Innovative long-duration energy storage (LDES) technologies are approaching commercial viability in several European markets, according to a new Eurelectric-AFRY report. The analysis finds that each GW of LDES could generate €150–250 million in annual variable operating cost savings at system level, pointing to a strengthened business case for technologies that can reduce renewable energy curtailment, ease grid congestion and provide long-term flexibility for a decarbonised power system.
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As renewable generation expands and electricity demand patterns evolve, Europe's power system requires increasing levels of flexibility over longer periods. Large volumes of wind and solar generation in spring and summer can create periods of surplus renewable electricity, while rising winter demand increases the need for power right when renewable output may be lower.
New tech on the up
While pumped-storage hydropower plants currently form Europe's backbone for long-term flexibility, the report's detailed market analysis shows that innovative LDES solutions are emerging as scalable alternatives. Technologies such as iron-air batteries, compressed air energy storage (CAES) and liquid air energy storage (LAES) can help balance the system over timescales exceeding eight hours, making them particularly suited to managing longer-duration flexibility needs.
The report finds that the value of flexibility is increasing across European power markets. In wind-rich Germany and Great Britain, some storage technologies with durations exceeding 24 hours are approaching commercial viability after 2040, while Spain and Portugal show particularly strong prospects for storage technologies with durations of eight to 12 hours. These trends suggest that a business case is beginning to emerge for a range of innovative LDES solutions.
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However, investment conditions for LDES remain uncertain in some markets. High upfront costs and insufficient revenues from existing energy and system service markets can make projects difficult to finance. This is particularly the case in Finland, where abundant pumped-storage hydropower and relatively low price volatility limit revenue opportunities for new LDES assets.
“Europe's energy transition needs technologies that can cover the increasing need for flexibility in the power system. It is encouraging that a business case is beginning to emerge for innovative long-duration energy storage with substantial system benefits: less curtailment, lower operating costs, reduced congestion and greater security of supply,” said Kristian Ruby, Secretary General of Eurelectric.
Reducing renewable curtailment
The value of flexibility is already creating tangible opportunities for LDES technologies. The report shows that LDES can substantially reduce renewable curtailment, particularly in regions facing network congestion. In Germany, where much of the wind generation is located in the north while demand is concentrated in the south, LDES can absorb excess renewable electricity during periods of congestion and inject it back into the grid when renewable output is lower. Across the countries analysed, each MW of installed LDES can avoid between roughly 2.2 and 4.5 MWh of curtailed renewable generation per year, with the highest benefits observed in Spain and Portugal.
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With renewable generation expected to continue growing rapidly across Europe, the value of long-duration flexibility is set to increase. As adoption lowers costs and market frameworks mature, innovative storage technologies are well positioned to become a cornerstone of Europe's decarbonised electricity system, delivering greater security, affordability and resilience while unlocking more value from renewable generation. (hcn)
