30.06.2020 / News
Energy Storage Sector Calls on EU Policymakers to Commit to 2030 Greenhouse Gas Emissions Reductions Target of 55% Compared to 1990
By the end of 2020, the European Commission intends to present a comprehensive plan to increase the EU 2030 climate target. The energy storage industry is committed to supporting a socially just and cost-effective energy transition with high levels of ambition.
07.07.2020 / News
Energy Storage and the COVID-19 Recovery: Time for Policymakers to Step Up Their Commitments
The effects of the COVID-19 pandemic continue to be felt across our societies. Throughout these difficult months, the energy storage sector has proven its value in providing crucial flexibility and system services, helping the energy system to cope with the changing demand patterns.
As the most critical period of the COVID-19 crisis has passed, we can now start to reflect on the impact of the pandemic, identify lessons learned, and begin the hard work of reinvigorating the economy and accelerating our efforts to fight climate change.
Energy Storage Sector Comes to Terms with the COVID-19 Pandemic Impacts
Energy storage deployments have accelerated in recent years across Europe, providing much-needed resilience and flexibility to the energy system while serving a wide range of customers. At the start of 2020, the fourth European Market Monitor on Energy storage predicted a 30% increase in annual electrical energy storage deployments across Europe in 2020 compared to 2019. Although we do not yet have the deployment figures for the first half of 2020, this high level of deployment is unlikely to have been reached due to the COVID-19 pandemic and associated impacts.
While it was a difficult time for many businesses and individuals, the COVID-19 pandemic has revealed a few key lessons for the energy sector. It underlined the vital importance of a secure and flexible energy system, capable of dealing with unexpected shifts in demand patterns such as those experienced when the lockdown began. The need to invest in resilience and flexibility across the energy system is clear.
As for the impacts on the energy storage sector, EASE continues to gather data and insights from its members and other organisations active across the industry. Following a first survey held in April 2020, EASE collected responses to a second online survey between 8-22 June 2020 in order to assess the ongoing impacts on the storage sector. The survey collected 31 responses from diverse organisations, including manufacturers (from small to large), utilities, consultancies and associations, research centres, and system operators.
Despite the relatively small sample size, the survey results give useful insights into how the energy storage industry is faring. However, it should be noted that the effects differ significantly across companies, industry segments, and countries. Overall, the COVID-19 pandemic has been challenging for many energy storage organisations: 71% of the respondents expected lower revenues for Q2 2020 (April 1-June 30) than forecast, of which 19% expected a significant drop in revenues (30% or more).
This represents a worsening of the revenue expectations compared to the survey conducted in April. This drop in revenues is a challenge not only for the organisations that are directly affected, but also for the energy system which requires rapid storage deployment to reach its ambitious decarbonisation goals.
The biggest short-term impacts on revenues (April-October 2020) are expected to be workforce restrictions (e.g. social distancing measures, lockdown, etc – 55% of respondents) and delay or cancellation of existing/planned projects by customer (52%). Lack of customer demand was cited by 39% of respondents. In the longer term (affecting revenues end-2020 and into 2021), the main concern is delays or cancellations of existing/planned projects by the customer (65% of respondents). Lack of customer demand and workforce restrictions are also cited as top concerns.
There was no clear consensus among the survey responses on which energy storage business area was most affected, pointing to the fact that COVID-19 has had wide-reaching implications across all business areas. However, 29% of respondents indicated market development as the most affected area, followed by R&D (21% of respondents). These two areas could clearly benefit from policy support in the coming months and years as part of the recovery efforts.
Policymakers’ Green Recovery Efforts are Promising but Need to be Backed up by Concrete Actions
In June 2020, respondents were far more optimistic about EU and national government support for climate related policies compared to the previous survey (April 2020): 55% expect climate-related policies to gain momentum as a result of the pandemic (compared to only 31% in April). Only 13% see other policies being prioritised while climate policies are put on hold. This indicates that EU and Member States’ policymakers have succeeded in communicating their vision for a green recovery.
However, while the high-level messaging on recovery efforts is promising, this must be backed up by concrete actions and continued commitment by EU and national leaders to implement a truly green recovery as quickly as possible.
For the energy storage sector, several key policy actions are essential:
- Maintain the focus on ongoing EU energy policy initiatives, despite the COVID-19 crisis drawing attention away from the climate change challenge. For instance, ensuring rapid implementation of the Clean Energy for All Europeans Package is a priority in order to remove regulatory barriers and support energy storage deployment across the EU. Furthermore, policymakers should continue to prioritise policy files including revision of the TEN-E Regulation, Hydrogen Strategy, Batteries Directive, and Alternative Fuel Infrastructure Directive. This will allow Member States to build up the flexibility and resilience of their energy systems to cope with future crises and accelerate energy transition efforts across the board.
- Commit more funding to energy storage R&D, pilot, and demonstration projects to compensate for the anticipated shortfall in private investment and reduction in purchasing power among some customers (commercial & industrial players but also residential consumers). This will also help maintain competitiveness and employment in the clean energy technologies sector.
- Increase the EU’s commitment to decarbonisation by raising the 2030 greenhouse gas emissions reductions target to 55% compared to 1990 levels. This will send a clear signal to investors.
- Prioritise energy storage in the European Green Deal policies, including the Just Transition Fund, Renovation Wave, and Smart Sector Integration Strategy. Energy storage solutions have a vital role to play in all of these areas and should be explicitly prioritised as key enabling technologies for a cost-effective, just, and consumer-driven energy transition.
EASE applauds EU leaders’ commitments to ensuring a green economic recovery following the COVID-19 pandemic. We believe the measures above will help accelerate the economic recovery, support job creation, and cement the EU’s industrial and climate leadership, including in the energy storage sector.
In the coming months and years, EASE will continue to engage with its members and the broader industry to mitigate the negative impacts of the COVID-19 pandemic on energy storage sector, gather lessons learned, and support the EU’s recovery efforts.
- EASE MEMBERS ONLY: Download the full report
- EASE Recommendations for Achieving a Decarbonised Energy System by 2050
- EASE Recommendations for the Alternative Fuels Infrastructure Directive
- EASE Recommendations for Certification of Renewable and Low-Carbon Hydrogen
- Energy Storage Sector Calls on EU Policymakers to Commit to 2030 Greenhouse Gas Emissions Reductions Target of 55% Compared to 1990