Policy and Regulatory Framework
The EU has developed a forward-thinking, supportive regulatory framework to encourage energy storage deployment as part of its ambitious clean energy and climate goals. Here’s how the EU is leading the way:
1. Clean Energy for All Europeans Package
The Clean Energy for All Europeans package, launched in 2019, is a transformative initiative aimed at making the EU a global leader in clean energy. It establishes clear rights and obligations for energy storage, distinguishing it as an essential asset for the grid.
Key components include:
- Electricity Directive (EU) 2019/944: Ensures fair treatment of energy storage in the energy market, enabling its integration as a flexible and vital component.
- Electricity Regulation (EU) 2019/943: Sets market rules that encourage the use of energy storage to maintain grid stability, creating a dynamic environment where storage can compete on a level playing field.
2. Battery Regulation
The European Commission’s pioneering Battery Regulation, proposed in 2020, sets high standards for battery sustainability and circularity, positioning Europe as a leader in environmentally responsible battery production. This regulation ensures that energy storage batteries are sustainably sourced, recycled, and managed, reflecting the EU’s commitment to a green, circular economy.
3. European Green Deal and REPowerEU
The European Green Deal and REPowerEU package set ambitious climate and energy targets, including achieving net-zero emissions by 2050. Both initiatives prioritize energy storage as essential for stabilizing renewable energy supplies and improving grid resilience. REPowerEU, in particular, focuses on diversifying energy sources and enhancing storage capacity in response to recent energy supply concerns, with increased support for hydrogen storage as a medium- to long-term solution.
4. Progressive Energy Storage Rights and Access
The EU has proactively defined energy storage and opened up ownership rights to ensure broader participation in the market. With fair grid access guaranteed, the EU enables both established players and innovative new entrants to contribute to a more resilient energy system, fostering healthy competition and innovation.
5. Advanced Network Codes for Grid Stability
The EU has established detailed network codes that allow storage operators to provide essential balancing services, enhancing the stability of Europe’s grid. By allowing storage to participate in balancing and ancillary services, the EU supports a flexible and integrated grid, a critical feature for renewable energy integration.
6. Capacity Markets and Investment Incentives
EU member states are encouraged to establish capacity markets and flexibility schemes, providing incentives for energy storage projects. The European Investment Bank (EIB) also plays a major role, offering targeted funding for energy storage innovation and infrastructure that aligns with EU climate goals, boosting the sector’s growth.
7. State Aid and National Support for Storage
EU guidelines under the Emissions Trading System (ETS) allow member states to support energy storage development through subsidies and other incentives. This approach supports a wide range of storage technologies and highlights the EU’s commitment to fostering a balanced and adaptable energy ecosystem.
8. Digitalization and Smart Grids
Through Horizon Europe and other programs, the EU is driving smart grid innovations that seamlessly integrate energy storage, distributed energy resources, and digital technologies. This initiative allows for a smart, responsive grid that enhances efficiency and cross-border coordination, benefiting citizens and businesses alike.
9. Cross-border Energy Storage and Integration
The Trans-European Networks for Energy (TEN-E) regulation prioritizes cross-border energy storage projects that enhance EU-wide energy resilience and promote regional cooperation. This initiative underscores the EU’s commitment to a unified, sustainable energy future, building energy storage capacity that benefits all member states.
Looking Ahead
The EU’s regulatory environment for energy storage is already advanced, but further enhancements are on the horizon. Future efforts will likely focus on fostering battery circularity, expanding hydrogen storage solutions, and optimizing market rules to accelerate progress toward the EU’s 2030 and 2050 energy goals. This evolving landscape highlights the EU’s role as a global leader in creating a clean, secure, and resilient energy future.