co-located storage stationary storage with EV recharging we see that as one of the big applications and big opportunities. There's lots of exciting developments around second life batteries and people even talking about third life batteries recently, I hear about. So you know the number of applications that we see and the use cases for energystorage which is large today and will only get bigger. So overall I think the market is bound to get much bigger but we mustn't forget that the energy transition encompasses all of the energy sources we've talked about so electrical energy storage, battery storage, will only be one part of that source of flexibility.

[00:36:52.790] – Jon Slowe

I think that's my takeaway from today actually that rather than thinking of an energy storage market, there are many many energy storage markets plural. They change from country to country, big plants like Eva described at Whitelee, through to behind the meter storage, hydrogen, thermal storage, electrochemical, batteries, there’s a whole variety of applications and the market will grow strongly but it won't grow one way, it will grow in many ways.

[00:37:19.960] – Andy Bradley

To come back to your question that I think you're trying to get to, is it going to be me in front of the meter or behind the meter, my personal view is that it's probably a 60:40, 70:30 split overall and I'm getting more behind the meter space.

Jon Slowe - Okay.

[00:37:33.210] - Jon Slowe

Well as I tell all my guests we will bring you back in 2030 and see if these predictions are right or wrong. So that draws us to the end of that podcast today. We hope that you've enjoyed listening and are equally engaged and equally excited about energy storage. So, thanks for listening. Thanks to my guests. Thank you very much Eva, thanks for joining.

[00:37:57.780]

 Eva Chamizo Llatas - Thank you.

Patrick Clerens - Jon, thank you very much for hosting.

Jon Slowe - And thank you to Andy. And we'll be back with new episodes from talking new energy next week. Goodbye.

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