Policies for Storing Renewable Energy – A scoping study of policy considerations for energy storage (RE-STORAGE)

 

Energy storage is sometimes seen as essential to integrating large shares of renewables into the energy system. But its specific characteristics, and its possible role in linking different sectors of the energy system, pose challenges to policy makers. IEA-RETD commissioned E4tech to identify the most important challenges and propose “no regrets” policy recommendations to meet those challenges.

Our report describes the potential role of storage in an evolving energy system, considering likely new flexibility requirements. It discusses the services that storage can provide to deliver this flexibility and analyses relevant policy, regulation and market design from different perspectives:

  1. The importance of system approaches in energy transition policies: Energy transition policies sometimes fail to consider wider system impacts and the need for enabling technology such as storage. Neither demand nor generation, and sometimes linking sectors, storage is often affected by broad energy system policy – sometimes with unintended negative consequences. Conversely, policies often fail to take advantage of the potential benefits of enabling technologies, like storage.
  2. Storage deployment in the legacy framework: the current framework emerged from a system dominated by large scale thermal generators. Storage, like other novel technologies, is poorly suited to this long-term and relatively rigid framework. Moreover, part of the value of storage technologies is not considered by the current markets and regulations. This can impede storage deployment.
  3. Uncertainty about the performance of storage technologies: Many storage technologies are not well understood by stakeholders. Harmonisation of codes, standards, regulation and testing could make the technologies more comparable and approachable. Uncertainties in the market and policy framework further hamper investment in storage.
  4. The privileged position of system operators: Only system operators can assess the actual bottlenecks and local needs in the electricity grid. As much of the value of individual storage assets lies in the removal of local bottlenecks, system operators have a unique perspective on the real value of and need for storage. However, restrictions on the ownership of storage limits their involvement in storage deployment.

The study provides recommendations for policy makers and other stakeholders to engage in energy storage deployment, ensuring it is aligned with wider system needs.

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