Study on energy storage.
Date: 2023-03-14
Institutions: Directorate-General for Energy
Subjects: EU Member State, electrical energy, energy grid, energy storage, energy supply, energy transition, price of energy, qualitative analysis, regulatory policy, renewable energy, thermal energy

ENTEC 

Energy Transition Expertise 
Centre 

Study on  
Energy Storage 

1 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EnTEC – Study on Energy Storage 

Study on Energy Storage 

Consortium Leader 
Fraunhofer Institute for Systems and Innovation Research ISI, Breslauer Straße 48, 76139 Karlsruhe, Germany 
Barbara Breitschopf, barbara.breitschopf@isi.fraunhofer.de; Andrea Herbst, andrea.herbst@isi.fraunhofer.de  

Consortium Partners 
Guidehouse, Stadsplateau 15, 3521 AZ, The Netherlands 
McKinsey & Company, Inc., Taunustor 1, 60310 Frankfurt, Germany 
TNO, Motion Building, Radarweg 60, 1043 NT Amsterdam, The Netherlands  
Trinomics, Westersingel 34, 3014 GS Rotterdam, The Netherlands  
Utrecht University, Heidelberglaan 8, 3584 CS Utrecht, The Netherlands 

Contributed by 
TNO, Motion Building, Radarweg 60, 1043 NT Amsterdam, The Netherlands  
Trinomics, Westersingel 34, 3014 GS Rotterdam, The Netherlands 
Fraunhofer Institute for Systems and Innovation Research ISI, Breslauer Straße 48, 76139 Karlsruhe, Germany 
Fraunhofer Institute for Solar Energy Systems ISE, Heidenhofstr. 2, 79110 Freiburg im Breisgau, Germany 

Authors 

Onne Hoogland, onne.hoogland@trinomics.eu ; Verena Fluri, verena.fluri@ise.fraunhofer.de;  
Christoph Kost, christoph.kost@ise.fraunhofer.de; Marian Klobasa, marian.klobasa@isi.fraunhofer.de;  
Matthias Kühnbach, matthias.kuehnbach@ise.fraunhofer.de; Manish Khanra, manish.khanra@isi.fraunhofer.de; 
Michelle Antretter, michelle.antretter@isi.fraunhofer.de; Joris Koornneef, joris.koornneef@tno.nl;  
Harry van der Weijde, harry.vanderweijde@tno.nl; Aravind Satish, aravind.satish@tno.nl;  
Elisa Battistutta, elisa.battistutta@tno.nl; Karina Veum, karina.veum@tno.nl; João Gorenstein Dedecca, joao.de-
decca@trinomics.eu; Anniek Doorman, anniek.doorman@trinomics.eu; Luc Van Nuffel, luc.vannuffel@trinomics.eu; 
Ondrej Cerny Ondrej.Cerny@trinomics.eu; Barbara Breitschopf, barbara.breitschopf@isi.fraunhofer.de;  
Andrea Herbst, andrea.herbst@isi.fraunhofer.de.  

Prepared for 
European Commission, DG ENER under contract N° ENER/C2/2019-456/ SI2.840317 

Manuscript completed:  November 2022 
Published: 

March 2023 

EN PDF 

ISBN 978-92-76-58767-5 

doi 10.2833/333409 

MJ-05-22-375-EN-N 

 Disclaimer 
This report was created by the Energy Transition Expertise Center (EnTEC), a think tank collaboration with DG ENER. The report 
draws on multiple sources, including Fraunhofer Institute for Systems and Innovation Research ISI, TNO, Trinomics and Fraunhofer 
Institute  for  Solar  Energy  Systems  ISE.  The  information  and  views  set  out  in  this  report  are  those  of  the  author(s)  and  do  not 
necessarily reflect the official opinion of the Commission. The Commission does not guarantee the accuracy of the data included 
in this study. Neither the Commission nor any person acting on the Commission’s behalf may be held responsible for the use which 
may be made of the information contained therein. 

© European Union, 2023 

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EnTEC – Study on Energy Storage 

Table of Content 

Table of Content .......................................................................................................................... 3 

Acronyms ....................................................................................................................................... 5 

Executive Summary ..................................................................................................................... 8 

1 

Introduction.................................................................................................................. 14 

2 

2.1 

2.1.1 

2.1.2 

2.1.3 

2.1.4 

2.1.5 

2.1.6 

2.2 

2.2.1 

2.2.2 

2.2.3 

2.2.4 

3 

3.1 

3.2 

3.2.1 

3.2.2 

3.2.3 

3.2.4 

3.2.5 

3.3 

3.3.1 

3.3.2 

3.4 

3.4.1 

3.4.2 

3.4.3 

3.5 

3.5.1 

Current situation and potential development until 2030 ................................. 15 

Database of storage technologies .............................................................................................. 15 

Techno-economic dataset .......................................................................................................................................................... 15 

Data analysis..................................................................................................................................................................................... 18 

Use cases for energy storage .................................................................................................................................................... 24 

Global figures (Europe) ................................................................................................................................................................ 25 

Facilities data .................................................................................................................................................................................... 28 

Behind-the-meter data ................................................................................................................................................................ 34 

Alternative flexibility solutions ................................................................................................... 34 

Supply-side ....................................................................................................................................................................................... 34 

Interconnections ............................................................................................................................................................................. 37 

Demand-Side ................................................................................................................................................................................... 38 

Summary and Comparison......................................................................................................................................................... 49 

Market value of stored electricity and cost gaps ............................................... 51 

Introduction and approach ........................................................................................................... 51 

Market overview .............................................................................................................................. 51 

Day ahead market .......................................................................................................................................................................... 52 

Intraday market ............................................................................................................................................................................... 53 

Ancillary service markets ............................................................................................................................................................. 55 

Residential electricity prices....................................................................................................................................................... 64 

Future electricity market development ................................................................................................................................. 66 

Qualitative assessment of other applications ......................................................................... 66 

Storage to support transmission and distribution infrastructure .............................................................................. 67 

Capacity provision, capacity markets/auction.................................................................................................................... 68 

Assessment of revenue/cost gaps ............................................................................................. 69 

Arbitrage trading on the day ahead spot market............................................................................................................. 70 

Provision of frequency containment reserve ...................................................................................................................... 75 

Residential behind-the-meter storage technologies ...................................................................................................... 77 

Survey results .................................................................................................................................. 83 

Meta data survey ............................................................................................................................................................................ 83 

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EnTEC – Study on Energy Storage 

3.5.2 

3.5.3 

3.5.4 

3.5.5 

3.5.6 

3.6 

4 

4.1 

4.1.1 

4.1.2 

4.2 

4.2.1 

4.2.2 

4.2.3 

4.3 

4.3.1 

4.3.2 

4.4 

4.4.1 

4.4.2 

4.5 

4.5.1 

4.5.2 

4.5.3 
4.6 

4.6.1 

4.6.2 
4.7 

4.8 

Categorisation and definitions of energy storage services .......................................................................................... 85 

Current roles and revenues of energy storage .................................................................................................................. 87 

Future services and revenues of energy storage .............................................................................................................. 89 

Perceived opportunities, barriers and desired actions ................................................................................................... 90 

Discussion on survey results ...................................................................................................................................................... 92 

Conclusions on market value of storage .................................................................................. 93 

Policy and regulatory frameworks for energy storage .....................................95 

Analysis of MS intentions regarding targets and a regulatory framework facilitating 
the deployment of storage .......................................................................................................... 96 

Review of intentions and national regulatory frameworks for energy storage ................................................... 96 

Status of national goals and regulations in the EU27 .................................................................................................... 97 

Market design issues for energy storage ................................................................................ 101 

Review of elements concerning electricity market design ........................................................................................ 101 

Status in the EU27 ....................................................................................................................................................................... 103 

International landscape ............................................................................................................................................................ 118 

Long-duration energy storage (LDES) ..................................................................................... 127 

Review of issues concerning long-duration energy storage .................................................................................... 127 

Status in the EU27 ....................................................................................................................................................................... 130 

Double taxes, charges and grid tariffs issues for storage ................................................... 135 

Review of issues concerning double taxes, charges and grid tariffs ..................................................................... 135 

Status in the EU27 ....................................................................................................................................................................... 137 

Non-discriminatory network planning .................................................................................... 142 

Review of issues for storage ................................................................................................................................................... 142 

Status in the EU27 ....................................................................................................................................................................... 146 

International best practices concerning network planning ....................................................................................... 147 
Guarantees of origin for renewable energy storage ............................................................ 149 

Review of the topic ..................................................................................................................................................................... 149 

Status in the EU27 ....................................................................................................................................................................... 152 
Contributions of thermal energy storage ............................................................................... 155 

Permitting barriers and best practices ..................................................................................... 162 

List of figures ............................................................................................................................ 163 

List of tables .............................................................................................................................. 166 

A.1 

Annex 2.1 Energy Storage Database and Use Case Matrix ............................. 168 

A.2 

Annex 3.1 Market Indicators Dashboard ............................................................. 169 

A.3 

Annex 3.2 Survey Results ........................................................................................ 170 

A.4 

Annex 4.1 EnTEC Study on energy storage – Updated national fiches ....... 216 

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EnTEC – Study on Energy Storage 

Acronyms 

AC 

ACER 

AEMO 

aFRR 

AIB 

BEV 

BMBF 

BTES 

BTM 

C&I 

CAES 

CAPEX 

CEEAG 

CEER 

CEF 

CERA 

CESA 

CfD 

CHP 

COP 

CSP 

DA 

DR 

DSM 

DSO 

EASE 

EEA 

EECS 

EFR 

EGEC 

Active Consumers 

Agency for the Cooperation of Energy Regulators 

Australian energy market operator 

Automatic frequency restoration reserve 

Association of Issuing Bodies 

Battery electric vehicle 

Federal Ministry of Education and Research  

Borehole thermal energy storage 

Behind the meter 

Commercial and industrial 

Compressed air energy storage 

Capital expenditure 

Guidelines on State Aid for Climate, Environmental Protection and Energy 

Council of European Energy Regulators 

Connecting Europe Facility 

Cyprus Energy Regulatory Authority 

Continental Europe Synchronous Area 

Contracts for Difference 

Combined heat and power 

Coefficient of performance 

Concentrated solar power 

Day-ahead 

Demand-response 

Demand-side management 

Distribution System Operator 

European Association for Storage of Energy 

European Environment Agency 

European Energy Certificate System 

Enhanced Frequency Response 

European Geothermal Energy Council 

ENTSO-E 

European Network of Transmission System Operators for Electricity 

ERAA 

ERCOT 

ESGC 

ESIF 

ESIF 

ETM 

EU 

European resource adequacy assessment 

Electric Reliability Council of Texas 

Energy Storage Global Conference 

European Structural and Investment Funds 

European Structural and Investment Funds 

Electricity Target Model 

European Union 

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EnTEC – Study on Energy Storage 

EV 

FCR 

FERC 

FFR 

FRR 

FTM 

GIE 

GO 

Electric vehicle 

Frequency Containment Reserve 

US Federal Energy Regulation Commission 

Fast Frequency Response 

Frequency Restoration Reserve 

Front of meter 

Gas Infrastructure Europe 

Guarantee of Origin 

HEMS 

Home Energy Management Systems 

HP 

IC 

ICT 

ID 

IGCC 

INTER 

IRENA 

ISEA 

ISO 

ISP 

IVPEE 

KPI 

kWh 

LAES 

LDES 

LIB 

LOLE 

MEC 

mFRR 

MIC 

MS 

MWh 

NDP 

NECPs 

NER 

NERC 

NRA 

NRAA 

OPEX 

PCI 

PEM 

Heat Pump 

Information and Communication 

Information and communication technology 

Intra-day 

International Grid Control Cooperation 

International Thermonuclear Experimental Reactor 

International Renewable Energy Agency 

Institute for Power Electronics and Electrical Drives (German: Institut für 
Stromrichtertechnik und Elektrische Antriebe) 

Independent system operator 

Imbalance settlement period 

Impuesto sobre el valor de la producción de la energía eléctrica 

Key performance indicator 

Kilo watt hours 

Liquid air energy storage 

Long-duration energy storage  

Lithium-Ion Battery 

Loss of load expectation 

Maximum Export Capacity 

manual Frequency Restoration Reserve 

Maximum Import Capacity 

Member State 

Mega watt hours 

National Development Plan 

National Energy and Climate Plans 

Nordic Energy Research 

North-American Electric Reliability Corporation 

National Regulatory Agency 

National resource adequacy assessment 

Operational expenditure 

Project of Common Interest 

Polymer Electrolyte Membrane 

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EnTEC – Study on Energy Storage 

PHS 

POD 

PPA 

PPE 

PV 

RAA 

RAB 

RE 

RED 

REP 

RES 

RFB 

RM 

Pumped hydro storage 

Power Oscillation Damping 

Power Purchase Agreement 

Programmation pluriannuelle de l’énergie 

Photovoltaics 

Resource adequacy assessment 

Regulated asset base 

Renewable Energy 

Renewable Energy Directive 

REPowerEU 

Renewable Energy Sources 

Redox Flow Battery 

Ramping Margin 

RoCoF 

Rate of Change of Frequency 

RR 

RTO 

SCR 

SDR 

SEM 

TCO 

TEN-E 

TERRE 

TES 

TRL 

TSO 

TTES 

TWh 

Replacement Reserve 

Regional Transmission Organisation 

Storage Charge Record 

Storage Discharge Record 

Single Electricity Market  

Total Cost of Ownership 

Trans-European Networks for Energy 

Trans-European Replacement Reserves Exchange 

Thermal Energy Storage 

Technology readiness level 

Transmission System Operator 

Tank Thermal Energy Storage 

Terra watt hours 

TYNDP 

Ten-Year Network Development Plan 

UPS 

UTES 

V2G 

VAT 

VPP 

Uninterrupted power supply 

Underground Thermal Energy Storages 

Vehicle to grid 

Value Added Tax 

Virtual Power Plants 

7 

 
 
EnTEC – Study on Energy Storage 

Executive Summary 

Flexibility of energy supply and demand becomes increasingly important with increasing shares of 
intermittent renewable electricity generation. Energy storage is one of the candidates to provide 
the required flexibility to the electricity system. Against this background, the Energy Transition Ex-
pertise Centre was asked to deliver a study on energy storage to improve the  understanding of 
energy storage technologies, their business case, and best practices for enabling the development 
of energy storage capacities. 

Current situation and potential development of energy storage technologies until 2030 

A large number of energy storage technologies are described in this report. They comprise me-
chanical, electrochemical, electrical, chemical and thermal energy storage technologies and are at 
different levels of development. The technical parameters and costs of these technologies are still 
expected to develop further until 2030, showing that there is still a lot of research and development 
in the field of energy storage. 

The annual European energy storage market for stationary batteries in the electricity system has 
seen an increase in installed capacity from 0.6 GWh in 2015 to about 9.4 GWh in 2022. Between 
2021 and 2022 the market has doubled. About 30% of the 2022 market was residential storage, 
roughly 2% were Commercial and Industrial (C&I) storage and about 70% front-of-meter installa-
tions. Many new projects are announced, already under construction or submitted. The projects are 
concentrated on four countries: Spain, Germany, Ireland and Greece. In Germany, the three largest 
chemical storage plants are announced with 100 / 50 MW each. However, pumped hydro storage 
(PHS) plants still have a much larger capacity at about 44 GW (power) and more than 200 GWh 
(energy).  Further  PHS  plants  are  under  development  to  provide  large-scale  flexibility  to  absorb 
growing intermittent renewable electricity production. 

There exists also a wide variety of thermal energy storage (TES) technologies and applications, var-
ying in temperature levels, possible sectors and technological maturity. TES forms therefore a di-
verse field present throughout the EU energy system, including (domestic) hot water tanks/instal-
lations, a growing front- and behind-the-meter electricity storage energy capacity reaching almost 
14 GWh in 2022, almost 190 GWh of solar thermal-related TES in 2020, and 6.8 GWh of concentrated 
solar power-related TES. 

The  applications  in  which  energy  storage  can  play a  role cover  a  wide  range  from  bulk  storage 
services to services supporting behind the meter customer energy management. Energy storage 
has seen a strong market growth in the last years and the market is expected to grow further at a 
high pace. Next to energy storage, other flexibility solutions are supply-side flexibilities, intercon-
nectors and demand side management. Supply-side flexibilities, which will in the future be provided 
by renewable energy technologies, partly mean that renewable energy is not used to its full poten-
tial. Electricity storage on the other hand comes with a need for additional resources for the pro-
duction of assets, and energy storage also implies losses. Interconnectors can reduce the demand 
for storage but have long permit and construction times. Demand side management can support 
the system and save costs for the user, but is also dependent on communication infrastructure and 
user needs. All flexibility options will be important to level supply and demand. Balancing and de-
ploying them is one of the key challenges for the future energy system. 

8 

 
EnTEC – Study on Energy Storage 

Market value of stored electricity and cost gaps 

Power market arbitrage becomes profitable in 2021 and 2022, further cost reduction would 
substantially improve profitability. If we look only into arbitrage, cost gaps for storage technol-
ogies did exist in power markets before 2021, as price levels and price spreads have been too low 
for most storage technologies. The price developments since 2021 however show a strong increase 
of average electricity power market prices and price spreads, which make many storage technolo-
gies profitable in 2021 and 2022. Calculations with expected electricity price levels in 2030 still show 
cost gaps for storage technologies participating only in arbitrage, if today's technology costs are 
considered. High uncertainties are connected to future price level expectations, as expected price 
spreads most probably are falling to a lower level compared to 2021. Cost reduction due to further 
storage technology development would substantially improve profitability even with lower market 
prices and price spreads. 

Ancillary service markets most beneficial today. Highest revenues can be realised on balancing 
markets. Earnings on frequency containment markets (FCR) reaches e.g. in Austria 76,000 Euro/MW 
in 2020 and 190,000 Euro/MW in 2021. Such earnings make battery storage investments beneficial, 
but overall market size and tendered volumes are limited. Other balancing markets as automatic 
and manual frequency restauration reserve (aFRR and mFRR) generate lower revenues, but could 
generate  additional  earnings  from  activated  balancing  energy.  Trading  strategies  become  more 
complex as participants must make estimates for balancing capacity and energy payments and bid 
accordingly. 

Other storage applications are paid on a project basis. Storage technologies to support trans-
mission/distribution  infrastructure  receive  typically  individual  payments  per  project.  The  level  of 
payments is similar to FCR payments, e.g. 26,000 Euro/MW per year in Australia. Storage operators 
stack revenues and combine different use cases and revenue streams. 

Storage technologies contribute in capacity provision mechanisms and capacity markets or capacity 
auctions. In this case storage technologies typically receive a capacity payment for the provision of 
firm capacity. The clearing price for capacity provision in UK's capacity market for delivery in 2025 
- 2026 was GBP 18 per kW and year (ca. 20,000 Euro/MW per year). Another revenue stream can 
be generated with reduction of peak capacity and related grid connection fees. Storage technolo-
gies are often combined with PV generation and benefit from reduced payments related to local 
grid fees and grid capacity prices. 

Future revenue expectations for storage technologies. Overall, profitability of storage technol-
ogies is already present in some markets and for some applications, whereas for others, such as 
power market arbitrage only, profitability is limited. Some factors that could decrease the attrac-
tiveness  of investments in storage technologies are  potentially increasing interest rates (making 
CAPEX-intensive investments comparably less attractive) and disincentives stemming from the reg-
ulatory design (e.g., introducing net metering). In addition, other flexibility resources from the de-
mand-side (e.g., load shifting of heat pumps or electric vehicles, potentially bidirectional charging 
of electric vehicles) complement and compete with storage technologies in some services. 

