My take on distributed electricity storage

Written by Leonardo Meeus

The issue with existing batteries is that they suck

Here is an abstract from the speech Elon Musk gave in 2015 to debut the Tesla Powerwall: “…the issue with existing batteries is that they suck, okay, they are really horrible, they look like that, they are expensive, they are unreliable, they are sort of stinky, ugly, bad in every way, very expensive, you need to combine multiple systems, there is not one place you can go and buy a battery that just works, which is what people really want to buy, we have to come with a solution, that is the missing piece, that is what is needed to have a proper transition to a sustainable energy world, the missing piece is what we are going to show you tonight…”

The media has enthusiastically reported that soon our homes could become energy independent and that we would unplug from the grid. However, the existing energy players have been quick to react by saying that this business is still dominated by economies of scale and can only be captured in utility scale systems. Instead of installing a battery in our homes, we might prefer to pay for a community battery that is connected to the local distribution grid. The question is: “who will be allowed to invest in these distributed electricity storage devices?”, i.e. only market parties or also the grid operators. This is a heated debate today in Brussels.

European Parliament versus Commission

The European Parliament resolution of 13^th of September 2016 was remarkably favourable towards the idea of grid operators investing in electrical storage.

Here are a few abstracts from that resolution: The European Parliament “Calls on the Commission to clarify the position of storage in different steps of the electricity chain, and to allow transmission and distribution operators to invest in, use and exploit energy storage services for the purpose of grid balancing and other ancillary services;” … “Stresses the need to establish a separate asset category for electricity or energy storage systems in the existing regulatory framework, given the dual nature – generation and demand – of energy storage systems”

However, the European Commission’s Clean Energy proposals do not support the European Parliament resolution. The proposed Electricity Market Directive clearly favours a market-based investment in electrical storage assets. There is only a small opening for TSO and DSO investment under strict conditions. We have also contributed to this debate at the Florence School of Regulation, which is why this is the next topic of the month, enjoy!

Read the previous article: My take on electric vehicle charging infrastructure debate