Energy Storage Integration in European Markets
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ENERGY MARKETS (R SIOSHANSI AND A MOUSAVIAN, SECTION EDITORS)
Energy Storage Integration in European Markets Marija Miletić 1
&
Hrvoje Pandžić 1
# Springer Nature Switzerland AG 2020
Abstract Purpose of Review Energy storage systems are becoming important agents in electricity markets. They are deployed to support further integration of renewable energy sources and can offer various services to the network operators. Recent Findings As the European electricity network operation moves toward market-based decision-making, it is necessary to ensure a fair playground for all participants. This implies adaptation of regulatory framework and market rules to allow unobstructed participation of energy storage in markets at all levels. Summary This paper aims at providing a brief overview of the status of energy storage in European market framework, identifying the obstacles and proposing actions to overcome them. Keywords Energy storage . European market design . Policy
Introduction Traditionally operated in centralised way and planned robustly, today’s power systems are going through a paradigm shift caused by high penetration of renewable energy sources (RES). Large quantities of RES installed in both the transmission and distribution networks induced changes in ways the two systems are run and planned. To ensure stable grid operation, more and more flexibility sources are necessary, which brought energy storage into the equation as one of the environmentally acceptable options. However, it must be noted that the emission-reducing property of energy storage unfolds at high penetration of RES, while at the lower penetration levels, it can even have the opposite effect. Energy storage is not only now being installed at the transmission and distribution grid levels but also at the end user level to ensure high utilisation of the energy produced by RES. Energy storage is considered for other purposes besides RES integration, such as an alternative to network investments, and as a congestion management tool, changing the traditional approach to network planning.
Energy storage is not a new technology. Pumped hydropower plants have been an important part of the modern power systems since almost their beginning. In the past, they were usually used for energy arbitrage—charging when consumption is low and discharging when it is high. Restructuring of the European power system, which begun in the 1990s and continues today, made way for independent investors instead of the traditional regulated utilities. The independent investors are concerned with ensuring the return on their investments by making profit in the markets. Furthermore, the latest Electricity Directive (EU) 2019/944 [1] prohibits the system operator’s ownership over energy storage, requiring that a fully competitive market entity owns and operates storage. It was proven in simulation as well as in practice that investments in energy storage cannot be justified by arbitrage only [2]. Therefore, in order to stimulate investments in energy storage, it is necessa
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