Several  important  factors  will  increase  the  attractiveness  of  using  energy  storage  as  a  flexibility 
option in the future: Firstly, technology costs for different storage options will decrease in the future. 
Secondly, technological improvements like longer lifetimes or an increased maximum number of 
cycles will make individual business cases more profitable and relevant for certain specific services. 
Thirdly, the phase-out of conventional flexibility options and simultaneously an increasing need for 
flexibility due to larger shares of renewables in all Member States are likely to lead to favourable 

9 

 
EnTEC – Study on Energy Storage 

market conditions for energy storage technologies. In addition, multi-use concepts such as com-
bining peak shaving with a market-driven use of a storage, can ensure that investments in energy 
storage pay off, as savings from one use case and revenues from another are stacked. 

Survey approach. As part of this study an online survey was conducted on behalf of the EnTEC 
consortium. The aim of this survey was to provide complementary input on: 

  Current and future uses of energy storage; 
  Current and future revenue streams for energy storage; 
  Barriers, opportunities and drivers for energy storage. 

Invitations to complete the survey were sent out by the European Association for Storage of Energy 
(EASE) to all of their members (including various associations) and the survey was shared with EGEC, 
GIE, Euroheat & Power and Solar Heat Europe. Overall, 93 respondents filled out the survey. They 
provide a good cover of technologies and locations; there are higher concentrations of respondents 
in particular countries, which may be a result of the survey dissemination method, but since these 
countries are also the locations where energy storage investors are most active, the sample is still 
representative of the current state of the energy storage community. 

Current roles and revenues of energy storage. The results show that energy storage currently 
supplies a very wide range of services across all categories. Storage is already playing a role in a lot 
of different markets. In those markets already a wide range of business models for energy storage 
exist. These differ across technologies, projects and storage project portfolios. Although each tech-
nology group has a dominant income stream, revenue stacking is important, as most respondents 
indicate a number of revenue streams. Arbitrage is currently the dominant revenue stream overall, 
followed by the provision of ancillary services. Interestingly, services to transmission and distribu-
tion network operators are a relatively small component of reported revenues. Behind the meter 
storage services and revenue streams are relatively low compared to the other categories of prod-
ucts/services.  

Future services and revenues of energy storage. Respondents are highly optimistic about the 
future business case and growth potential for energy storage. They do not expect their business 
models to change significantly towards 2030, but some outliers exist where respondents expect a 
shift in their dominant service provided and associated revenue. The results suggest that a more 
diverse business model with more value stacking is likely in the future for all technologies.  

Perceived opportunities, barriers and desired actions. The perceived barriers that are ranked as 
most important by the respondents, are related to regulation and market access. This is followed 
by financial barriers and by the absence of long-term policy signals in general, the issue of double 
taxation  and  grid  charging,  and  the  lack  of  a  regulatory  framework  for  local  flexibility  markets. 
Technological barriers are considered least important by most respondents. 

Most respondents indicate that fair access to technology-neutral competitive markets across the 
whole EU, including remuneration of energy system services that are currently not valued, would 
be the most desired way to support energy storage. There seems to be significant divergence be-
tween Member States in terms of market access and level playing field. No Member State is per-
ceived to offer both perfect market access and sufficient policy guidance. 

Policy and regulatory frameworks for energy storage 

Chapter 4 complements the technology and market analyses of the study by focusing on selected 
policy and regulatory issues. The analysis is structured according to 8 different topics, shown in the 
figure below. The analysis has been developed based on literature review and interviews together 
with a validation round by Member State experts who were asked to  check and update national 
fiches that summarised the situation in their country. The main findings for each topic analysed in 

10 

 
EnTEC – Study on Energy Storage 

chapter 4 are presented next, while the updated national fiches of the 2020 study on energy storage 
for the EU27 are presented in Annex 4. 

Figure 1 

Storage topics analysed in chapter 4 

3.1 MS intentions 
regarding targets and a 
facilitating regulatory 
framework

3.2 Market design 
issues

3.3 Long-duration 
energy storage

3.4 Double taxes, 
charges and grid tariff 
issues

3.5 Non-discriminatory 
network planning

3.6 Guarantees of 
origin for renewable 
energy

3.7 Contributions of 
thermal energy storage

3.8 Permitting barriers 
and best practices

MS intentions regarding targets and a regulatory framework facilitating the deploy-
ment of storage 

Several Member States have now a legislative definition of storage. National goals for energy stor-
age can provide a positive environment for energy storage, and are effective if supported by fi-
nancing and regulative programs. Goals for energy storage capacity to be installed have been an-
nounced by some Member States. Tenders for energy storage or renewables combined with energy 
storage  are  an  effective  means  to  support  investments  in  energy  storage,  and  have  also  been 
adopted so far by a handful of Member States. 

Market design issues 

Significant progress has been made in the removal of entry barriers for storage and other flexibility 
sources with the adoption and implementation so far of the Clean Energy Package. Some remaining 
national barriers to entry are related to the access to spot and balancing markets and should be 
further addressed with on-going measures. More progress is needed on other areas, such as on 
regulatory frameworks for the procurement of flexibility by DSOs, contracts for services procured 
by system operators to allow further value stacking by storage operators, and the representation 
of locational aspects and provision of locational information to market parties 

The provision of ‘conventional’ non-frequency ancillary services such as voltage control and black 
start is often still not remunerated. The need for new ancillary services in the Continental Europe 
Synchronous Area and Nordics is currently  small, and thus procurement is mainly limited to the 
Irish SEM and the Baltic countries. Nonetheless, the need for remunerating these new ancillary ser-
vices should increase in all synchronous systems as the penetration of variable renewable energy 
sources grows. 

Long-duration energy storage 

Long-duration storage can be understood that long-duration storage should be able to discharge 
continuously for multiple hours  (more  than  4,  or  even  10)  up  to  even  weeks.  For  long-duration 
storage in the weekly to seasonal timeframe, technologies are either still in development or the 
potential left in the EU is limited/located in some MSs only. Policy discussions are strongly related 
to need for further development of long-duration energy storage technologies’ technical perfor-
mance and costs. 

11 

 
 
 
EnTEC – Study on Energy Storage 

The needs for weekly and seasonal flexibility will increase in the future. Nevertheless, it is unclear 
how much new long-duration energy storage will be necessary in the future EU electricity system 
to meet long-term flexibility needs, given competition with other flexibility sources. Further research 
is needed on how much long-duration flexibility the increased renewable energy targets and re-
duced  gas  consumption  could  require,  among  which  from  storage.  The  justification  for  specific 
support  schemes for  large-scale  long-duration  energy  storage deployment  should  be  driven by 
flexibility needs. 

Other issues for long-duration storage could be addressed. This includes increasing the liquidity 
and products in forward markets, improving capacity mechanism design, and the market for hybrid 
RES-storage. 

Double taxes, charges and grid tariffs 

Cases where taxes, surcharges and/or grid tariffs are imposed fully twice on electricity that is stored 
and fed back into the grid constitute a penalty for the business case of energy storage solutions. 
The issue affects many of the potential applications including arbitrage, all ancillary services and 
various  services  to  support  transmission  and  distribution  infrastructure.  A  provision  in  a  revised 
Energy Taxation Directive is being considered to address double taxation. Also, while it is too early 
to assess the transposition of the Clean Energy Package, recent progress in some Member States 
has been identified to ensure that grid tariffs are cost-reflective and non-discriminatory. 

Non-discriminatory network planning 

The role of storage assets should be properly reflected by network operators in their network plan-
ning, in order to evaluate correctly their potential to contribute to network development and system 
operation. Similarly, network operators should take fully into account the potential of storage when 
conducting the resource adequacy assessment. 

The EU legislative framework for inclusion of storage in network planning is largely set in place, but 
there are some lags in implementation on national level, especially concerning the consideration of 
storage projects in national and distribution development plans. Moreover, the incentives for net-
work operators to consider alternative measures to investing in new power lines (such as electricity 
storage) are used only scarcely in MSs. 

When storage is considered, generally only large-scale storage assets are considered by network 
operators, in particular in the resource adequacy assessments – this means the potential contribu-
tion of storage is not fully analysed and it puts smaller storage assets in disadvantage. 

Guarantees of origin for renewable energy 

The current EU legislation for guarantees of origin (GOs) does not foresee a role for energy storage, 
since GOs can only be issued to producers of energy. There is only limited experience with GOs 
with a high temporal granularity and inclusion of storage. The current draft European GO standard 
foresees higher time granularity as an option, but there is no legal basis for (standalone) storage 
issuing GOs. However, the proprietary EnergyTag GO standard was developed with the aim of in-
troducing granular GOs and also covers energy storage use cases. There could be a potential value 
in extending the GO system that could do a closer tracking renewable energy flows from production 
to consumption. This would include introducing GOs with a more detailed time granularity. Energy 
storage could then offer a “time shifting” service to allow conserving GOs in time. Although a po-
tential value exists, the scope of demand for the GO “time shifting” service is not known and prob-
ably limited at the moment. Moreover, the cost of introducing such system is probably higher than 
the expected benefits, in particular due to the current low price of GOs. 

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EnTEC – Study on Energy Storage 

Contributions of thermal energy storage 

Thermal energy storage  (TES) needs are  expected to grow significantly in order to allow for the 
increased deployment of renewable energy. TES can contribute to the EU energy system in multiple 
ways, including facilitating the integration of renewable electricity and renewable thermal energy, 
moderating the need for increase in electricity generation capacity, and providing ancillary services 
to the electricity system. Through these contributions, TES can lead to significant investment sav-
ings, help replace fossil fuel use, especially gas and coal, increase the energy system flexibility and 
reduce greenhouse gas emissions throughout the EU27. 

Recent best practices with TES in the EU and abroad are presented in this study. 

Permitting barriers and best practices 

Complex  and lengthy permitting  procedures are considered an important barrier for large-scale 
energy  storage  projects.  The  consulted  experts  indicated  that  streamlining  and  digitalisation  of 
permitting procedures while setting clear time limits would be helpful in addressing the barrier. For 
pumped hydro storage, better knowledge and application of the ecological points system in the 
Water Framework Directive by regional authorities would be useful. Moreover, the adjustments to 
the Renewable Energy Directive to accelerate permitting for renewables that are proposed in the 
context of REPowerEU address the issues of permitting, in part also for storage projects.  

13 

 
 
 
EnTEC – Study on Energy Storage 

1 

Introduction 

Flexibility of energy supply and demand becomes increasingly important with increasing shares of 
intermittent renewable electricity generation (i.e. solar PV and wind power). Energy storage is one 
of the candidates to provide flexibility to the electricity system, facilitating the integration of renew-
ables, lowering electricity prices during peak times, facilitating the electrification of the economy 
and increasing the security of supply of the electricity system. Against this background, the Energy 
Transition Expertise Centre (ENTEC) was asked to deliver a study on energy storage to improve the 
understanding of energy storage technologies, their business case, and best practices for enabling 
the development of energy storage capacities. The study was delivered in the first semester of 2022.  

The specific objectives of the study are to: 

  Update the information on the costs and performance of the different storage technologies, 
their trends for the coming years and a comparison against other flexibility sources (covered in 
chapter 2); 

  Assess the market opportunities for energy storage (covered in chapter 3). In particular: 

 

 

the market value of energy storage in different MSs through their possible revenue streams 
(i.e. from the day-ahead and intraday markets, ancillary services markets, etc) and the ap-
proaches towards stacking revenues from different markets; 
the existence and magnitude of cost gaps for energy storage technologies by comparing 
the expected revenues with the costs. 

  Analyse the policy and regulatory issues for  the  development of energy storage (covered  in 
chapter  4),  focusing  on  the  discussion  and  identification  of  best  practices  for  a  selection  of 
topics, including: 

  Member State intentions (incl. targets) facilitating the deployment of storage; 
  Market design issues; 
  Barriers to long-duration energy storage; 
  Double taxes and charges; 
  Non-discriminatory network planning; 
  Guarantees of origin; 
  Contributions of thermal energy storage; 
  Permitting barriers and best practices. 

The report is structured around these objectives (one chapter each). Additionally, several delivera-
bles are made available as annexes that can be accessed online and can be used for further research 
and policy development.  

14 

 
EnTEC – Study on Energy Storage 

2 

Current situation and potential development until 2030  

Energy storage, as defined by the EU in the Clean Energy Package, is a means of “deferring the final 
use  of  electricity  to  a  moment  later  than when  it  was generated,  or the  conversion  of  electrical 
energy into a form of energy which can be stored, the storing of such energy, and the subsequent 
reconversion of such energy into electrical energy or use as another energy carrier”1. Energy storage 
is one of the key elements of the future flexibility system. In this chapter, the database of energy 
storage  technologies  delivered  with  this  report  will  be  described  in  detail  in  Section  2.1.  It  also 
includes information on EU energy storage facilities and analysis of both data sets. In Section 2.2, 
energy storage will be compared to other flexibility solutions such as supply-side flexibility, inter-
connections, and demand-side management. 

2.1 

Database of storage technologies 

The information on energy storage technologies prepared in this task consists of several parts: 

  A techno-economic dataset with detailed information on five groups of energy storage tech-
nologies regarding their technical and cost characteristics as well as the services these technol-
ogies can provide, 

  Data analysis and use case descriptions for the identified energy storage technologies 
  Global figures on energy storage for the EU 
  A dataset of storage facilities in the EU, including operational, announced as well as de-com-

missioned projects of all storage technologies and 

  Behind the meter data on electricity storage technologies per country. 

The excel document delivered with this report contains a large set of techno-economic data, the 
facilities  data  base  and  behind  the  meter data.  The  content  will  be  described  together  with  the 
analysis of the data in  the following.  The  link  to the excel download can be found  in  Annex 2.1 
Energy Storage Database. 

2.1.1 

Techno-economic dataset 

The techno-economic data is provided in the excel document delivered with this report, in the sheet 
“Energy Storage Technologies”. The five groups of energy storage are analysed in detail here: me-
chanical, electrochemical, electrical, chemical and thermal energy  storage. These five groups are 
again subdivided into a total of 50 individual storage technologies (see excel document for details). 
For each of these technologies, technical, economic and other key performance indicators (KPIs) 
are described: 

  Level of maturity (technology readiness level, TRL). For the TRL, the definition by the Hori-

zon 2020 2014-2015 Work Programme was used: 

  TRL 1 – basic principles observed 
  TRL 2 – technology concept formulated 
  TRL 3 – experimental proof of concept 
  TRL 4 – technology validated in lab 
  TRL 5 – technology validated in relevant environment (industrially relevant environment in 

the case of key enabling technologies) 

1   EU (2019) Directive 2019/944 of the EU parliament and the council on common rules for the internal market for electricity. Article 2, Paragraph 

(59) 

15 

 
                                                   
EnTEC – Study on Energy Storage 

  TRL 6 –  technology  demonstrated  in  relevant environment (industrially relevant environ-

ment in the case of key enabling technologies) 

  TRL 7 – system prototype demonstration in operational environment 
  TRL 8 – system complete and qualified 
  TRL 9 – actual system proven in operational environment (competitive manufacturing in the 

case of key enabling technologies; or in space) 

  Energy carrier in and Energy carrier out describe the type of energy input and output of the 

technology. 

  Energy Capacity, Power installed capacity and Storage duration at full power describe the 

size of the system regarding capacity, power and the ratio of both. 

  Round-trip efficiency (%) refers to the efficiency of electricity output to electricity input, while 
the Conversion efficiency (%) is described for technologies which only convert electricity to 
another type of energy and not back to electricity (e.g. several chemical technologies). 

  Response time is the time that the technology needs to provide its full power after standstill. 
  The Availability factor is defined as the time that the technology is able to produce or store 
electricity  throughout  a  certain  time  period.  The  availability  factor  describes  if  a  technology 
needs much time for maintenance or not. A high availability factor is favorable, ideal would be 
an availability factor of 100. 

  The Lifetime (years) is the time that the storage technology can operate without exchange of 
the major components. The lifetime in years may define the end of operation of a storage tech-
nology even though the maximum possible number of cycles is not reached yet. 

  The Number of cycles defines how many full load cycles the system can be operated before 
the end of life is reached. This metric is commonly used for battery technologies, but can be 
used for other storage technologies as well. For batteries, the end of life is commonly defined 
as having left 80% of the original storage capacity. 

  Regarding economic KPIs, first the CAPEX (€/kW) and the CAPEX (€/kWh) are described. For 
electrochemical technologies, the CAPEX is the total CAPEX of the system, once described per 
power and once per capacity. For all other technologies, the CAPEX is additional. That means 
that the power specific CAPEX needs to be added to the capacity specific CAPEX to get the total 
system CAPEX. The CAPEX values are described as ranges. These ranges are due to several cost 
differences for the systems: Larger storage systems have lower specific cost, smaller systems 
have  higher  specific  cost.  Also,  storage cost  may  differ  in  different  countries  of the EU,  e.g., 
labour  intensive  technologies  may  have  higher  cost  in  countries  with  higher  labour  cost.  In 
addition, cost may vary due to geological differences (as for pumped hydro storage) or different 
types of storage within one technology (such as tank storage or underground storage for hy-
drogen). 

  The  Typical  CAPEX  (€/kW)  and  Typical  CAPEX  (€/kWh)  are  meant  to  provide  a  mean  or 
average value for a certain technology. In many cases it is not easy to define this value as it 
depends e.g. on the size of the system. 

  The OPEX (€/kW / €/kWh / % of CAPEX) describes the per power or per electricity stored or 
annual cost of the technology. This typically includes operation and maintenance such as labour 
cost, exchange of components and fuels. 

  Critical raw materials used for each technology were listed. The definition of critical raw ma-

terials is used as defined by the European Commission2. 

2   European Commission (2020) Critical Raw Materials Resilience: Charting a Path towards greater Security and Sustainability. https://ec.eu-

ropa.eu/transparency/documents-register/detail?ref=COM(2020)474&lang=en. p. 3 

16 

 
                                                   
EnTEC – Study on Energy Storage 

  Regarding the use, it was distinguished between front of meter (FTM) and Behind the meter 

(BTM) storage. Some technologies may be used for both applications. 

  The storage services as described by EASE3 were listed in the data sheet and for each technology 
it was indicated whether the service can be provided by this technology (marked with an X) or 
not, or if the technology could provide parts of the described service, it was marked with an (X). 
  At the end of the excel table, major technological issues of each technology are indicated, 

such as maturity of the technology or geographical constraints. 

Excurse: Total Cost of Ownership – TCO  

In this work, the basic cost components of energy storage technologies are described. For invest-
ment decisions, methods for profitability analyses are necessary. A distinction can be made between 
static and dynamic methods. Static methods are used when small investment amounts or invest-
ments with a short useful life are involved. Static means that the timing of cash flows is not ac-
counted for in the profitability analysis. Costs and revenues are either considered for one year or 
average values are calculated for the entire period. This makes calculation simple and gives quick 
results. Static methods include comparative cost accounting, comparative profit accounting, com-
parative profitability accounting and static amortisation accounting. 

