The critical role of electricity storage for a clean and renewable European economy

Abstract

A fully renewable Europe is a major climate goal and an assumed priority by the European Union. However, intermittent renewables require hefty backup power sources to compensate for sudden generation shortfalls, ensuring grid stability and balance across time and geography. In this study, we employ a simulation-based algorithm to demonstrate the critical role of short- and long-term electricity storage in augmenting European renewable penetration (+65pp), while avoiding massive investments in generation overcapacity (from 157% in Sweden up to 800% in Denmark). We evaluate various battery and power-to-gas solutions, elucidating the differences among competing technology options that are deemed promising for utility-scale energy storage. The transition to renewable-based generation and storage necessitates a substantial scale-up of short-term storage, equivalent to 0.1% of the annual electricity demand in Europe (0.05% in interconnected grids), and approximately 6.5% of the annual electricity demand for long-term storage (3.5% in interconnected grids). The cost of electricity storage accounts for 30% of the overall global Levelized Cost of Electricity (LCOE), with an average LCOE of 165 EUR per MWh when countries are isolated and 135 EUR per MWh for an interconnected Europe. Such a transformative shift holds the promising prospect of achieving an average reduction of 90% in grid carbon intensity across all European nations, with reductions ranging from 29% for Belgium to an impressive 95% for Poland.