Only Energy Storage and Renewables Can Deliver Enduring European Energy Security | Alan Greenshields, Director EMEA

May 11, 2022

Adding 1 TWh of energy storage can replace German imports of Russian gas. 

Last month’s shutoff of natural gas supplies to Poland and Bulgaria by Russian energy giant Gazprom illustrates the degree to which European economies are reliant upon Russian energy and the urgent need to find alternative energy sources. 

In the short term, Poland and Bulgaria will seek to replace Russian gas with gas from other nations, likely to include imports from Norway and Azerbaijan. However, while these measures may suffice for Poland and Bulgaria in the short term, they do not address broader European exposure to Russian energy producers and the associated systemic energy insecurity. Germany recently announced a plan to eliminate crude oil and coal imports from Russia by late summer, however while the country is fast-tracking the development of gas import infrastructure, becoming completely independent from Russian gas will take some time.  

The Russian invasion of Ukraine is a stark reminder that authoritarian states may see supply chains as tools for geopolitical influence; Russia gambled that European dependence on oil and gas would prevent them from responding and is now attempting to aggressively assert influence by limiting supply. 

In 2021, the EU depended on Russia for 40 percent of its gas, 45 percent of its coal and 25 percent of its oil. Replacing the totality of this energy supply solely with other sources of fossil fuels will prove challenging and expensive and will not mitigate the financial risks from exposure to global energy markets dominated by politically unreliable countries. 

Germany, the largest energy user in Europe, has taken aggressive action to reduce its dependence on fossil fuels beginning in 2010 with the passage of legislation intended to drive the “Energiewende” (“Energy Transition”). In April, the country built on that framework with a package of policies to accelerate this transition to renewable power setting a target of a completely renewable power sector by 2035.  

To meet these aggressive goals, energy storage must be incorporated as a critical component of any plan. When renewable energy penetrations exceed 25%, storage is required to maintain grid stability and mitigate the intermittency of solar and wind. Currently, many utilities rely upon gas plants to balance intermittent renewables – a strategy that is proving nonviable in the long term.  

Germany lags other nations in the deployment of grid-scale energy storage primarily due to unfavorable regulatory frameworks that categorized storage as a generation source. Fortunately, the newly formed German government has signaled that it intends to improve the energy storage regulatory regime by creating storage-specific regulations instead of grouping storage with energy generation. This is expected to improve the prospects for storage projects, though details remain uncertain.  

This regulatory reform is coming at a critical juncture. Energy storage, and particularly long-duration storage, offers a tremendous opportunity for Germany as it seeks to reduce dependance on Russian fossil fuels and increase renewable energy levels.  

ESS estimates that the addition of approximately 1 TWh of storage capacity to the German grid would provide the same annual energy throughput as 50% of Germany’s annual gas imports – the same share currently imported from Russia. In addition, storage would provide German utilities with opportunities for energy trading and optimization that would not only support expansion of renewable generation but enhance system stability and improve economics – a win/win/win opportunity. 

“What is urgently needed now is the massive and rapid roll-out of critical enabling technologies in the energy sector, notably energy storage solutions,” stated a coalition of European clean energy groups in an open letter to the EU. “Looking at the crisis we find ourselves in now, we need to fast-track a new generation of clean technologies, without which energy independence from Russia will remain elusive.” 

Fortunately, while the challenge is significant, the technology and tools to meet this challenge already exist. New, commercially available long-duration energy storage technologies, including iron flow batteries, can deliver the storage capacity and energy security so urgently needed on the European continent. And they can do so at a lower cost and impact than legacy storage technologies, such as lithium ion, avoiding the associated supply chain vulnerabilities and operational challenges.. 

To learn more about the role of long-duration energy storage in secure energy systems, please see the recent ESS white paper: The Path to Energy Security is Green