When making investment decisions, companies often use the “total cost of ownership (TCO)” as 
part of the comparative cost comparison to support the decision. The TCO refers to the lifetime 
cost associated with an asset. This means that the total cost of an asset is summed up over the 
lifetime of the asset. The TCO may comprise: 

 

Initial investment (CAPEX) including the main system, balance of system, cost, of land use, fi-
nancing cost etc. 
  Cost of installation 
  Cost of operation, e.g., fuel cost, cost of labour 
  Cost of maintenance, e.g., technical checks 
  Component replacement cost, e.g., battery replacement or engine refurbishment 
  Cost of disposal / savings by residual value of asset after time of use 

Companies may apply more or less detail in the analysis, e.g., cost of disposal or residual value are 
often not applied or irrelevant for certain assets. The TCO may differ extensively depending on the 
location, type of investor and other project-specific factors. The TCO can be used as a static or a 
dynamic method. 

The advantage of the TCO analysis is that it is a simple and easily understandable way to compare 
different solutions. It is more comprehensive than only looking at the investment cost, as also costs 
during operation are considered, and can therefore give more insights into the profitability of an 
energy storage technology. The TCO can be used to compare different storage options in the same 
application. A TCO is necessary for investment decisions, as all costs need to be taken into account. 
Also, the dynamic method should then be considered to account for changing prices and the time 
value of money. To evaluate the profitability of a concrete project, the revenues also need to be 
taken into account, i.e., the TCO needs to be complemented with an analysis of the market and 
achievable revenues.  

3   EASE (2022) https://ease-storage.eu/energy-storage/applications/ 

17 

 
                                                   
EnTEC – Study on Energy Storage 

2.1.2  Data analysis 

2.1.2.1  High level grouping of energy storage technologies 

For the simulation of energy storage technologies with the EC’s tool METIS4, a high-level grouping 
of the energy storage technologies was requested, reducing the amount of detail of the techno-
economic dataset. For this purpose, Table 2 shows a condensed version of energy storage technol-
ogies and their key indicators. 

Only technologies which are expected to be significant, i.e. adopted on a TWh-scale, up to 2050 are 
included. The focus is on electricity storage; thermal storage is not regarded. Very short-term stor-
age (e.g. flywheels) is not included as this time scale is not modelled in METIS. For home-storage 
systems and electromobility, the potential can be used to mandatory include these technologies in 
the model. Short-term is defined as duration of hours to a few days, medium-term as a few days to 
a week, and long-term as a few weeks to months. 

CAPEX, OPEX, efficiency and lifetime are defined as in Section 2.1.1. The loss rate is given in % loss 
per day or per month, depending on the technology. Potential is defined as the economic potential 
for each technology. More detailed data can be found in the excel documentation delivered with 
this report.  

Table 1 

High level grouping of energy storage technologies with data of end  2021  

long-term storage, large scale 
(hydrogen) 

medium-term storage, large scale 
(PHS) 

CAPEX 
[€/kW] 

CAPEX 
[€/kWh] 

OPEX 
[% of 
CAPEX] 

round trip 
efficiency 
[%] 

2979 

10 

30 €/MWh 

30 

1880 

470 

28 €/kW-year 

80 

short-term storage, large scale (LIB) 

1350 

short-term/long-term storage, large 
scale (Lead-acid batteries) 

1000 

345 

400 

Short-/medium-term storage, large 
scale (Redox-flow batteries) 

1500 

400 

short-term storage, large scale (So-
dium-based batteries) 

595 

675 

PV-home storage systems (LIB) 

1200 

1000 

Electromobility (LIB) 

75 pack 
cost, 

160 pack 
cost, 

0.5-1 

88-95 

1-2.5 

1 

1.5 

1-2 

2 

85 

70 

85 

88 

90 

Source: data collected by Fraunhofer ISE 

4   European Commission (2022) METIS. https://energy.ec.europa.eu/data-and-analysis/energy-modelling/metis_en 

18 

 
 
 
 
                                                   
EnTEC – Study on Energy Storage 

Table 2 

High level grouping of energy storage technologies with data of end 2021 

loss rate 
[% loss per 
day or per 
month] 

negligible 

lifetime 
[years] 

lifetime 
[cycles] 

potential up 
to 2050 
[TWh] 

255 

n.a. 

130 TWh6 

Long-term storage, large scale  
(hydrogen) 

14,000 

4 TWh8 

Medium-term storage, large 
scale (PHS) 

0.005-0.02% 
p.d.7 

Short-term storage, large 
scale (LIB) 

1% p.m. 

40 

15 

10 

20 

3000 

1500 

7000 

0.1-0.4% p.d. 

0.4% p.a. 

Short-term storage, large 
scale (Lead-acid batteries) 

Short-/medium-term storage, 
large scale (Redox-flow bat-
teries) 

Short-term / medium-term 
storage, large scale (Sodium-
based batteries) 

PV-home storage systems 
(LIB) 

0.34% p.a. 

15 

4500 

1% p.m. 

15 

3000 

Electromobility (LIB) 

1% p.m. 

8-15 

3000 

Source: data collected by Fraunhofer ISE 

min: 1.9 TWh 
max: 5.3 
TWh9 

10-100 
GWh10 

will be a share 
of the ESS LIB 
market 

will be a share 
of the ESS LIB 
market 

included in 
short-term 
storage LIB 
potential 

min: 27.3 
TWh 
max: 39.7 
TWh11 

5   Kharel, Subodh; Shabani, Bahman (2018) Hydrogen as a Long-Term Large-Scale Energy Storage Solution to Support Renewables. Energies 

2018, 11(10), 2825. 

6   Fuel Cells and Hydrogen Joint Undertaking (2019), Hydrogen Roadmap Europe. A Sustainable Pathway for the European Energy Transition. p. 

22. Source states 140 TWh for Europe – 90% is assumed to be on EU-grounds 

7   Fuchs, Georg; Lunz, Benedikt; Leuthold, Matthias; Sauer, Dirk Uwe (2015) Chapter 7 - Overview of Nonelectrochemical Storage Technologies. In: 

Electrochemical Energy Storage for Renewable Sources and Grid Balancing, 2015; Pages 89-102 

8   Gimeno-Gutiérrez, Marcos; Lacal-Arántegui, Roberto (2015) Assessment of the European potential for pumped hydropower energy storage 

based on two existing reservoirs. Renewable Energy Volume 75, March 2015, Pages 856-868 

9   Fraunhofer ISI, Internal database + forecast model, status May 2022. *Potential = Cumulated annual LIB demand from 2010-2030 (2010-2050 

10   Assumption by Fraunhofer ISI 

11   Fuchs, Georg; Lunz, Benedikt; Leuthold, Matthias; Sauer, Dirk Uwe (2015), Chapter 7 - Overview of Nonelectrochemical Storage Technologies. 

In: Electrochemical Energy Storage for Renewable Sources and Grid Balancing, 2015; Pages 89-102 

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EnTEC – Study on Energy Storage 

2.1.2.2 

 Batteries 

In  addition  to  the  high-level grouping, a  grouping of battery technologies  in relation to  storage 
services was prepared. The in-depth assessment is integrated into the use case matrix excel file as 
a worksheet and shown in Figure 2 The table illustrates which battery technology is suitable for the 
respective storage service application according to EASE classification. For this purpose, the energy 
storage duration from a short- (st) to long-term (lt) perspective for relevant battery technologies 
was set in relation to different storage size ranges. It can be seen that the Li-Ion battery is primarily 
suitable for short -term storage. In the case of the lead-acid battery, UPS and telecommunication 
were not taken into account (as these are auxiliary systems for emergency power), and can therefore 
be allocated to short- to medium-term storage services with a storage size range up to 1 MWh. 
The sodium-based batteries, operating at high temperature, are mainly suitable for medium-term 
storage services. If the technology develops further towards operation at room temperature, long-
term storage tasks will also become attractive for the technology. Redox flow batteries are par-
ticularly  suitable  for  large-scale  systems  that want  to  store  energy  in  the  medium  to  long  term 
duration. Small-scale short-term storage is technologically possible, but not economically compet-
itive with Li-ion batteries. 

Figure 2 

In-depth assessment of battery technologies for storage service applications 

Source: graph by Fraunhofer ISE 

20 

stmtltstmtltstmtltstmtlt< 100 kWhss-ss-pp-ps-100 kWh - 1 MWhss-ss-pp-ps-1 MWh - 1 GWhpp-ss-pp-ps-< 100 kWh------------100 kWh - 1 MWhpspssspsppss1 MWh - 1 GWhpspssppsppss< 100 kWh-sp-ss-sp-ss100 kWh - 1 MWh-sp-ss-sp-ss1 MWh - 1 GWh-sp-sp-sp-ss< 100 kWhsppsssssppss100 kWh - 1 MWhsppsssssppss1 MWh - 1 GWhpppsspssppss< 100 kWhsspsssppuppp100 kWh - 1 MWhsspsssppupsp1 MWh - 1 GWhpppsspppupss< 10 kWh---ssp------< 100 kWh---ssp------Legendsuitable: possible: unsuitable:not existing:Storage Service ApplicationsStorage size range (st = short-term storage, mt = mid-term storage, lt = long-term storage)Lead-acid batteriesLi-ion batteriesSodium-based batteries 5)Redox-Flow batteries (6 Generation Support Services and Bulk Storage Services 1)Services to Support Transmission Infrastructure 2)Services to Support Distribution Infrastructure 3)Ancillary ServicesServices to Support Behind the Meter Customer Energy ManagementVehicle-to-Grid (V2G) 4)The technology represents a common solution for the service or or is a promising option for the near future.The technology is (still) limited for the service or is mainly not used for this purpose, even if it is technologically possible. Nevertheless, the technology is used in some cases.The technology is rather less to not suitable for the service. Through further research & development, however, it could be an option in the distant future.The technology doesn´t exist. 
 
EnTEC – Study on Energy Storage 

2.1.2.3  Power and energy ranges of different storage technologies 

Figure 3 shows the energy and power ranges of different storage technologies. Technologies with 
high  power  and  smaller capacity can  be  considered  short-term  storages  such  as capacitors,  fly-
wheels and to some extent batteries. Batteries can also range in the higher power and higher ca-
pacity area to compete with pumped hydro and compressed air. Hydrogen and synthetic methane 
can be considered long-term energy storage technologies with high energy capacities. 

Figure 3 

Power and energy ranges of different storage technologies 

2.1.2.4  Long-term and short-term energy storage technologies 

Figure 4 shows the capital cost of power and cost of energy for different storage technologies. The 
graph shows that the cost of each technology can give an indication of the competitiveness of the 
technology in a certain application, e.g. longer duration use and shorter duration use. If a technol-
ogy has a  high cost  per unit  of  power but a  low cost  per  unit  of  energy, it  is  more  likely to be 
competitive in long-term energy storage applications. Pumped hydro, Compressed Air Energy Stor-
age, Pumped Thermal Energy storage and Compressed Hydrogen Storage fall into this category. 
Technologies  which  have a  low  cost  of  energy  but  higher cost  per power are  more  likely to  be 
competitive for short-term energy storage. Advanced lead acid batteries, flow batteries and Sodium 
fall into this category. Lithium Ion Batteries with relatively low cost for energy and power may fall 
into  both  of  these  categories  in  some  applications,  depending  on  the future  cost  development. 
Technologies  with  higher  cost  for  power  and  energy  will  need  to  reduce  cost  to  be  able  to  be 
competitive in either of the two applications. 

21 

 
 
EnTEC – Study on Energy Storage 

Figure 4 

Capital cost of power and energy for different technologies12 

12   NREL (2022) Storage Futures Study - Key Learnings for the Coming Decades, p. 6 

22 

 
 
 
 
                                                   
EnTEC – Study on Energy Storage 

2.1.2.5  Technology readiness level 

Figure 5 shows the TRL of the analysed energy storage technologies, grouped by technology type. 
It can be seen that in every type of technology, there are sub-technologies which reach a TRL of 9, 
a system proven in operational environment. Also in every group, there is still research and devel-
opment of new technologies. Further development is therefore to be expected. 

Figure 5 

TRL of energy storage technologies  

Source: graph by Fraunhofer ISE 
Abbreviations: Pumped Hydro Storage (PHS), Pumped Heat Electrical Storage (PHES), Adiabatic Compressed Air Energy Storage 
(A-CAES), Diabatic Compressed Air Energy Storage (D-CAES), Liquid Air Energy Storage (LAES), Sodium Sulphur batteries (NaS) 
Sodium Nickel Chloride batteries (NaNiCl, ZEBRA), Lead Acid batteries (LAB), Lithium-ion batteries (LIB), Lithium-Metal inorganic 
(SSB), Sodium-ion (SIB), Redox flow - Vanadium (VRFB), Redox flow - Iron (IRFB), Superconducting Magnetic Energy Storage 
(SMES), Power to Hydrogen with polymer electrolyte membrane electrolysis or solid oxide electrolysis (PtH2 (PEMFC, SOFC)), 
Power to Ammonia with polymer electrolyte membrane electrolysis or solid oxide electrolysis (PtNH3 (PEM, SO)),  
Power to Methane with polymer electrolyte membrane electrolysis or solid oxide electrolysis (PtCH4 (PEM, SO)), 
Power to Methanol with polymer electrolyte membrane electrolysis or solid oxide electrolysis (PtCH3OH (PEM, SO)), 
Power to Methanol to Gasoline with polymer electrolyte membrane electrolysis or solid oxide electrolysis (PtF (PEM, SO)), Sensi-
ble Thermal Energy Storage (STES), Thermo Chemical Storage (TCS), Phase Change Material (PCM) 

2.1.2.6  Dependency on critical raw materials 

Figure 6 shows the need for critical raw materials as defined by the European Commission13 for 
different  energy  storage  technologies.  For  electrical  and  thermal  energy  storage,  no  critical  raw 
materials are needed. Mainly electrochemical technologies depend on critical raw materials, even 
though there are some technologies such as sodium sulphur batteries, sodium nickel chloride bat-
teries  and  other,  which  do  not  depend  on  critical  raw  materials.  Lithium  Ion  batteries  have  the 
largest need for critical raw materials. Regarding chemical energy storage, the need for critical raw 
materials  is  by  the  electrolyser,  in  the  graph  the  materials  for  Alkaline  and  PEM  electrolysis  are 
given. 

13   European Commission (2020) Critical Raw Materials Resilience: Charting a Path towards greater Security and Sustainability. https://ec.eu-

ropa.eu/transparency/documents-register/detail?ref=COM(2020)474&lang=en. p. 3 

23 

 
 
                                                   
EnTEC – Study on Energy Storage 

Figure 6 

Need for critical raw materials by technology (graph by Fraunhofer ISE) 

2.1.3  Use cases for energy storage 

In this section use cases for energy storage will be described. Use cases are defined as the combi-
nation of selected technologies, the potential services where they could be used and the different 
actors which can offer the service. Thus, one technology can be used in different services, or in one 
service but by different actors. 

Table 3 gives an overview on the analysed services, taken from the EASE characterisation of storage 
applications14, and the minimum technical characteristics which a technology needs to have in order 
to provide a certain service. Some requirements exclude some technologies from the participation 
in a certain service, such as the fact that services to support distribution infrastructure require a 
storage duration of one or more hours, excluding e.g. flywheels from that service. 

Table 3 

Service 

Key technical characteristics for services provided by energy storage technol-
ogies  

Minimum technical requirements 

Generation Support Services and Bulk Storage 
Services 

storage duration of minutes to several hours 

Services to Support Transmission Infrastructure 

ramp-up within milliseconds or minutes 

Services to Support Distribution Infrastructure 

storage duration of one or more hours 

Ancillary Services 

no special requirements 

Services to Support Behind the Meter Customer 
Energy Management 

power installed capacity starting from 100 
kW 

Source: (EASE, 2022) 

14   EASE (2021) European Energy Storage Market Report. https://ease-storage.eu/publication/emmes-5-0-march-2021/ 

24 

 
 
                                                   
EnTEC – Study on Energy Storage 

Figure 7 shows the matrix of use cases. This matrix gives an overview on the use cases and possible 
actors. For more detail on the services each technology can provide, please refer to the techno-
economic information described in Section 2.1. 

Actors are described with a focus on those providing the service. Actors profiting from the services, 
such as e.g., energy producers, Transmission System Operators (TSOs), industry and prosumers, do 
so independent from the type of storage providing the services, therefore they are not included in 
the analysis. 

In general, most technologies can provide most services. Actors offering these services are mainly 
bound to the service; for example, services to support behind the meter customer energy manage-
ment are more likely provided by industrial clients, aggregators and Distribution System Operators 
(DSOs), independent from the type of technology which can provide the service. On the other hand, 
energy suppliers and TSOs are more present in the services to support transmission infrastructure 
and DSOs more present in the services to support distribution infrastructure. 

Figure 7  

Use cases and actors for high-level grouping of storage technologies  

Source: graph by Fraunhofer ISE 

2.1.4  Global figures (Europe) 

Electricity storage 

The  annual  European  energy  storage  market  has  seen  an  increase  in  installed  capacity  from 
0.6 GWh in 2015 to about 9.4 GWh in 2022. The EU countries encompass roughly 80% of this mar-
ket. Between 2021 and 2022 the market has doubled. About 30% of the 2022 market was residential 
storage, roughly 2% were Commercial and Industrial (C&I) storage and about 70% front-of-meter 

25 

 
 
EnTEC – Study on Energy Storage 

installations. The European Energy Storage Market Report by EASE provides EU data on the devel-
opment of energy storage technologies in the EU countries. Therefore, this report does not focus 
on this topic in much detail.15 In year 2021, about 3 GW of new battery storage was installed and in 
2022 it is expected to reach about 5 GW (see also Figure 8). Additionally, there is about 40 to 44 
GW of installed pump hydro power installed in Europe. Also thermal energy storage, mainly molten 
salt storage in concentrated solar power plants (CSP) in Spain, contributes with a capacity of about 
6.8 TWh to the electricity system in Europe.16 

Figure 8 

Annual European energy storage market forecast (MWh)17 

Source: 6th edition of the EASE/Delta-EE European Market Monitor on Energy Storage (EMMES), updated for 2022  

Thermal energy storage 

Summary overviews and outlooks on the limited data available for thermal energy storage have 
been published, notably by IEA ECES in 201818 and IRENA in 202019. Central differentiation of ther-
mal  storage  is  the  technical dimension  into: Sensible heat  storage,  latent heat  storage,  thermo-
chemical heat storage.  

Regardless of this, no valid data on overall installed thermal energy storage systems in the EU area 
could be collected during the analysis. Taking district heating applications as an example, this could 

15   EASE (2021) European Energy Storage Market Report. https://ease-storage.eu/publication/emmes-5-0-march-2021/ 

16   IRENA (2020), Innovation Outlook: Thermal Energy Storage. 

17   EASE (2021) European Energy Storage Market Report. https://ease-storage.eu/publication/emmes-5-0-march-2021/ 

18   IEA-ECES (2018), Applications of Thermal Energy Storage in the Energy Transition – Benchmarks and Developments 

19   IRENA (2020), Innovation Outlook: Thermal Energy Storage. 

26 

 
 
                                                   
EnTEC – Study on Energy Storage 

be due to the locally organised and little regulated heating market. In this area, thermal energy 
storage systems are not subject to mandatory registration and therefore do not have to be reported 
to any authority or other organisation. As a consequence, little valid data is available and no con-
crete statement, e.g. on the market situation, can be made within the scope of the study. Conclu-
sions for further developments can only be drawn to a limited extent from existing data on thermal 
storage products sold20, without knowing the concrete need in various sectors. In view of the need 
for further research  on thermal energy  storage  systems, the collection of this data could be the 
focus of a EU-wide study. 

Although data is scarce, it is clear that storage capacities involved are huge. Just looking at solar 
thermal-related TES, Europe had 189 GWh stock in 2020 in Europe according to Solar Heat Europe 
(+/-10  millions  of  200-300l  storage)21.  This  is  followed  by  quick  increase  in  deployment  of heat 
pumps coupled with storage. The biggest TES stock is still related to e-boilers: there are tens of 
millions of storage of at least 100l each in France, given nuclear electricity legacy. And the use of e-
boilers is by far not limited to France. This all is supplemented by district heating and industry-scale 
storages, which  should  at least  to some  extent  be reflected  in the Thermal energy storage map 
referred to in the Celsius project. In the electricity sector, the EU has at least 6.8 GWh of thermal 
storage related to CSP plants in Spain and the used molten salt technology is being gradually ad-
justed for the wider needs of RES-E storage (also PV and wind).22 

Electric boilers, together with thermal storage, start being used to integrate excess renewable elec-
tricity, e.g. in Germany. 

Some publications include global figures on thermal energy storage. In part, these are based on 
estimates and do not cover an important segment: domestic hot water tanks. For example, in an 
IRENA  study  from  202023,  current  global  TES  storage  capacities  for  heating  applications  are  as-
sumed as follows: 

  Buildings (excluding domestic hot water tanks) = 91 GWh 
  District heating = 105 GWh 
 

Industry = 2 GWh 

In addition, storage capacity for space cooling is assumed to increase from 14 GWh in 2030 to 26 
GWh in 2030. 

According  to  the  study,  the  required  storage  capacities  for  Molten  Salt's  storage  for  the  power 
sector will increase from 21 GWh to 491-631 GWh in the same period in order to meet the amount 
of storage capacity IRENA assumes to be able to comply with the Paris Agreement. 

Based on a data collection of publicly available projects, the IRENA study assumes over 234 GWh 
of thermal energy storage across the globe in 2019 (not counting domestic hot water tanks). For 
IRENA's  Paris  Agreement-aligned  Transforming  Energy  Scenario,  an  increase  to  800  GWh  is  re-
quired by 2030.  

20   Grand View Research (2020), Thermal Energy Storage Market Size, Share & Trends Analysis Report, https://www.grandviewresearch.com/indus-

try-analysis/thermal-energy-storage-market 

21   Solar Heat Europe (2021), Thermal Energy Storage: A game changer for heat decarbonisation. 

22   IRENA (2020), Innovation Outlook: Thermal Energy Storage. 

23   IRENA (2020), Innovation Outlook: Thermal Energy Storage. 

27 

 
                                                   
EnTEC – Study on Energy Storage 

At the Energy  Storage  Global Conference (ESGC) organised by EASE, Solar Heat Europe made a 
presentation24 in which a conservative estimate of the domestic solar heat systems with TES units 
installed in Europe was summarised to a total storage capacity of over 180 GWh in 2020. 

In view of the decarbonisation of the energy system, underground thermal energy storages (UTES) 
in connection with district heating could play a special role, especially against the background of 
flexibilisation. 

A potential long-term scenario described by Victoria et al25, a total storage capacity of 224 TWh is 
derived for large-scale thermal storages in the European area in a long-term. This concerns in par-
ticular the member states where district heating plays a key role. The assumptions include an in-
creasing supply of renewable energy and assume an increase from 602 TWh/year to 1096 TWh/year 
in an ambitious scenario in which 50% of the heat demand is to be covered by district heating by 
2050.26 

While hot-water based technologies are broadly used, they don’t and can’t satisfy all needs for TES, 
especially the need for compact long-term storage as well as high temperature storage needs for 
industry and power sector. Conventional solar thermal and heat pump systems coupled to water 
tanks have high land/space footprint. Therefore, research should continue on TES, as recently high-
lighted by IRENA and EU’s Renewable heating and cooling platform. 

2.1.5 

Facilities data 

The “facilities data” sheet in the corresponding excel document to this text (see Annex 2.1 Energy 
Storage  Database)  contains  a  non-exclusive  list  of  current  electricity  storage  facilities  in  the  EU 
countries (data for Latvia and Malta missing). The former list was updated by using the DOE Global 
Energy Storage Database27 and checking for updates to the old version. 179 datasets were added 
or updated. 

Figure 9 shows the distribution of technologies in the collected data set. Mechanical storage sys-
tems make up the main share of installed power, energy capacity and number of projects. As me-
chanical storage systems often have large power and energy capacity, the share in the number of 
projects is lower; here large numbers of electrochemical projects can be seen. Among the other 
technologies, electrochemical and thermal energy storage systems make up large shares. Also hy-
brid projects make up a large share. 

However, it is to be noted that the data set is not complete. In some cases, only the installed power 
is named but no energy capacity, in other cases only the energy capacity is named while the in-
stalled power is lacking. This may lead to distortions in the results shown. 

24   Solar Heat Europe (2021), Thermal Energy Storage: A game changer for heat decarbonisation. 

25   Victoria et al. (2019), The role of storage technologies throughout the sector-coupled European energy system. 

26   Heatstore (2021), Roadmap for flexible energy systems with underground thermal energy storage towards 2050. 

27   DOE (2022) Global Energy Storage Database. https://sandia.gov/ess-ssl/gesdb/public/ 

28 

 
                                                   
EnTEC – Study on Energy Storage 

Figure 9  

Distribution of a) power [MW], b) energy capacity [MWh] and c) number of 
projects by storage technology [-]  

76887

5977

1932 1241

2469

82

253

1561964

13823

9038

3518

68

171

1028

386

313

78

37

15

7

19

Chemical

Thermal

Electrochemical Hybrid

Undefined

Mechanical

a)

b)

c)

Figure 10 shows the distribution of energy storage by country. Depending on if the differentiation 
is done by power, by energy capacity or by number of projects, a different picture can be seen: 
Power-wise, Spain and Germany have the largest amount of storage systems; if differentiated by 
energy capacity, Portugal is the leader. Regarding the number of projects, Germany and Spain have 
the largest values. However, this is also largely due to lack of data in the database: for electrochem-
ical projects in Ireland for example, power installed energy capacity is well documented while the 
energy capacity value is only available for three projects. The Irish share is therefore underestimated 
in the energy capacity related graph. 

29 

 
 
 
 
EnTEC – Study on Energy Storage 

Figure 10  

Distribution of energy storage a) power [MW], b) energy capacity [MWh] 
and c) number of projects by countries [-] (May 2022) 

a) 

b) 

859213 

30 

 
 
 
EnTEC – Study on Energy Storage 

c) 

Figure 11 gives a more detailed picture for the special distribution of the single technologies. De-
pending on if power, energy capacity, or number of projects are looked, at, the picture changes. 
This again is due to partial lack of data. However, it can be seen that a larger variety of countries is 
given in the case of mechanical storage systems: Many countries have mechanical energy storage 
systems, while e.g. chemical energy storage is concentrated in France and Germany. 

Figure 11  

Distribution of energy storage a) power, b) energy capacity and c) number of 
projects by country 

Relative distribution of installed power

100%

80%

60%

40%

20%

0%

a) 

Others

Spain

Portugal

Italy

Ireland

Greece

Germany

France

31 

 
 
 
 
EnTEC – Study on Energy Storage 

Relative distribution of installed capacity

100%

80%

60%

40%

20%

0%

100%

80%

60%

40%

20%

0%

b) 

c) 

Relative distribution of installations

Others

Sweden

Spain

Portugal

Italy

Germany

France

Austria

Others

Spain

Portugal

Italy

Ireland

Greece

Germany

France

Figure 12 shows the three largest projects per technology in terms of power. Many of these projects 
are only announced some under construction, submitted or operational. The projects are concen-
trated on four countries: Spain, Germany, Ireland and Greece. In Germany, the three largest chem-
ical storage plants are announced with 100 / 50 MW each. Large thermal projects are operational 
or planned in Spain and Greece. Large mechanical projects (all pumped hydro storage) are in op-
eration or announced in Spain. 

32 

 
 
 
 
 
EnTEC – Study on Energy Storage 

Figure 12 

Three largest projects per technology 

Source: graph by Fraunhofer ISE 

Table 4 

Three largest projects per power per technology 

Country  City/location 

Facility Name 

Technology 

Power 
(MW) 

Energy 
capacity 
(MWh) 

Germany  Lower Saxony 

Hybridge 

Chemical - P2G 

Germany  Diele 

Element One 

Chemical - P2G 

Germany  Brunsbüttel 

HySynGas 

Spain 

Teruel 

Teruel 

Ireland 

Kellis 

Kellistown Energy 
Storage 

Ireland 

Derrycarney 

Lumcloon BESS 

Spain 

Spain 

Spain 

Mont-Negre  

Mequinenza 

Cortes-La Muela 

La Muela 

Girones  

Girones  

Greece 

Atherinolakos 

MINOS 

Spain 

Aldeire Granada  Andasol-3 

Spain 

Morón de la 
Frontera Sevilla 

Arenales 

Chemical - P2G 
Electrochemical - 
Battery 
Electrochemical - 
Battery  
Electrochemical - 
Battery  

Mechanical - PHS 

Mechanical - PHS 

Mechanical - PHS 
Thermal -  
Molten salts 
Thermal -  
Molten salts 
Thermal -  
Molten salts 

100 

100 

50 

159.3 

100 

100 

3300 

2000 

2000 

52 

50 

50 

33 

Date of 
commis-
sionning 
2023 

2022 

2020 

2020 

2013 

2027 

2020 

75110 

260 

375 

2011 

350 

2013 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EnTEC – Study on Energy Storage 

2.1.6 

Behind-the-meter data 

For all EU-27 countries, the former list of current installed “behind-the-meter storage” was updated. 
It is striking that current and accurate data could only be found for individual countries. One of the 
most accurate data sets is available for Germany. The ISEA of the RWTH Aachen University is inves-
tigating  the  BTM capacities  installed  annually  in  Germany.28  It  is  advantageous  that  in  Germany 
(almost) all behind-the-meter storage installations must be entered in a market register of the Ger-
man Federal Network Agency and the Federal Motor Transport Authority. Germany has the largest 
installed BTM capacity in Europe with 4.4 GWh (April 2022). For other countries, the best data could 
be obtained partly from the storage association (EASE), market research institutes or national en-
ergy authorities. With the expected increase in BTM storage, it should be considered for future data 
collection to set up a European register and also to conduct interviews with relevant institutions. 

2.2 

Alternative flexibility solutions 

Flexibility  in  the  electricity  sector  is  usually  referred  to  as  “the  possibility  to adjust  the  electrical 
consumption or the electrical production of an installation or process”29. Energy storage is only one 
of several flexibility solutions. This section gives a broader view on flexibility and puts storage into 
perspective. There are four main types of flexibility in energy systems30: 

  Flexible generation 
  Demand side management 
  Energy storage 
 

Interconnections 

Today, flexibility is mainly provided by the supply side, namely thermal power plants. Due to the 
goal of decarbonisation, flexibility will need to be mainly provided by renewable energy technolo-
gies, demand side management, energy storage and interconnectors in the future. 

All four flexibility options will interact in the future to balance supply and demand in the European 
energy system. This section will focus on the three options apart from storage: the flexible genera-
tion, looking at the supply-side in Section 2.2.1, interconnectors in Section 2.2.2 as well as demand 
side management in Section 2.2.3. For each flexibility option, cost, potential as well as barriers and 
enablers will be explained. Section 2.2.4 will then give an overview and comparison of the discussed 
topics. 

2.2.1 

Supply-side 

Supply-side flexibility refers to the flexibility of energy generation technologies. In literature, also 
the  term  “dispatchable  power  plants”  is  used.  As  demand  has  always  been  variable,  generation 
technologies have always been providing flexibility to balance supply and demand31. However, with 
more volatile renewable energy technologies in the system and a reduction of flexible generation 
technologies such as thermal power plants driven by fossil fuels, the demand for flexibility rises. 

Flexible generation technologies are typically fossil fuel driven thermal power stations, such as coal 
fired steam turbines, gas turbines, nuclear power plants and waste incineration. Renewable thermal 

28   Figgener, Jan, et al. "The development of battery storage systems in Germany: A market review (status 2022)." arXiv preprint arXiv:2203.06762 

(2022). 

29   Next Kraftwerke (2022): What is Flexibility in the Electricity Sector? https://www.next-kraftwerke.be/en/knowledge-hub/flexibility-electricity-

sector/ 

30   EnTEC (2022) Digitalisation of Energy Flexibility, p. 16 

31   IRENA (2019) Flexibility in conventional power plants – Innovation landscape brief 

34 

 
                                                   
EnTEC – Study on Energy Storage 

technologies include biogas, geothermal power, concentrating solar power and hydrogen burnt in 
gas  turbines. Reservoir  hydropower  can also provide  substantial  amounts  of flexibility.  To  some 
extent,  also  volatile  renewable  energy  technologies  such  as  photovoltaics  and  wind  energy  can 
provide flexibility, by throttling the power output. This can be done by either switching off single 
power plants or by reducing the amount of grid feed-in partly. Usually, the grid operator has access 
to larger plants and can regulate them down by radio ripple control signal. Ripple control signals 
can be transferred directly via the electricity grid and do not need an additional communication 
network.  In  many  cases  curtailment  of  renewable  energy  is  necessary  to  avoid  grid  congestion, 
which is also a form of flexibility. This however should be one of the last options as this means that 
low-cost  and  low-emission  energy  is  dumped.  Therefore,  flexibility of  volatile  renewable energy 
technologies is not discussed as flexible generation in this section. 

To provide flexibility, power stations need to run in part load to be able to react quickly to needed 
load  changes32.  Ramp  rates  and  start-up  times  of  thermal  power  plants  may  be  long  (several 
minutes for a state-of-the-art open cycle gas turbine but up to two hours for a state-of-the-art hard 
coal-fired power plant33). However, by retrofitting conventional power plants can be made more 
flexible34. On the path to decarbonisation, hydropower plants, gas turbines and biomass electricity 
plants  will  provide  important  amounts  of  supply-side  flexibility  in  Europe35.  Volatile  renewable 
plants can contribute to short-term flexibility. 

Cost 

The cost of supply-side flexibility depends strongly on the technology and the business model that 
the operator  uses.  Thermal  power  plants  usually  operate  as generation  technology  and  provide 
flexibility as an additional asset, so the cost for the flexibility is hard to determine. A look at the 
markets in which these technologies can participate can be useful. Flexibility is offered at the spot 
market as well as the reserve markets. However, it is to be noticed that the prices on spot market 
and  reserve markets  are  driven  not  only  by  supply-side  flexibility  but  also  by  electricity  storage 
taking  part  in  these  markets.  In  addition,  the  market  values  reflect  the prices,  not  the cost.  This 
means that effects of supply and demand shortages, hedging and other effects influence the price 
while the cost may not vary. E.g. for frequency response reserve, the 52-week-average price be-
tween 2014 and 2022 ranged between about 1,500 and about 4,000 €/MW/week for bids from the 
German market36. Prices for positive automatic frequency restoration reserve (aFRR) power have 
been varying between 100 and 3000 €/MW/week for power37. Prices have been varying strongly 
especially in the year 2020. Volatility has since then decreased only slightly. For further detail on 
the market options see Chapter 2 of this report. 

32   Grunewald, Philipp (2016) Flexibility in supply and demand. Paper prepared for DEMAND Centre Conferences, Lancaster, 13-15 April 2016 

33   Agora Energiewende (2017) Flexibility in thermal power plants – With a focus on existing coal-fired power plants 

34   IRENA (2019) Flexibility in conventional power plants – Innovation landscape brief 

35   European Union (2016) EU Reference Scenario - Energy, transport and GHG emissions - Trends to 2050 

36   Regelleistung-Online (2022) Leistungspreise – PRL – Aktuelle Leistungspreise. https://www.regelleistung-online.de/prl/leistungspreise/. 

Checked on April 27,2022 

37   Regelleistung-Online (2022) Leistungspreise – SRL/aFRR – Aktuelle Leistungspreise. https://www.regelleistung-online.de/srl/leistungspreise/. 

Checked on April 27, 2022 

35 

 
                                                   
EnTEC – Study on Energy Storage 

Potential 

The technical potential for flexible generation is huge, if fossil driven technologies are included. If 
only renewable energy technologies are included, the potential of hydroelectricity, geothermal en-
ergy and burning biogas and hydrogen in gas turbines need to be accumulated. The potential for 
pumped storage hydroelectricity in Europe is estimated to be about 29 to 80 TWh, of which 4 to 
33 TWh  lie in  the EU, depending  on  the  typology of the system38. The  potential for geothermal 
energy  is  estimated  to  be  80  to  100  GWe;  however,  the  long  term  goal  is  to increase  electricity 
39. The potential for gas turbines driven by 
production from geothermal energy up to 15-30 GWe
biogas and hydrogen is practically not limited (apart from resources and production capacity). This 
will rather be a matter of how to produce the amount of hydrogen and how to use it. 

The potential for flexibility from virtual power plants in 2050 is estimated to be 180 GW (164 GW 
for intraday spot market, 16 GW for ancillary services (balancing reserves)). If VPPs for further uses 
are also counted, 184 GW for VPPs for congestion management (1 GW), for critical grid situations 
(39 GW) for internal balancing (80 GW) and for exploitation of limited grid capacities (64 GW) in-
crease the total potential in  2050  to  364 GW.40  Of course, these numbers are not  to be  seen as 
additional to the numbers above, as virtual power plants can combine volatile renewable energies 
with e.g. biogas power plants or hydroelectric power. 

To understand the magnitudes, the EU reference scenario for 2050 is taken as an example41: This 
could include roughly 100 GW gas fired power plants, 140 GW hydro generation, 55 GW nuclear, 
45 GW biomass/waste plant capacities. This means that about a quarter of the installed power ca-
pacity of 1390 GW will be somewhat flexible in its generation. These generation technologies will 
provide about 40% of the electricity generation. The potential is of course higher, but the scenario 
shows that flexible generation, mainly provided by gas power plants and biomass electricity plants, 
will play a major role in the future energy system. Also, newer plans by the EU include larger shares 
of PV42 and wind energy43, however, the potential of flexible generation is large. 

Challenges and enablers 

Barriers can be technological, technical, economic, social/behavioural as well as regulatory. There 
are rather few barriers for supply-side flexibility, as this has been the main solution in the past and 
present European energy system. 

The market for supply-side flexibility, namely spot market and reserve markets, have been in place 
for a long time and has proven valuable to the energy system. The implementation project “Inter-
national Grid Control Cooperation (IGCC)” is a Europe-wide attempt to reduce system imbalances 
by international cooperation. The balancing markets can be considered as enablers for the support 
of supply-side flexibility, as supply and demand are met and the market thus functions. 

A technological challenge for supply-side flexibility provided by renewable energy is the cost: Pri-
mary energy, which comes without cost, is lost when volatile renewable energy technologies are 
dispatched for congestion management. Depending on the cost of renewable energy compared to 

38   JRC (2013) Assessment of the European potential for pumped hydropower energy storage - A GIS-based assessment of pumped hydropower 

storage potential. P. 33 

39   Geothermal ERA-NET (2022) Geothermal Energy. http://www.geothermaleranet.is 

40   EnTEC (2022) Digitalisation of Energy Flexibility, pp. 20 

41   EUROPEAN COMMISSION (2021) EU Reference Scenario 2020 - Energy, transport and GHG emissions - Trends to 2050. p. 81 ff.  

42   EC (2022) REPowerEU: A plan to rapidly reduce dependence on Russian fossil fuels and fast forward the green transition. https://ec.eu-

ropa.eu/commission/presscorner/detail/en/IP_22_3131 

43   EC (2022) Boosting Offshore Renewable Energy for a Climate Neutral Europe. https://ec.europa.eu/commission/presscorner/de-

tail/en/IP_20_2096 

36 

 
                                                   
EnTEC – Study on Energy Storage 

other flexibility  options, this  may  be  a  costly  option  to  avoid.    Alternatives are the extension  of 
interconnectors and the use of storage systems to prevent these losses. 

A technological challenge for fossil flexibility technologies is the CO2 emissions and decarbonisation 
goals. In the long run, fossil flexibility solutions will need to be replaced by renewable technologies. 
Challenges for renewable technologies are that providing flexibility always means that the available 
primary energy is not used. The loss in provided energy must therefore be rewarded by the market 
with an incentive for providing flexibility. 

SmartGrids are an enabler for supply-side flexibility, as they facilitate information on the demand 
in real-time and make power generation adaptation possible. On the other hand, a barrier in that 
context is that real markets for regional flexibility are still missing. 

2.2.2 

Interconnections 

An interconnector is a power line connecting the electricity grids of two countries. Interconnectors 
can therefore connect regions of high demand with regions of high electricity generation and bal-
ance supply and demand on a short time scale. Strictly speaking, interconnectors themselves do 
not provide flexibility, but are often considered as such as they connect storage systems, supply-
side flexibilities and other sources of flexibility with  the local demand.  Interconnectors therefore 
connect countries with the flexibility of other countries.44 In 2020, 80 GW of interconnectors were 
in operation in Europe45.  

Cost 

The cost of interconnectors mainly depends on the type of interconnector, on the operating voltage 
level, the number of circuits and the length. Costs for overhead lines range between 150,000 and 
140,000 €/km. Underground cables are more expensive with 450,000 to 590,000 €/km. Subsea ca-
bles cost ranges between 700,000 and 1,100,000 €/km.46 

Brown et al.47 assume values based on power and length of 445 €/MWkm for AC overhead lines, 
400 €/MWkm for DC overhead lines and 1100 €/MWkm for DC submarine cables. The DC converter 
pair is assumed to cost about 150,000 €/MW. This data is from 2015, so today cost may be even 
higher. 

Materials and manufacturing contribute to about half of the cost for aboveground cables and al-
most 60% for underground cables. Installation and civil works make up another third of the cost; 
the rest is engineering and commissioning, project management, regulatory consents, studies etc.48 

The European Commission supports the expansion of the European electricity network with grants 
from the Connecting Europe Facility (CEF) and the European Structural and Investment Funds (ESIF).  

44   Grunewald, Philipp (2016) Flexibility in supply and demand. Paper prepared for DEMAND Centre Conferences, Lancaster, 13-15 April 2016 

45   Entso-e (2021) Ten Year Network Development Plan – Completing the map – Power system needs in 2030 and 2040. 

46   ACER (2015) Report on unit investment cost indicators and corresponding reference values for electricity and gas infrastructure – Electricity 

infrastructure. Pp. 11 

47   Brown, Tom; Schierhorn, Peter-Philipp; Tröster, Eckehard; Ackermann, Thomas (2015) Optimising the European transmission system for 77% 

renewable electricity by 2030. IET Renewable Power Generation. doi: 10.1049/iet-rpg.2015.0135 

48   ACER (2015) Report on unit investment cost indicators and corresponding reference values for electricity and gas infrastructure – Electricity 

infrastructure. Pp. 12 

37 

 
                                                   
EnTEC – Study on Energy Storage 

Potential 

Theoretically, the technical potential to add interconnectors is huge. The main restrictions are long 
lead-times of the projects and public acceptance. In the following, the focus will therefore be on 
the targets in the EU. 

The Ten Year Network Development Plan (TYNDP), provided by ENTSOE-e in 2021, describes the 
future plans for interconnectors in Europe: By 2025, about 35 GW new cross-border enforcements 
are planned, and some are under construction already. By 2030, 50 additional GW would be cost-
efficient to support the system, according the ENTSOE-e’s study results. Slightly more than half of 
these could be covered by existing projects, the rest is conceptual. By 2040, an additional 43 GW 
are estimated to be necessary. 14 GW of these are already concrete TYNDP projects.49 

The EU has set interconnection targets for its Member States. The targets are defined by the share 
of the electricity produced in a country’s territory that can be transported across the borders to 
neighbouring countries. Up to 2030, the target is set to at least 15%50. The 2020 target was 10%. 
To help achieve these targets, an expert group on electricity interconnection was set up in 2016.51 

Challenges and enablers 

A technological barrier of interconnectors are their high costs and high effort for the implementa-
tion of such projects. 

The main technical barrier to building new interconnectors is long lead times for installations. From 
planning to start of operation ten to twenty years may pass. One main obstacle is lengthy permit 
granting procedures. The regulation on the trans-European networks for energy (TEN-E) sets EU 
guidelines for new energy infrastructure. In the current process of revision of this regulation, strict 
time limits for permitting procedures are therefore planned52. 

Environmental issues such as air pollutant emissions, water pollution, solid waste, land-use, wild-
life/biodiversity impacts and human health impacts are another obstacle for interconnectors53. To 
exclude as many of these issues as possible also contribute to the lengthy permit granting proce-
dures. 

A social barrier for the implementation of interconnectors is the low level of public acceptance for 
large infrastructure projects and grid projects in general. An enabler here would be to inform the 
public and industry about the benefits of electricity interconnectors54. The TEN-E regulations also 
contain rules on transparency to ensure involvement of citizens in the planning process. 

2.2.3  Demand-Side  

Demand side flexibility is commonly defined as the ability to adapt demand configurations by re-
ducing, increasing, or shifting a portion of demand over a specified time period in response to price 
or activation signals in order to provide a service toward energy system stability and security while 
remaining cost effective55. In this section, demand side solutions to provide flexibility to the system 

49   Entso-e (2021) Ten Year Network Development Plan – Completing the map – Power system needs in 2030 and 2040. 

50   EU (2018) Regulation 2018/1999.  (6) 

51   European Commission (2022) Electricity interconnection targets. https://energy.ec.europa.eu/topics/infrastructure/electricity-interconnection-

targets_en 

52   EU (2021) Revision of the TEN-E Regulation - EU guidelines for new energy infrastructure. Briefing – EU Legislation in Process. P. 5 

53   United Nations (2006) Multi Dimensional Issues in International Electric Power Grid Interconnections. Pp. 117 

54   ENSYSTRA (2021) Opportunities and barriers to interconnector expansion in the North Sea Region 

55   IRENA (2019) Demand-side flexibility for power sector transformation 

38 

 
                                                   
EnTEC – Study on Energy Storage 

will be described. The contribution of the alternative flexibility options is discussed in terms of their 
technical implications, type of flexibility, time scale, maturity of the technology delivering the ser-
vice, and qualitatively estimated costs. 

In this work, the demand-side flexibility option is categorised into DSM through sector coupling, 
through industry load shifting and though households with smart electricity use. Each of these cat-
egories is further subdivided into specific processes and applications suitable for DSM. 

2.2.3.1  DSM through sector coupling  

Sector coupling (also referred to as sector integration or Power-to-X56) is seen as a promising op-
tion to decarbonize sectors such as the heating or mobility sector by electrifying processes that are 
currently based on fossil fuels. Considered sector coupling technologies, like heat pumps and elec-
trolysers, convert electrical energy into useful energy which also acts as an energy storage medium. 
Additionally, these demand side technologies can also be used as flexibility resources. Their flexi-
bility can be enhanced by including a storage unit or by the expansion of the existing storage units. 
In this study e-mobility as well as other technologies are considered as a sector coupling technology 
that can provide flexible demand. From this perspective flexible demand can be a competitor to 
storage technologies, but typically the capabilities of flexible demand can be extended or facilitated 
by heat and gas storage technologies. In this case energy storage can be a relevant technology 
facilitating DSM as the DSM strategies and storage systems can enhance the penetration rate of RE 
generation by decreasing the short-term variability caused by the unpredictable and intermittent 
nature of RESs. 

Cost 

The primary objective of sector coupling technologies – as is also the case for all other demand-
side resources – is not flexibility provision, but fulfilling end customer needs like heat, mobility, etc. 
Therefore, only the part of the investments that are needed to provide flexibility are considered. 
Relevant  sector coupling  technologies that can  provide  flexibility and represent a  competitor to 
storage technologies are residential and commercial heat pumps, electrolysers and electric vehicles. 
The cost assessment for flexibility provision is based on the difference between the sector coupling 
technology with and without flexibility provision, so that only the additional investments and costs 
that are needed to run the technologies in a flexible way. The main cost components for flexibility 
provision with DSM, particularly for heat pumps and electrolysers, are cost for ICT and metering 
(upfront) as well as costs caused by operation at a lower efficiency. Both aspects have to be over-
compensated by the profits from flexibility use. Table 5 gives an overview on estimated costs. For 
electric  vehicles  main  costs  emerge  from  smart  charging  stations  or  wall  boxes  and  the  related 
metering infrastructure.  

Table 5 

Cost of DSM through sector coupling technologies 

Appliance  Action 

Initialisation 
costs - Invest-
ment 
(EUR/kW) 

Initialisation 
costs - Yearly 
Fixed cost 
(EUR/kW) 

Activation 
costs 
(EUR/MWh) 

Heat pumps  Load increase, Load decrease, 

100–200a 

4–8c 

3.3–82.4 

Load shifting 

56   Wietschel et al. (2020) Energy integration across electricity, heating & cooling and the transport sector - Sectorcoupling 

39 

 
                                                   
EnTEC – Study on Energy Storage 

Appliance  Action 

Initialisation 
costs - Invest-
ment 
(EUR/kW) 

Initialisation 
costs - Yearly 
Fixed cost 
(EUR/kW) 

Activation 
costs 
(EUR/MWh) 

Electrolysers  Load increase, Load decrease, 

500–1000a 

20–40c 

16.5–44.9 

Load shifting 

Electric  
vehicles 

Load increase, Load decrease, 
Load shifting 

40–1200b 

25–90 

~ 0 

a Investments in the system, b Investments for infrastructure, c 4% of investments are considered as fixed yearly costs e.g. commu-
nication costs. Initialisation costs consist also of upfront investments mainly for measurement infrastructure, control and com-
munication technologies. 
Sources:57, 58, 59. 

Table 6 

Technical parameters of DSM through sector coupling 

Appliance 

Duration of intervention (h) 

Shifting duration (h), re-
cover after intervention end 

Heat pumps 

Electrolysers 

Electric vehicles 

Sources: 57, 58, 59 

4 

4 

1 (<24) 

3 

6 

<24 

Heat pump (Power-to-Heat). Final energy consumption for space heating in residential and com-
mercial sector in EU makes significantly high share. Heat pumps as a centralised (district heating) 
as  well  as  decentralised  solution  play  a  crucial  role  in  meeting  the  heating  demand.  It  can  also 
significantly provide flexibility to balance the power grid by decoupling heat demand and power 
load supported with a thermal storage60. 

Heat pumps can be turned on and off instantly, and they fully ramp up in 30 seconds, allowing for 
quick response61. The availability of flexibility from heat pumps is determined by the end user's heat 
demand, and it is typically high between 4 and 22 hours per day, and especially during the winter 
months61. When energy prices are low, heat pumps may be used in conjunction with buffer heat 
storages  to  provide  flexibility  by  storing  heat  during  off-peak  hours  and  using  it  on  chilly days. 
Actual  availability  is  influenced  by  a  variety  of  factors,  including  but  not  limited  to  system  size, 
domestic hot water supply, temperature zone, and building standards61. 

Due to their ramp rates and availability, heat pumps may contribute to system stability by offering 
intra-  and inter-day flexibility. Thermal storage may be  employed  to offer positive and  negative 
control reserve in the event of frequency variations, depending on its availability and control strat-
egy. Especially heat pumps installed in the power intensive industries enable congestion manage-
ment depending on where the industry is located. 

Potential 

57   Ladwig (2021) A Techno-Economic Comparison of Demand Side Management with Other Flexibility Options 

58   Misconel et al. (2021) Assessing the value of demand response in a decarbonized energy system – A large-scale model application 

59   DG ENERGY (2016) Impact assessment study on downstream flexibility, price flexibility, demand response & smart metering 

60   Pau et al. (2018) Optimal Scheduling of Electric Heat Pumps Combined with Thermal Storage for Power Peak Shaving 

61   European Commission (2022) Digitalisation of energy flexibility 

40 

 
                                                   
EnTEC – Study on Energy Storage 

In the EU, the generation of heat using heat pumps has been increasing per year, over the last six 
years, approaching 250 TWh in 202062. The annual number of heat pumps (HP) in operation in the 
EU from 2013-2020 is approximately ranging from 25 to 42 million63. Furthermore, the heat pump 
sales in the EU for the building sector are expected to grow fast until 2030. Heat pumps account 
for 14.8 million installation in 21 EU countries in 2020 with 7.4% growth over 202064. The European 
heat pump association estimates that 6% of residential buildings are equipped with heat pumps. 
Assuming an average heat pump capacity of 4 kW per installation  the total installed heat pump 
capacity reaches 60 GW in 2020 and grows to more than 100 GW in the upcoming years. 

Electromobility (Power-to-Mobility)  

Electric  vehicles  (EVs)  could  be  a  flexible option  for  the power  system  when its  demand  can  be 
shifted in time, within a very short response time i.e., through controlled charging (smart charging) 
or  when  the  vehicles  even  feed  electricity  back  into  the  grid  enabled  by  bidirectional  charging 
providing Vehicle-to-Grid services. EVs are loads with high level of charging behaviour uncertainty. 
However, if they are led to charge in a certain pattern, they can be used as a flexibility option65. 
Furthermore, depending on the type of customer, their suitability for demand side flexibility may 
differ66. 

While  electric  vehicles  are  well-suited  to  providing  aggregated  flexibility  services  to  centralised 
markets, they are also suggested for offering local voltage regulation to the distribution grid.67. As 
EVs are mobile assets, they are located at a precise network node at a certain time accounting the 
voltage at that node they are plugged in. A central aggregator collects all voltage readings for all 
network nodes and communicates them to all EVs, which subsequently change their charging rates 
appropriately.  

With a low response time within seconds, the vehicle batteries can provide flexibility for 30 min to 
one hour68. Since the activation time of batteries is fast, EVs comply for the provision of Frequency 
Containment Reserve (FCR) and automatic frequency restoration reserve (aFRR) service. The avail-
ability  is  expected  to  be  accounted  for  throughout  the  year  given  no  influence  of  the  seasonal 
variation on the driving pattern. 

Potential 

The number of battery electric cars and plug-in hybrid cars has reached 3.8 million in 2021 with a 
growth of 85% compared to 2020. The market share of battery electric cars and plug-in hybrid cars 
on all cars in Europe is estimated to be roughly 1.1 percent in 2020 and increased to 1.6 percent in 
202169.  At  the  same  time  the  share  in  yearly  sales  already  reached  18%  in  2021  evenly  divided 
between battery electric cars and plug-in hybrid electric cars. With an estimated battery capacity of 
40 kWh per electric car (battery electric and plug-in hybrid cars) the overall battery capacity in 2021 

62   European Commission (2021) Progress report on competitiveness of clean energy technologies 

63   www.statista.com/statistics/739745/heat-pumps-in-operation-eu/ 

64   European heat pump association (2021) Market Report 2021 

65   Kaushik et al. (2022) Comprehensive Overview of Power System Flexibility during the Scenario of High Penetration of Renewable Energy in 

Utility Grid 

66   Earl et al. (2019) Electric vehicle manufacturers’ perceptions of the market potential for demand-side flexibility using electric vehicles in the 

United Kingdom 

67   Beaude et al. (2013) Introducing decentralized EV charging coordination for the voltage regulation 

68   IRENA (2018) Power system flexibility for the energy transition 

69   https://www.statista.com/statistics/955443/number-of-electric-vehicle-charging-stations-in-europe/ 

41 

 
                                                   
EnTEC – Study on Energy Storage 

is in the range of 150 GWh. According to the estimation of EEA (European Environment Agency), 
on an average 50% of all the car fleet in the EU-28 will be electric vehicles in 2050. EV’s share of 
overall electricity consumption in Europe will rise from 0.03% in 2014 to 4-5% by 2030 and 9.5% by 
205070. 

Electrolyser (Power-to-Gas)  

Using the Power-to-Gas technologies, electricity is converted into the chemical energy carrier i.e., 
hydrogen by means of electrolysis of water. The hydrogen produced in this way can then be fed 
into the existing natural gas grid or can be temporarily stored in a local hydrogen storage facility. 
The technical analysis of large-scale electrolysers performed by Gusain et al. (2020) shows that the 
PEM cells are suitable for providing balancing services. Moreover, its fast dynamic response can 
provide frequency regulation services71. Due to its faster reaction times, electrolyser development 
has shifted away from alkaline electrolysers72. The rapid reaction time of electrolysers enables the 
provision of FCR services while utilising inexpensive power during off-peak hours. Asymmetric bid-
ding would provide suppliers with even more flexibility, since the ability to bid specifically for up-
ward or downward regulation would allow for the most efficient use of existing capacity. In terms 
of compensation, capacity payments are often more appealing than energy payments. Large scale 
electrolysers may also contribute to lower the critical peaks loads by adjusting or curtailing their 
electricity demand. Additionally, its bidirectional quick ramping capacity may assist minimise re-
newable energy source variations and reduce energy curtailments. 

Electrolyser’s technical property of high-speed performance indicates a significant capacity to par-
ticipate in FCR, since any fluctuation in demand may be accomplished in less than one second. For 
load providers, the control system can be configured with an inverse droop73 characteristic, reduc-
ing consumption during frequency drops and increasing consumption during frequency increases.  

Potential 

Large flexibility is also expected from electrolysers that produce green hydrogen. According to the 
fuel cells and hydrogen observatory the hydrogen supply capacity from water electrolysis reached 
44 tons per day or 16,000 tons per year by the end of 2020, but is expected to grow substantially. 
Assuming  a  continuing  production  and  a  60%  efficiency  of  the  electrolyser  the  power  demand 
would increase from some 100 MW to several GWs in just a few years. Around 85% of the worldwide 
hydrogen  projects  are  located  in  Europe74)  taking  a  substantial  share  of  newly  installed  assets. 
Across sectors, it is estimated that Europe has the potential to generate about 665 TWh and 2250 
TWh of hydrogen in 2030 and 2050, respectively75. The objective of the European hydrogen strategy 
until 2030 is to produce up to 10 million tons of renewable hydrogen per year, related to 40 GW of 
electrolyser capacity. Thus, the technical DSM potential depends on the future continuation of the 
fast diffusion of these technologies. However, the usable potential is linked to monetary and non-
monetary  incentives  for  owners  of  flexibility  resources.  Depending  on  the  availability  of  the  re-
sources for DSM, their activation is based on technical requirements such as a maximum duration 

70   European Environment Agency (2016) Electric vehicles and the energy sector - impacts on Europe's future emissions 

71   Gusain et al. (2020) Technical Assessment of Large Scale PEM Electrolyzers as Flexibility Service Providers 

72   Eichmann et al. (2014) Novel Electrolyser Applications: Providing More Than Just Hydrogen 

73   Inverse droop control is to control the active and reactive outputs by measuring grid voltage amplitude and frequency to trace the predefined 
droop characteristic. The droop characteristic describes the correlation between the input parameters (grid voltage amplitude or frequency) 
and the outputs (active or reactive power) of the controller 

74   https://auroraer.com/media/companies-are-developing-over-200-gw-of-hydrogen-electrolyser-projects-globally-85-of-which-are-in-europe/ 

75   Fuel cells and Hydrogen (2019) Hydrogen Roadmap Europe 

42 

 
                                                   
EnTEC – Study on Energy Storage 

of an intervention as well as the shifting duration76, i.e., the number of hours that demand can be 
shifted from the originally planned point in time (see Table 6). 

Challenges and Enablers 

Barriers can be economic, technological, technical, social/behavioural as well as regulatory. Many 
barriers are similar for residential heat pumps and electric vehicles. 

A major obstacle hampering the activation of residential demand-side flexibility is that profitability 
of demand response is limited77 while many consumers fear a loss of comfort78 (that is, thus, not 
offset by a financial compensation). 

Technological barriers comprise high costs for communication and metering technology79, the lack 
of interoperability between several parties as well as the necessity to have functioning concepts for 
data sharing and suitable communication protocols in place80,81. Furthermore, enhanced ICT capa-
bilities also might go along with an increased potential of cyber-attacks79. 

Technical requirements that may act as barriers are minimum bid size, the aggregation of multiple 
small loads (EV participants), the minimum duration of flexibility and load frequently changing the 
network node for charging (EVs as non-stationary loads changing locations)82. 

While the aforementioned technical requirements can also be classified as regulatory barriers, other 
regulatory obstacles comprise incentives and price signals for flexibility provision, the possibility for 
a collective prequalification of small-scale flexibility resources and, overall, a functioning regulatory 
framework for flexibility provision. Social barriers include a lack of information about DSM83, low 
awareness of and confidence in DSM and a lack of trust in data sharing infrastructure and utilities 
in general.  

Enablers, on the other hand, comprise the role out of smart metering infrastructure, the creation of 
save and trustworthy data frameworks as well as the clarification of third-party access to data with 
regard to flexibility (as suggested in the proposal for RED III Art 20a). Pilot projects that test and 
showcase solutions can also act as enablers84. 

Electrolysers as an industrial-scale technology face barriers similar to the ones for industrial load 
management. We therefore refer to the following section for barriers regarding this technology. 

76   Duration of Intervention determines how long the demand of a DSM application can be reduced or increased, whereas shifting duration pre-

sents the maximum of minutes or hours, an electricity demand can be shifted to an earlier or later point in time 

77   Globisch et al. (2020) The stranger in the German energy system? How energy system requirements misalign with household preferences for 

flexible heat pumps 

78   Toft et al. (2015) Exploring private consumers’ willingness to adopt Smart Grid technology 

79   Gautham et al (2018) Roadmap Electric Vehicles and Grid Integration (V1G versus V2G) 

80   ElaadNL (2016) EV Related Protocol Study 

81   IRENA (2021) Innovation outlook: Smart charging for electric vehicles 

82   Wohlfarth et al. (2019) Setting course for demand response in the service sector 

83   Advanced Energy Economy Institute (2018) Cybersecurity in a distributed energy future. Addressing the challenges and protecting the grid 

from a cyberattack 

84   Jakeman et al. (2020) Digital technologies and use cases in the energy sector 

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EnTEC – Study on Energy Storage 

2.2.3.2  DR through industry load management 

Flexibility from industrial processes can be provided by the means of load shedding and time-var-
iable production. There is relevant potential for demand side flexibility especially in the energy in-
tensive as well as wood and paper industries85. 

Cost 

It is more convenient to use industrial flexibility to provide services since larger loads demand less 
resources to attain the minimum size necessary for bidding in the market. Additionally, in the in-
dustrial sector, the information and communication (IC) infrastructure are often already in place for 
energy management, necessitating a lesser investment to deploy industrial assets86. Many industrial 
sectors, as shown  in  Table  7, can adjust  their  electricity consumption for short  duration without 
having a significant impact on its overall operations. The extent timing of this frequency relies on 
the industrial facility’s utilisation, which varies over time. 

Table 7 

Cost of DSM through industrial load management in the potential sectors 
(based on survey data from 2012/13) 

Sector 

Appliance 

Action 

Initialisation 
costs - In-
vestment 
(EUR/kW) 

Initialisation 
costs - Fixed 
cost 
(EUR/kWa) 

Activation 
costs 
(EUR/MWh) 

Non ferrous 
metals 

Chemical 

Paper and Pulp 

Aluminium 
electrolysis 

Chlorine electro-
lysis 

Load shed-
ding 

Load shed-
ding 

Paper machines 

Load shifting 

Mechanical wood 
pulp production 

Load shif-
ting, delay 

Iron and Steel 

Electric arc steel 

Load shed-
ding 

1-20b 

1-20b 

1-20b 

1-20b 

Non metallic 
minerals 

Cement mill 

Load shifting 

1-20b 

b Investments in the infrastructure 

0-1 

0-1 

0-1 

0-1 

0-1 

225-1500 

30-310 

225 

0-10 

130-1000 

0-6 

Aluminium industry: The flexibility in the aluminium industry can only be seen in load shedding. The 
load shifting can only take place to a very limited extent, as the liquid aluminium has to be pro-
cessed directly and is alloyed and rolled specifically for the customer. The capacity of downstream 
process steps are an impediment to load shifting in this case87. The duration of the load shedding 
is shown in Table 7.  

85   Fritz (2013) Övergripande drivkrafter för efterfrågeflexibilitet 

86   Minniti et al. (2018) Local Markets for Flexibility Trading: Key Stages and Enablers 

87   Baucknecht et al. (2016) Systematischer Vergleich von Flexibilitäts- und Speicheroptionen im deutschen Stromsystem zur Integration von er-

neuerbaren Energien und Analyse entsprechender Rahmenbedingungen 

44 

 
 
 
 
                                                   
EnTEC – Study on Energy Storage 

Chemical industry: The main potential in the chlorine industry lies in the process of chlorine elec-
trolysis.  The  flexibility  of  chlorine  electrolysis  is  essentially  enabled  by  the  downstream  chlorine 
tanks. The load of this industry is already actively marketed in the reserve market88. 

Paper and Pulp industry: The paper industry's load management potential is bound to the produc-
tion of wood pulp and the processing of paper products. Machineries powered by electricity can 
be utilised for load management in actual paper production, and for the production of wood pulp, 
wood is ground into fibres. Both operations need a continuous electricity supply. Additionally, wood 
pulp may be temporarily held in silos. This raises the potential of load shifting for this procedure, 
depending on the storage capacity89. 

Iron  and  Steel  industry:  The  secondary  steel  which  is  basically  the  scrap  steel  which  is  recycled 
through the process of electric arc furnace. However, it may only capable of load shedding since 
there is no scope for load increase to catch up with production90. 

Non-metallic  minerals  industry:  Out  of  four  main  steps  of  cement  production,  for  demand  side 
management, the cement grinding mills in particular are to be taken into account, as only here is a 
relevant storage facility downstream. The load profile of cement production depends on the season, 
the day of the week and the time of the day. The cement mills are not in operation in winter and 
primarily run at night and on weekends in the other seasons in order to be able to use off-peak 
tariffs91. Moreover, raw mills are classified as shiftable technologies in the literature91. 

The flexibility from the appliances such as heat pumps, circulating pumps, ventilation, air condition-
ing and electric pumps can be enabled during certain hours by regulating the consumption. Huge 
cooling  systems can  be  found  in  the  food  industry  where  the  cooling  demand  occurs  in  all  the 
seasons. However, the annual profile has a clear correlation with the outdoor temperature. 

Table 8 

Technical requirements of DSM through industrial load management 

Appliance 

Action 

Duration of inter-
vention (h) 

Shifting duration 
(h) 

Aluminium electrolysis 

Load shedding 

Chlorine electrolysis 

Load shedding 

Paper machines 

Load shifting 

Electric arc steel 

Load shedding 

Cement mill 

Load shifting 

4 

4 

3 

4 

3 

Mechanical wood pulp 
production 

Sources: 92 

Load shifting, Delay 

2-3 

12 

6 

24 

12 

6 

4 

88   Klobasa et al. (2011) Kurz- bis Mittelfristig realisierbare Marktpotenziale für die Anwendung von Demand Response im gewerblichen Sektor 

89   Hartkopf et al. (2012) Lastmanagementpotenziale der stromintensiven Industrie zur Maximierung des Anteils regenerativer Energien im bezo-

genen Strommix 

90   Paulus et al. (2011) The potential of demand-side management in energy-intensive industries for electricity markets in Germany 

91   Klobasa (2007) Dynamische Simulation eines Lastmanagements und Integration von Windenergie in ein Elektrizitätsnetz auf Landesebene unter 

regelungstechnischen und Kostengesichtspunkten 

92   Müller et al. (2018) Demand Response Potential: Available when Needed? 

45 

 
                                                   
EnTEC – Study on Energy Storage 

Challenges and Enablers 

The  main  requirements  for  a  successful  activation  of  industrial  load  flexibility  is  that  all relevant 
electricity  markets  are  implicitly  and  explicitly  open  for  DSM93.  Correspondingly, despite  explicit 
requirements in the Renewable Energy Directive (RED II, Art. 15.8). One crucial barrier is that in some 
countries, DSM is still only possible in all markets and methods for pre-qualifying, measuring, com-
municating, and paying of DSM are not developed in all member states94. Important social barriers 
are, firstly that there is a lack of awareness and knowledge about DSM; and secondly that in organ-
isations where energy is not linked to the core business, energy projects are often not considered 
a priority95.  

As significant regulatory obstacle can be identified for industrial load management, solving these 
obstacles would present an important enabler. Solutions in this direction include that prequalifying 
can be performed at aggregated level to reduce administrative and measurement burdens. Simi-
larly, technical modalities (which in some cases are not designed according to market needs but 
according to traditional market participants, i.e. large-scale conventional power plants) should be 
adjusted according to DSM resources' capabilities. This refers to e.g. availability of capacity, required 
size of bid, frequency of auctions and the option of asymmetric bidding96. 

On the technical side, according to the European Smart Grids Task Force, the smart meter roll out 
and the use of smart meter data to provide a proper legal basis to DSOs and TSOs could work as 
an enabler96. In this regard, the requirements for Smart Meter Systems, outlined in the Directive 
(EU) 2019/94497, Art. 19, present a framework to ensure that sufficient information on energy con-
sumption exist. The proposal for a directive amending the Renewable Energy Directive98, Preamble 
18 and Article 20a would provide for a framework ensuring that access to necessary consumption 
data  is  granted.  As  additional  enablers,  the  improvement  of  load  and  generation  forecasting  at 
distribution level as well as establishing a reliable and  secure communication  between flexibility 
provider and TSO/DSO are named. 

Propositions for social enablers include an information campaign on DSM for industries with a focus 
on "Green Image" to motivate industry to participate in DSM, seminars to overcome the lack of 
technical know-how in the industry and establishing a more consumer-friendly administrative pro-
cess for DSM99. 

93   Antretter et al. EnTEC (Energy Transition Expertise Centre) (2022) Digitalisation of Energy Flexibility. Report prepared for the European Commis-

sion 

94   Zancanella et al. (2017) Why Demand Response is not implemented in the EU? Status of Demand Response and recommendations to allow 

Demand Response to be fully integrated in energy markets. Forouli, Aikaterini; Bakirtzis, Emmanouil A.; Papazoglou, Georgios; Oureilidis, Kon-
stantinos; Gkountis, Vasileios; Candido, Luisa et al. (2021): Assessment of Demand Side Flexibility in European Electricity Markets: A Country 
Level Review. In: Energies 14 (8), S. 2324. DOI: 10.3390/en14082324. 

95   Cardoso et al. (2020) Making demand side response happen: A review of barriers in commercial and public organisations 

96   European Smart Grids Task Force (2019) Final Report: Demand Side Flexibility. Perceived barriers and proposed recommendations 

97   Directive (EU) 2019/944 of the European Parliament and of the Council of 5 June 2019 on common rules for the internal market for electricity 

and amending Directive 2012/27/EU 

98   Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Directive (EU) 2018/2001 of the European Parlia-
ment and of the Council, Regulation (EU) 2018/1999 of the European Parliament and of the Council and Directive 98/70/EC of the European 
Parliament and of the Council as regards the promotion of energy from renewable sources, and repealing Council Directive (EU) 2015/652 

99   Shoreh et al. (2016) A survey of industrial applications of Demand Response 

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EnTEC – Study on Energy Storage 

2.2.3.3  DR through households with smart electricity use 

Cost 

Along with the appliance associated with the domotic devices, the main costs or efforts relate to 
comfort losses for adapting appliance usage times and routines. If metering and control technolo-
gies are in place, related costs for demand response decrease substantially as these costs would 
not be additionally any more. Some activation costs would still remain, if appliances would operate 
less efficient. 

Table 9 

Cost of DSM through households with smart electricity use 

Action 

Initialisation 
costs - In-
vestment 
(EUR/kW) 

Initialisation 
costs - Fixed 
cost 
(EUR/kWa) 

Activation 
costs 
(EUR/MWh) 

Air conditioner 

Load shifting 

40–1,200b 

25–90 

Washing machine 

Dryers 

load shifting, load 
shedding, valley filling 

Load shedding, load 
shifting 

Dish washers 

Load shifting 

Refrigerators/freezers 

load shifting 

40–1,200b 

Water circulation 
pumps (heating sys-
tem) 

Load increase, decrease 

100–200a 

a Investments in the system, b Investments for infrastructure, c 4% of investments 

25–90 

4–8c 

70 

10 

10 

10 

70 

10 

Potential 

The potential for shifting electricity consumption in the households identified in the literature are 
primarily  through  air  conditioners,  washing  machines,  dryers,  dishwashers  as  well  as  refrigera-
tors100, 101. If the proper infrastructure is in place, such as smart meters, sensors, communications 
technologies, certain smart appliances may also offer demand-side flexibility. 

For utilising the flexibility of the household appliances, it is necessary to ensure their save function-
ing as well as sufficient availability. Either the load can be shifted manually by the user, for instance, 
to price signals by switching or preprograming their household appliances accordingly, or can be 
remotely controlled and operated automatically. However, the load may only be shifted to other 
times for a  limited period of  time. The user has  to use  the  dishwashers which  may not be used 

100  Apel et al. (2012) Ein notwendiger Baustein der Energiewende: Demand Side Integration. Lastverschiebungspotenziale in Deutschland. Kurzfas-

sung 

101  Scholz et al. (2014) Möglichkeiten und Grenzen des Lastausgleichs durch Energiespeicher, vershiebbare Lasten und stromgeführte KWK bei 

hohem Anteil fluktuierender erneuerbarer Stromerzeugung 

47 

 
 
 
 
 
 
 
 
 
                                                   
EnTEC – Study on Energy Storage 

immediately now, but later in the day, which means that the load is not always available for shift-
ing102. At the same time, it must be guaranteed that the user can regulate the appliance, if he or 
she wants. 

Fixed and shiftable loads are the two types of household loads. Fixed loads are appliances whose 
power  consumption  and  use  time  cannot  be  modified  (e.g.,  televisions  and  refrigerators),  while 
shiftable loads are appliances whose power consumption or operating time may be pushed to a 
later period (e.g., air conditioner, washing machine, dishwasher)103. As with heat pumps, the oper-
ation times of direct electric heating systems may be shifted in consideration of the given temper-
ature tolerance corridors of the rooms to be heated. Air conditioners are mostly operated during 
the summer months in Central European countries, in contrast to Southern European countries used 
also during other hot months of the year. The air intake and exhaust fans may be turned on or off, 
or flexibly adjusted if they have variable speed drives. Demand response can be done as long as 
the appropriate air quality is maintained. In a refrigerator the compressor is the primary component 
with cooling compartment  temperatures range between  +2°C and +7°C,  while freezer compart-
ment temperatures range between -12°C and -20°C. Both the compartments have a rated power 
range of 50 to 300 W, a load factor of around 33%, and a continuous runtime of several minutes to 
a half hour. The duration of operation for washing machines, dishwashers, and driers is typically 
between 15 minutes and 3 hours, and they continue once switched on, making these appliances 
appropriate for load shifting activation within limited time ranges related to their physical storage 
capacity104. 

Table 10 

Technical parameters of DSM households with smart electricity use 

Appliance 

Action 

Air conditioner 

Load shifting 

Washing machine 

load shifting, load shedding, valley 
filling 

Dryers 

Load shedding, load shifting 

Dish washers 

Load shifting 

Refrigerators/freezers 

load shifting 

Water circulation pumps 
(heating system) 

Load increase, decrease 

Challenges and Enablers 

Duration of 
intervention 
(h) 

Shifting 
duration 
(h) 

1 

6 

6 

6 

2 

12 

1 

24 

24 

24 

1 

12 

Barriers and enablers for residential flexibility are similar to the ones for residential heat pumps and 
electric vehicles that are charged at home (see Section 2.2.3.1.). Typical appliances in this section 

102  Bilton et al. (2014) Smart appliances for residential demand response 

103  Ruzbahani et al. (2019) Smart Households Demand Response Management with Micro Grid 

104  Boßmann (2015) The contribution of electricity consumers to peak shaving and the integration of renewable energy sources by means of de-

mand response 

48 

 
 
                                                   
EnTEC – Study on Energy Storage 

have lower energy and power demands so that low costs for metering and controlling such appli-
ances are even more important. Similarly, loss of comfort is a major barrier for the flexible use of 
some residential appliances, as the necessitate a change in the users’ behaviour105. The diffusion of 
home energy management systems (HEMS) can be a strong enabler for activating small scale de-
mand response, if the systems allow for an interoperability between different vendors. 

2.2.4 

Summary and Comparison 

In this chapter three flexibility options were described, which are expected to play a major role in 
the future energy system, together with energy storage. Table 11 summarises the main elements 
described and compares them with energy storage. 

Supply-side  flexibility  at  low  cost  within  a  renewable  based  system  has  a  medium  potential  for 
expansion. Challenges are to extend renewable driven supply side flexibility technologies such as 
hydropower,  geothermal  energy,  and  renewable  driven  gas  power  plants.  Enablers  can  here  be 
balancing markets, reasonable congestion management and the increase of SmartGrids. In com-
parison to energy storage, supply-side flexibility can be provided by technologies which need to 
be installed anyways to reach the European climate goals. However, curtailment of volatile renew-
able energy technologies can be avoided by using electricity storage. 

Interconnections usually come with high cost and have a medium potential for expansion. Chal-
lenges are long permit times, environmental issues and public acceptance. Enablers here are the 
reduction of permit times as aimed at by the European Commission, and information of the public. 
Interconnections are a necessary part of a growing renewable driven European energy system and 
will be unavoidable. In comparison to storage, the main disadvantage is that interconnectors need 
several years until they are implemented, while most storage systems can be installed in shorter 
time periods. Therefore, interconnectors are part of the long-term strategy and can be accompa-
nied by energy storage in a meaningful way.  

DSM through sector coupling technologies and household appliances are comparatively costlier 
than the industrial load management. In the industrial sector, the IC infrastructure are often already 
in  place  for  energy  management,  necessitating  a  lesser  investment  to  deploy  industrial  assets, 
whereas, smart devices and control technologies needs to be in place otherwise it adds up to ad-
ditional upfront cost. Enablers can here be the availability of a framework for data and access, com-
munication protocols, prequalification at aggregated level and HEMS for activating small-scale de-
mand response. In comparison to storage, DSM can be provided by the underlying technologies 
and optimised DSM can aid avoiding investment in small to medium side storages. Otherwise, flex-
ibility can also be enhanced by strategically accompanied energy storages. 

All flexibility options will be important for the future energy system. Balancing renewable energy 
curtailment, grid expansion, demand side management and energy storage in a cost-optimal way 
is the key challenge for the future energy system. The potential of all flexibility options needs to be 
exploited to ensure a safe and cost-effective energy supply. 

105  Toft et al. (2015) Exploring private consumers’ willingness to adopt Smart Grid technology 

49 

 
 
                                                   
EnTEC – Study on Energy Storage 

Table 11 

Comparison of flexibility options 

Energy Storage Systems  Supply-side 

Interconnections 

Cost 

Potential 
for growth 

high 

high 

low 

medium 

high 

medium 

Challenges  Regulatory issues, creat-
ing business opportuni-
ties 

Enablers 

Balancing markets, local 
flexibility markets 

Renewable supply side 

Balancing markets, con-
gestion management, 
SmartGrids 

Long permit times, envi-
ronmental issues, public 
acceptance 

Limit permit times, infor-
mation of the public 

Electric vehicles & heat 
pumps 

Industrial load manage-
ment 

Household appliances 

Cost 

medium 

Potential 
for growth 

high 

Challenges  Market rules need to ac-

Enablers 

count for small-scale flex-
ibility resources; fear of a 
loss of comfort and con-
trol 

Framework for data avail-
ability and access is avail-
able. Communication pro-
tocols enabling DSM and 
bidirectional charging are 
published 

low 

high 

medium 

low 

Methods for pre-qualify-
ing, measuring, communi-
cating, and paying of 
DSM in all member states 
and for all markets 

Market rules need to ac-
count for small-scale flex-
ibility resources, Difficult 
to influence user behav-
iour 

Prequalifying at aggre-
gated level 

Requirement of HEMS for 
activating small scale de-
mand response 

50 

 
 
 
 
 
EnTEC – Study on Energy Storage 

3 

Market value of stored electricity and cost gaps 

3.1 

Introduction and approach 

The  diffusion  of  storage  technologies  is  linked  to potential  market  revenues  in  different energy 
markets. Within the assessment of potential revenues quantitative market indicators are used that 
consider bulk storage services via arbitrage, revenues for ancillary services and earnings as well as 
avoided costs via end customer energy management and self-production.  

Next to this key use cases and revenue opportunities additional use cases are analysed in a quali-
tative way to assess potential earnings and cost gaps. An overview of the revenue assessment is 
given below: 

Quantitative assessment with market data 

  Bulk energy arbitrage: Day-Ahead and Intraday market  
  Ancillary services frequency regulation: FCR, aFRR, mFRR, RR 
  Customer energy management self-consumption: residential electricity prices 

Qualitative assessment of markets 

  Transmission  and distribution  infrastructure (Upgrade  deferral, congestion  relief and voltage 

support) 

  Capacity provision, capacity markets/auction 
  Black start and voltage support 

The assessment of potential cost gaps for storage technologies is done by comparing revenue and 
costs for storage technologies. Typical use cases are defined that consider the utilisation of storage 
technologies and further technical parameters related to the application of the technology. 

To gather input from market participants about current and expected future revenues of energy 
storage, barriers, and gaps between public and private values of energy storage, a survey was also 
conducted. The results of the survey are summarised in the later part of this chapter in the sec-
tion 3.5. The full survey results are attached as an appendix to this report. 

3.2 

Market overview 

Revenues for storage can be generated  in different  energy markets. Based on  available data on 
European scale, main indicators are derived. Several indicators are calculated for arbitrage trading, 
ancillary service markets and for end customer energy management. Next to price indicators also 
the procured capacities and activated energy volumes are assessed (see Figure 13). 

51 

 
EnTEC – Study on Energy Storage 

Figure 13 

Overview of revenue indicators for number of (electricity) storage technolo-
gies 

Source: own figure.   

3.2.1  Day ahead market 

Storage  technologies  can  generate  revenues,  when  they  participate  in  day-ahead  spot  markets. 
Revenues in the spot market are an alternative option for storage technologies next to its partici-
pation in balancing markets. Typically, revenues in the balancing markets are higher compared to 
the day ahead spot market so that main market participation especially of storage technologies like 
batteries concentrate on balancing markets. However, pumped-storage hydro power participated 
in day ahead spot-markets for many years and benefited from daily price spreads.  

Data sources and approach 

Based on market data from the ENTSO-E transparency platform two types of average price spreads 
are calculated as indicators for potential market revenues. 

  Highest daily price spread: Difference between highest and lowest hourly market price within 

on day (24 hours) 

  Second  highest  price  spread:  Difference  between  second  highest  and  second  lowest  hourly 

market price within on day (24 hours) 

An assessment of day ahead markets is done for EU member states and some none-EU countries 
like Switzerland and Norway for the years 2018 until 2022.  

Price spreads indicators and outcome of the analysis 

Average  electricity  prices  on  whole-sale  markets  decreased  from  2018  until  2020  and  have  in-
creased substantially in 2021 and 2022. The price spread indicator (highest and lowest price per 
day) was in a range between 16 and 46 Euro/MWh until 2020 and increased substantially in 2021 
and 2022. In Germany, France, Finland and Slovakia the price spread indicator increased to more 
than 75 Euro/MWh in 2021 and up to 100 Euro/MWh and beyond in 2022. Spain and Portugal had 
lower price spreads compared to the first mentioned countries (see Figure 14). 

Therefore, price spread levels and revenue conditions for storage technologies developed in a sim-
ilar range and direction in most of the analysed member states in the last years.  

52 

 
 
EnTEC – Study on Energy Storage 

Figure 14 

Development of average daily price spreads in the day ahead markets from 
2018 to 2022 in selected countries (EUR/MWh) 

y
r
t
n
u
o
C

SK

PT

FI

ES

EE

DE_LU

BE

FR

Price Spread - 2018

Price Spread - 2019

Price Spread - 2020

Price Spread - 2021

Price Spread - 2022

0

20

40

60

80

100

120

140

160

180

EUR/MWh

Source: own calculation, based on ENTSO-E transparency data, price spread is the difference between highest and lowest hourly 
market price on a specific day.   

3.2.2 

Intraday market 

Another option for storage technologies is the participation in intraday markets that allow trading 
of electricity with shorter lead time. Storage technologies can be charged day-ahead and sell energy 
on shorter time frames or use price spreads within the day. Intraday markets allow continuous and 
auction trading. For the price spread analysis the intraday market data for continuous trading is 
used. Benefitting from intraday arbitrage requires the definition of a trading strategy and the fore-
cast of intraday market prices. Published market data indicates average, lowest, highest and last 
electricity price that were used for transactions in a specific hour. All available market data indicators 
are used to calculate potential market spreads in the intraday market. The market indicators and 
the derived market spreads therefore only give a rough estimate of potential price spread as arbi-
trage  trading  requires  a  good  market  price  forecast.  The  price  spread  indicator  is  substantially 
higher compared to market data from day ahead markets. Therefore, revenues on this market could 
be higher compared to day ahead markets. 

53 

 
 
EnTEC – Study on Energy Storage 

Data sources and approach 

The Figure 15 below present time series of prices for Austria, Germany, France and Czech Republic 
for the time period 2017 to 2020. Data is only available for one year for the Czech Republic, for 
three years for Austria and France and for four years for Germany. The market data is obtained from 
EPEX SPOT, OTE and Nordpool data platform. Price spreads are calculated on the basis of four types 
of market data in a specific hour that can be used as an indicator for potential market revenues for 
storage technologies. 

  Highest price: Indicates the highest price for a transaction within a specific hour 
 
Lowest price: Indicates the lowest price for a transaction within a specific hour 
Last price: Indicated the price for the last transaction that has been done for the specific hour 
 
  Weighted  average  price:  Indicates  the  average  price  of  every  transaction  for  a  specific  hour 

weighted by the traded energy volume. 

Based on these intraday market indicators the price spread is calculated using the difference be-
tween highest and lowest hourly market price for each type of price indicator within on day (24 
hours). 

Price indicators and outcome of the analysis 

Calculations  are  done  for  selected  EU  member  states  for  the  years  2017,  2018,  2019  and  2020. 
Average electricity price spreads on the analysed intraday markets are in the range between 81 and 
679 EUR/MWh (see Figure 15). 

The  range of the weighted  average  price spread  indicator is between  74 and  140 EUR/MWh. In 
2018, the price spread based on  the weighted average intraday price in France was around 140 
EUR/MWh, which was the highest in the analysed markets. The lowest price spread occurred also 
in the French intraday market in 2019 with 74 EUR/MWh. Price spread in the German intraday mar-
ket was above 100 EUR/MWh in 2019. 

Price spreads on the intraday market were substantially higher compared to the day ahead average 
price spreads for 2018 and 2019. They were observed to be between 27 and 33 EUR/MWh in France 
and between 31 and 42 EUR/MWh in Germany for example on the day ahead market.  

54 

 
EnTEC – Study on Energy Storage 

Figure 15 

Development of average daily price spread of indicators in the intraday mar-
ket for selected countries and years (EUR/MWh) 

Source: own calculation, based on ENTSO-E transparency data, price spread is the difference between highest and lowest hourly 
market price on a specific day. 

3.2.3  Ancillary service markets 

Storage technologies are participating in ancillary service markets in Europe and increased its mar-
ket shares substantially in the recent years due to the potential revenues that are generated here. 
According to the balancing guideline balancing markets distinguishes between balancing capacity 
and balancing energy and remunerate all participants for capacity and energy served.  

Data sources and approach 

Based on market data from the ENTSO-E transparency platform, below are the indicators calculated 
for potential market revenues for selected EU member states and the years 2019 until 2022. 

  aFRR - Automatic Frequency Restoration Reserve balancing reserves 

  Average prices over the course of the day 
  Annual average prices aFRR procured capacity 
  Monthly overview of aFRR activated Balancing Energy 
  Volume of contracted Balancing Reserves 

55 

 
 
EnTEC – Study on Energy Storage 

  Monthly overview of contracted aFRR activated Balancing Energy 

  mFRR - Manual Frequency Restoration Reserve balancing reserves 

  Average prices over the course of the day 
  Annual average prices mFRR procured capacity 
  Monthly overview of mFRR activated Balancing Energy 
  Volume of contracted Balancing Reserves 
  Monthly overview of contracted mFRR activated Balancing Energy 

  FCR - Frequency Containment Reserve balancing reserves 

  Average prices over the course of the day 
  Annual average prices FCR procured capacity 
  Monthly overview of FCR activated Balancing Energy 

Balancing capacity is procured on a daily basis in some member states and allows the participation 
of small scale assets as well. In 2020 already 80% of the FCR volume procured was tendered on a 
day ahead basis. The lowest share of day ahead procurement could be found for mFFR with less 
than 60% of the volume (see Figure 16). 

Figure 16 

Repartition of the procurement lead time of each type of reserve in selected 
European markets - 2020 (%) 

Source: ACER calculations based on NRAs data 

In many member states day ahead procurement of balancing reserves is implemented for all types 
of reserves (see Figure 17). Only a few member states procured part of the reserves on a weekly or 
longer lead time in 2020. 

56 

 
 
EnTEC – Study on Energy Storage 

Figure 17 

Repartition of the procurement lead time of each MS, for all types of reserve 
(FCR, aFRR, mFRR, RR) - 2020 (%) 

Source: ACER calculations based on NRAs data 

3.2.3.1  FCR - Frequency Containment Reserve 

For the annual average price to procure capacity, the picture is diverse across Europe. It is catego-
rised into distinct contract types and respective resolutions of the products. As per Article 6(9) of 
the Recast Electricity Regulation the contracts for balancing capacity shall not be concluded more 
than one day before the provision of the balancing capacity and the contracting period shall be no 
longer than one day across EU. The balancing markets in the analysed member states use daily and 
hourly contract types with 15 min, 30 min and 60 min resolution. Price indicators are calculated for 
each  time resolution  separately. A comparison  between  member  states on a  yearly basis is also 
given as a conclusion.  

In Germany, Slovenia and Austria with 15 min product resolution, the price was almost equal at 
around 5 EUR/MW per 15 min in 2022 (see Figure 18). The average prices in Greece and France with 
30 min product resolution reaches 8.7 EUR/MW per 30 min in France and 11.3 EUR/MW per 30 min 
in Greece in 2021. Capacity prices for FCR have followed similar trends in Greece and France for the 
year 2021 and 2022 although the prices in France are slightly lower than in Greece. Related to one 
MW provided for one-hour prices in these markets reaches 20 EUR/MW per 60 min in 2021 and 
2022.  

In contrast, the products with 60 min resolution are covering a larger range of capacity prices and 
are  costlier  in  some  member  states  compared  to  the  previous  two  markets  with  lower  product 
resolutions. The countries in this category see capacity prices below 20 EUR/MW per 60 minutes as 
in  Finland in  2021, but  also above 80 EUR/MW per 60  minutes as in  Belgium.  In  some member 
states it can be seen that capacity prices were below 10 EUR in each year, e.g. in Sweden, the Neth-
erlands or Denmark.  

Revenues  from  FCR  in  the  analysed  markets  and  member  states  could  reach  more  than  50,000 
EUR/MW per year, if capacity prices are above 6 EUR/MW per 60 minutes. In some member states 
revenues of more than 175,000 EUR/MW per year could be realised, if capacity prices are above 20 
EUR/MW per 60 minutes. 

57 

 
 
EnTEC – Study on Energy Storage 

Figure 18 

Annual average price for procured capacity (FCR) from 2019 to 2022 in se-
lected countries (EUR/MW/per contract resolution)  

Source: own calculation 

The contracted average price for the procured FCR over the course of a day varies, which is illus-
trated for Belgium in the Figure 19. Average capacity price level is about 3 times higher for the year 
2021  compared  to  2020  and  2022.  The  peak  capacity  prices  were  typically reached  in  the  night 
times. In the year 2021 a high-capacity price was also seen between 9:00-12:30 varying between 
280 and 310 EUR/MW per one hour. Periods with lower capacity price levels were noticed around 
the evening times after 18:00 for all years. 

58 

 
 
 
EnTEC – Study on Energy Storage 

Figure 19 

Average prices for procured capacity (FCR) over the day from 2020 to 2022 in 
Belgium (EUR/MW per one hour) 

350

300

250

W
M
/
R
U
E

200

150

100

50

0

2020

2021

2022

0

0

0

1

0

2

0

3

0

4

0

5

0

6

0

7

0

8

0

9

0

0

0

0

0

0

0

0

0

0

0

0

0

0

10 11 12 13 14 15 16 17 18 19 20 21 22 23

Hour of the day

Source: own calculation 

3.2.3.2  aFRR - Automatic Frequency Restoration Reserve 

In the majority of countries, the average price of activated balancing capacity from aFRRs has fol-
lowed a similar pattern between 2019 and 2021. Nevertheless, as illustrated in Figure 20, the 
growth of prices in each country continues to be significantly distinct. After 2019, the prices de-
creased in most countries, e.g. in Germany and Luxembourg, Romania or in Slovakia106.  

106  ACER (2021), Market Monitoring Report 2020 – Electricity Wholesale Market Volume 

59 

 
 
                                                   
EnTEC – Study on Energy Storage 

Figure 20 

Annual average price for procured capacity (aFRR) from 2019 to 2022 in se-
lected countries (EUR/MW per hour) 

y
r
t
n
u
o
C

FI

GR

ES

PT

FR

RO

SK

BE

DE_LU

NL

CZ

SI

AT

BG

PL

2022

2021

2020

2019

0

5

10

15

20

25

30

EUR/MW per hour

Source: own calculation 

On closer inspection of the average costs throughout the day in Belgium as seen in Figure 21, the 
prices  are  three  times  higher  in  2021  than  in  2020.  It  may  have  been  caused  by  the  COVID-19 
pandemic and related lockdown measures that had a substantial effect on energy systems in 2020. 
Compared to 2020, hourly pricing was mostly steady throughout the day in 2021. 

60 

 
 
 
EnTEC – Study on Energy Storage 

Figure 21 

Average prices for procured capacity (aFRR) over the day from 2020 to 2022 
in Belgium (EUR/MW) 

W
M
/
R
U
E

18

16

14

12

10

8

6

4

2

0

2020

2021

2022

0

0

0

1

0

2

0

3

0

4

0

5

0

6

0

7

0

8

0

9

0

0

0

0

0

0

0

0

0

0

0

0

0

0

10 11 12 13 14 15 16 17 18 19 20 21 22 23

Hour of the day

Source: own calculation 

With the exception of Germany and Luxembourg, all countries observed lower prices for upward 
capacity in comparison to 2019, which indicates that this service was on average less costly to TSOs. 
In 2021, practically all countries in the Figure 22 witnessed significant increase in the price of the 
service. However, the service became much more costly in 2021 for almost all countries. A similar 
pattern can also be seen for the downward regulation service. Figure 22 in particular clearly shows 
that the Slovakian downward capacity price was not only negative (providers have to pay for re-
ceived energy) but also stable throughout the course of the three years. These two developments 
in Slovakia may be the consequence of three years of declining electricity demand. Each country's 
annual prices for downward and upward capacity vary, however in France, prices for both services 
are same. 

61 

 
 
EnTEC – Study on Energy Storage 

Figure 22 

Annual average price for activated balancing energy (aFRR) from 2019 to 
2021 in selected countries (EUR/MWh) 

y
r
t
n
u
o
C

2021

K
S

2020

U
L
_
E
D

2019

2021

2020

2019

2021

E
B

2020

2019

2021

R
F

2020

2019

Price Up Mean

Price Down Mean

-50

0

50

100

150

200

EUR/MWh

Source: own calculation, prices are weighted to time and not with regard to the activated balancing energy 

3.2.3.3  mFRR - Manual Frequency Restoration Reserve 

In 2019 and 2021, the average prices of manual balancing capacity, mFRRs have followed similar 
patterns in most of the countries, with the exception of France. As depicted in Figure 23, there is a 
minor decline in prices in 2022 compared to 2021, whilst prices in France almost tripled. Neverthe-
less, the price development in each country continues to be considerably distinct. On further anal-
ysis, the 2019 peak prices in Belgium declined by a factor of three compared to the future years. 
For the remaining countries, the varying pattern is apparent.  

62 

 
 
EnTEC – Study on Energy Storage 

Figure 23 

Annual average price for procured capacity (mFRR) from 2019 to 2022 in se-
lected countries (EUR/MW)  

y
r
t
n
u
o
C

HU

AT

DE_LU

SK

FI

BE

FR

2022

2021

2020

2019

0

5

10

15

20

25

30

EUR/MW per hour

Source: own calculation 

Unlike aFRR, the yearly average hourly price fluctuates slightly from year to year (see  Figure 24). 
These hourly prices exhibit a spike between 7:00 and 9:00 am and between 15:00 and 17:30 pm. In 
2021, the highest peak prices between 15:00 and 17:30 were 2.5 EUR/MW, whilst the lowest prices 
in 2020 were below 0.5 EUR/MW. 

Figure 24 

Average prices for procured capacity (mFRR) over the day from 2020 to 2022 
in Belgium (EUR/MW per hour) 

W
M
/
R
U
E

3

2,5

2

1,5

1

0,5

0

0

0

0

1

0

2

0

3

0

4

0

5

0

6

0

7

0

8

0

9

0

0

0

0

0

0

0

0

0

0

0

0

0

0

10 11 12 13 14 15 16 17 18 19 20 21 22 23

Source: own calculation 

Hour of the day

63 

2020

2021

2022

 
 
 
EnTEC – Study on Energy Storage 

The pattern of average price development for upward energy services for mFRR remains the same 
for the majority of the countries, with some exceptions. Germany, Luxembourg, and Belgium ob-
served lower prices for upward capacity for each country, which indicates that this service was on 
average less costly to TSOs. However, in 2021, the price was 3 times higher than in 2020 in Belgium. 
Estonia, Finland Portugal and Slovakia have experienced high prices in 2019 and 2020. The peak 
price  was  seen  in  Slovakia  reaching  beyond  140  EUR/MWh,  which  substantially  dropped  to  10 
EUR/MWh. In Figure 25, it can be noticed that the price for upward energy spiked in the year 2021 
at around 130 EUR/MWh, which is around thrice the previous years. At the same time, the price for 
negative  energy  service  was  the  highest  this  year  at  105  EUR/MWh.  The  result  also  shows  that 
Slovakia had the lowest yearly average price (-35 EUR/MWh) for down energy service in the years 
2019 and 2020, compared to Germany, Slovakia, and Belgium. In Slovakia participants pay for en-
ergy on average, if they provide negative mFRR balancing energy.  

Figure 25 

Annual average price for activated balancing energy (mFRR) from 2019 to 
2021 in selected countries (EUR/MWh) 

y
r
t
n
u
o
C

K
S

T
P

I
F

S
E

2021

2020

2019

2021

2020

2019

2021

2020

2019

2021

2020

2019

2021

E
E

2020

U
L
_
E
D

E
B

R
F

2019

2021

2020

2019

2021

2020

2019

2021

2020

2019

Price Up Mean

Price Down Mean

-60

-40

-20

0

20

40

60

80

100

120

140

160

EUR/MWh

Source: own calculation 

3.2.4  Residential electricity prices 

This section highlights the development of electricity prices for residential consumers within the 
EU. Based on EUROSTAT data platform the prices presented here are with and without taxes, levies 
and VAT for household consumers. 

64 

 
 
EnTEC – Study on Energy Storage 

For household consumers in the EU, electricity prices excluding taxes and levies were highest in 
Belgium in 2019, 2020 and 2021 (0.195 EUR/kWh, 0.183 EUR/kWh and 0.176 EUR/kWh, respectively); 
see Figure 26. The lowest electricity prices were in Estonia (0.1 EUR/kWh, 0.091 EUR/kWh and 0.098 
EUR/kWh, respectively). For household  consumers in  the EU, electricity prices including all taxes 
and levies was highest in Germany in 2019, 2020 and 2021 (0.29 EUR/kWh, 0.30 EUR/kWh and 0.31 
EUR/kWh, respectively). The lowest electricity prices were in Estonia (0.13 EUR/kWh, 0.12 EUR/kWh 
and 0.13 EUR/kWh, respectively). 

Figure 26 

Development of retail prices from 2019 to 2021 in selected countries 
(EUR/MWh) 

h
W
M
/
R
U
E

0,35

0,3

0,25

0,2

0,15

0,1

0,05

0

9
1
0
2

0
2
0
2

FR

1
2
0
2

9
1
0
2

0
2
0
2

BE

1
2
0
2

9
1
0
2

0
2
0
2

DE

1
2
0
2

9
1
0
2

0
2
0
2

EE

1
2
0
2

9
1
0
2

0
2
0
2

ES

Year/Country

1
2
0
2

9
1
0
2

0
2
0
2

FI

1
2
0
2

9
1
0
2

0
2
0
2

PT

1
2
0
2

9
1
0
2

1
2
0
2

0
2
0
2

SK

Source: own calculation 

65 

All taxes and
levies included

Excluding taxes
and levies

 
 
 
 
EnTEC – Study on Energy Storage 

3.2.5 

Future electricity market development 

Based on JRC'S dataset, average daily price spreads were calculated as indicators for potential mar-
ket revenues. 

  Highest daily price spread: Difference between highest and lowest hourly market price within 

on day (24 hours) 

Calculations are done for selected EU member states for the year 2030. In 2030 (Figure 27), average 
wholesale electricity price spreads are expected to be significantly lower than in 2021 (see Figure 
14). Estonia has the lowest price in the selected countries in the range between 15 and 18 EUR/MWh 
and Portugal has the highest in the range between 25 and 28 EUR/MWh. 

Figure 27 

Average daily price spreads in the day ahead market in selected countries for 
2030 (EUR/MWh) 

y
r
t
n
u
o
C

SK

PT

FI

ES

EE

DE

BE

FR

0

5

10

15

20

25

30

EUR/MWh

Source: own calculation 

3.3 

Qualitative assessment of other applications 

Next to the described market applications several other services can be provided by storage tech-
nologies. Revenues are generated via direct payments or indirectly via avoided costs for other ser-
vices. As no markets for these services currently exist the assessment of potential incomes is done 
in a qualitative way. Typical payments resp. avoided costs are described and examples for imple-
mentations of these non-market applications are given. 

66 

 
 
EnTEC – Study on Energy Storage 

3.3.1 

Storage to support transmission and distribution infrastructure  

Main services to support transmission and distribution infrastructure are reactive power compen-
sation, grid upgrade deferral and contingency support.  

3.3.1.1  Transmission infrastructure support 

Examples for services in the transmission grid are upgrade deferral, congestion relief and contin-
gency support.  

Contingency support can play a major role in future power systems with high shares of renewable 
energies if spinning reserve from fossil generators are less available. "Virtual inertia" can be pro-
vided by storage technologies e.g. batteries in combination with grid-forming inverters. Grid plan-
ning and future system roadmaps e.g. in Germany, Great Britain or in Australia already indicate the 
need for virtual inertia especially for a save operation when parts of the power grids become sep-
arated from the main synchronous system.  

In the recent scenario framework 2021 for the German grid development plan up to 100 GW of 
storage  capacity  (behind  the  meter  and  utility  scale  battery  storage)  are  assumed  until  2037107. 
System operation and system stability require the implementation of instant reserves substituting 
fossil generators. Battery storage is indicated as one possible solution next to the upgrade of wind 
and pv generators, phase shifter in gas power plants and controllable reactive power compensation 
systems108. Revenues for the provision of such capabilities are not defined so far, but discussions 
have been started to extend ancillary service markets with new system services109.  

In the German grid development plan battery storage is also foreseen to increase grid utilisation 
and avoid grid congestions with the so called "grid booster concept"110. Three projects are currently 
foreseen  to  relieve  grid  congestions.  Investments  should  be  covered  under  the  grid  regulation 
scheme within a given amortisation time frame of 15 years, but conditions are not finally decided.  

In less interconnected systems with a high diffusion rate of renewable energies system splits could 
have a stronger impact on the system and would cause larger outage time for electricity users. For 
this reason, power system operators in Australia or Great Britain have worked on research projects 
and implemented demonstration sites that identified potential benefits of storage technologies for 
grid operation111. Potential revenues can come from market services, direct contracted services or 
regulated services as part of the grid regulation. Also direct funding with government support could 
be feasible. The discussion on market design to value the capabilities of storage technologies is 
ongoing112. 

Research activities of the Australian energy market operator (AEMO) identified the role that storage 
can play in the transition of the Australian power system113. Demonstration projects with battery 
storage  have  been  implemented  that  use  different  revenue  streams.  One  of  the  largest  battery 

107  https://www.netzentwicklungsplan.de/sites/default/files/paragraphs-files/Szenariorahmenentwurf_NEP2037_2023.pdf 

108  https://www.netzentwicklungsplan.de/sites/default/files/paragraphs-files/NEP_2035_V2021_2_Entwurf_Systemstabilitaet.pdf 

109  https://www.energate-messenger.de/news/215087/uebertragungsnetzbetreiber-fordern-aenderungen-am-energiemarktdesign 

110  https://www.netzentwicklungsplan.de/sites/default/files/paragraphs-files/NEP_2035_V2021_2_Entwurf_Teil1_0.pdf 

111  https://www.esig.energy/download/survey-of-grid-forming-inverter-applications-julia-matevosyan/?wpdmdl=7869&re-

fresh=60c1f40f22d5f1623323663 

112  https://esb-post2025-market-design.aemc.gov.au/ 

113  https://aemo.com.au/-/media/files/initiatives/engineering-framework/2021/application-of-advanced-grid-scale-inverters-in-the-

nem.pdf?la=en&hash=B4E20D68B23F66090ADA5FD47A50D904 

67 

 
                                                   
EnTEC – Study on Energy Storage 

projects  in  Australia  is  the  Hornsdale  power  reserve  project.  The  battery  receives  a  government 
support of AUD 4 million every year over ten years to provide 90 MW of frequency reserve, which 
represents 3.2 Euro/MW/h. Further storage projects in Australia that provide grid services are the 
Dalrymple battery project (30 MW/ 8 MWh) in South Australia, which is the first project with ad-
vanced inverter technology. It receives AUD 12 million funds from Australian government114. The 
largest planned grid-forming battery in the world will be constructed by Australian utility AGL. The 
250MW/250MWh Torrens Island battery will have an investment of 180 million dollars and should 
be operational in 2023115. Furthermore, the Australian renewable energy agency announced AUD 
100 million as direct funding for grid-forming inverters116 expecting to finance at least three pro-
jects. 

In Europe battery storage projects have been implemented under the enhanced frequency response 
(EFR) regime in UK. National Grid launched a 200 MW action in 2016 on EFR and selected 8 battery 
storage projects that receive GBP 9.44 MW/h over 4 years (10.7 Euro/MW/h).  

Scottish Green Battery Complex (Hunterston and Kincardine) will participate in National Grid's Scot-
tish Stability Pathfinder 2 tender, which seeks to address voltage and stability issues faced by the 
U.K.  electricity  grid.  The  battery  should  provide  grid  stability  services  and  power  management 
across the central belt of Scotland117. Parts of the battery revenue will be provided from this tender 
to the projects.  

3.3.1.2  Distribution infrastructure support 

Energy storage systems can secure a reduced demand taken from the grid and benefit from lower 
network charges. Investment deferral for distribution grids have been a main use case for storage 
project e.g., in California. Currently discussion on flexibility markets like Equigy118 are ongoing in 
Europe,  in  UK the  Piclo Flex  market  started to trade energy flexibility online  on an independent 
marketplace119. Storage can contribute its services via these platforms to grid operators, but distri-
bution grid related markets and potential revenues are still under discussion. In Germany incentives 
should be given to flexible demand and storage technologies to support distribution grid operators. 
Revenues could be given as a direct payment, if storage applications become controllable by grid 
operators. Another discussed option is a variable grid tariff in times of higher grid congestions. 

3.3.2  Capacity provision, capacity markets/auction 

Capacity markets are another option for storage technologies to generate revenues. Especially in 
power systems, where security of supply is in a strong focus, capacity markets have been imple-
mented in the past. Capacity markets can be set up with capacity payments or with quantity mech-
anisms.  

114  https://www.pv-magazine-australia.com/press-releases/grid-scale-escri-battery-charges-up-in-south-australia/ 

115  https://www.pv-magazine.com/2021/11/30/work-begins-on-250-mw-250-mwh-grid-forming-battery-in-australia/ 

116  https://www.pv-magazine.com/2021/12/30/australia-pours-funding-into-advanced-inverter-capability-batteries/ 

117  https://www.pv-magazine.com/2022/01/26/europes-largest-battery-storage-project-leverages-grid-forming-inverter-tech/ 

118  https://equigy.com/ 

119  https://picloflex.com/ 

68 

 
                                                   
EnTEC – Study on Energy Storage 

Under capacity payments storage technologies receive a payment for the provision of firm capacity, 
whereas under quantity mechanisms a specific capacity is auctioned or tendered and storage tech-
nologies receive the price bid from the auction or tender. In existing programs storage technologies 
have participated and won in auction to provide firm capacity. 

In  UK  already  in  2013  a  capacity  mechanism  was  proposed  that  has two types  of  auctions:  T-4, 
which is held four years in advance (capacity is not required until four years later), and T 1, which is 
held one year in advance. Battery storage participated in the auctions and won 252 MW (after 150 
MW and 500 MW) in recent auctions120. The clearing price for the T-4 auction was equal to GBP 18 
per kW and year (2.3 EUR/MW per h) for delivery in 2025 to 2026.  

Delivery year  

2017-
18 

2019-
20 

2018-
19 

2019-
20 

2020-
21 

2021-
22 

2022-
23 

2023-
24 

2024-
25 

2025-
26 

Main auction date—
years before delivery  

1 

1 

4 

4 

4 

4 

3 

4 

4 

4 

Price (£/KW per year)  

7 

0.8 

Capacity (GW)  

Total cost (£m, nomi-
nal)  

Source: EMR delivery body121 

54 

378 

4 

3 

19 

49 

18 

46 

23 

52 

8.4 

6.4 

50 

45 

16 

44 

18 

41 

30.6 

42 

956 

834 

1180 

423 

290 

698 

734 

1296 

Another revenue stream could be established when storage is combined with renewable generation 
and especially with PV generation. This allows the reduction of peak capacity and reduce grid con-
nection fees. Revenues are very location specific and related to network tariffs of the relevant grid 
level. 

3.4 

Assessment of revenue/cost gaps 

In this section, the potential revenue/cost gap selected business opportunities for energy storage 
is assessed. The analysis is conducted based on the technology data from Task 1 and the market 
indicator dashboard presented in the framework of Task 2.1. To illustrate the influence of different 
market conditions, costs, potential revenue and resulting revenue/cost gaps are calculated on an 
annual basis by distributing the necessary investment (including interest) and operational costs 
over the lifetime of the energy storage (annuity method). The reader should keep in mind that the 
assessment is performed without the use of an energy system model. It thus excludes interactions 
with the energy system. Possibilities for revenue stacking, which improve the business case of the 
storage technologies, are not considered, since assessing multi-use concepts would require to 
calculate the flexibility potential available for different purposes dynamically while also consider-
ing risk affinity, uncertainties and other factors relevant for a functioning multi-use concept. This 
analysis is performed for selected Member States and years. A comprehensive analysis of the indi-
vidual investment conditions in each member state and considering all possible business cases is 
beyond the scope of this report. 

120  Capacity Market auction results, KPMG, London https://assets.kpmg/content/dam/kpmg/uk/pdf/2021/03/kpmg-capacity-market-t-4-re-

sults.pdf. 

121  https://www.emrdeliverybody.com/CM/Capacity%20Auction%20Information.aspx 

69 

 
 
                                                   
EnTEC – Study on Energy Storage 

3.4.1 

Arbitrage trading on the day ahead spot market 

Various factors such as the expansion of renewables, the demand increase through sector integra-
tion, the phase-out of fossil power plants as well as recent political events have led to an increase 
of power prices as well as a general rise of the volatility of the power markets. As shown in Section 
3.2.1, this is the case throughout Europe. Consequently, arbitrage trading, i.e., profiting from power 
markets spreads by selling during peak price hours and purchasing power during periods of low 
prices using energy storage can become a functioning use case.  

To give an assessment of the approximate revenue/cost gap of this use case, we used the technol-
ogy data  from  Task  1.3 for  a  large-scale  short-term  storage.  Table  12  gives  an  overview  on  the 
parameters we assumed for this use case.  

Table 12 

Arbitrage trading parameter assumptions  

Parameter 

Storage type  

Storage capacity [MWh] 

C-Rate 

Lifetime [years] 

CAPEX [€/MWh] 

OPEX [% of CAPEX] 

Round trip efficiency [%] 

Lifetime [cycles] 

Interest rate [%] 

Annual cost of storage [EUR/a] 

Source: Task 1 / own assumptions 

Description 

short-term storage, large scale (LIB) 

1 

1 

15 

345000 

0.5% 

88% (2030: 90%) 

3000 

3% 

28899 

For our calculation of the use case spot market trading, we further assumed two variations:  

1)  The storage can make one full cycle per day. Furthermore, the average daily spread (i.e., be-

tween the highest and lowest price of the day) can be exploited. 

2)  The storage can make two full cycles per day exploiting both the highest and the second highest 

spread per day. 

Our calculation is based purely on techno-economic parameters and correspondingly not a mod-
elling task. Therefore, we do not cover any effect caused by the interaction of large-scale storage 
technologies with the market or cannibalisation effects. Additionally, we assume that the storage 
system can benefit from the full daily spread (and second largest spread). The calculation is based 
on the day-ahead prices (also presented in the market indicator dashboard). 

Table 13 and Figure 28 refer to spot market trading in France.  

70 

 
EnTEC – Study on Energy Storage 

Table 13 

Potential income from arbitrage trading for France Average spreads and po-
tential income from arbitrage trading using historical day-ahead market 
prices for France  

The indicator “Average daily spread second” refers to the spread between the second highest and 
the second lowest price per day. A negative “gap to business case” indicates positive revenue. 

2018 

2019 

2020 

2021 

2022 

2030 

EUR/MWh 

34 

27 

27 

76 

120 

25 

EUR/MWh 

29 

24 

23 

67 

106 

23 

Average daily spread 
(day-ahead market) 

Average daily spread 
second (day-ahead 
market) 

Income 1 cycle/day 

EUR 

10816 

8797 

8694 

24278 

38692 

8121 

Income 2 cycles/day 

EUR 

20231 

16463 

16121 

45670 

72736 

15707 

Number of cycles 
during lifetime (1 cy-
cle/day) 

Number of cycles 
during lifetime (2 cy-
cles/day) 

Gap to business case 
(1 cycle/day) 

Gap to business case 
(2 cycles/day) 

Source: Task 1 / own assumptions 

cycles 

5475 

5475 

5475 

5475 

5475 

5475 

cycles 

10950 

10950 

10950 

10950 

10950 

10950 

EUR 

21533 

23553 

23656 

8072 

6343 

24228 

EUR 

12119 

15886 

16229 

-13321 

-40387 

16642 

71 

 
 
 
EnTEC – Study on Energy Storage 

Figure 28 

Spot market trading using large-scale LIB storage, the case of France 

A negative gap to business case indicates that the potential revenue is positive. 

Estimated annual cost and revenue of arbitrage trading for  
France

r
a
e
y
/
R
U
E

80000

60000

40000

20000

0

-20000

-40000

-60000

2018

2019

2020

2021

2022

2030

year

income 1 cycle/day
gap to business case (1 cycle/day)

income 2 cycles/day
gap to business case (2 cycles/day)

Source: own calculation 

As visualised through the “gap to business case” in the figure, the earnings from arbitrage trading 
in the years 2018 to 2020 are not sufficient to compensate for the investment and operational costs 
of the storage system. The increased volatility of the day-ahead market prices in the years 2021 
leads to increasing income and consequently a positive estimated net revenue, if more than one 
cycle per day can be performed. For the first months of 2022, the results indicate that revenue is 
even slightly positive for one cycle per day. For the METIS modelling results for the year 2030, the 
recent  price  and  price  spread  increases  were  not  taken  into  consideration.  Consequently,  2030 
aligns with the years 2018-2020. As a result, the results indicate a substantial gap to business case, 
i.e., the revenue from spot market trading is estimated to be negative.  

It has to be noted that even for one cycle per day, the technology-specific maximum number of 
cycles for LIB given by Task 1 is surpassed.  

The analysis for France, thus, shows that arbitrage trading under the current conditions can gener-
ate positive net revenue, as long as battery deterioration is not an issue. A return to market condi-
tions similar to the years 2018-2020 would, however, lead to negative net revenues. 

72 

 
 
EnTEC – Study on Energy Storage 

Table 14 

Potential income from arbitrage trading for Germany 

Average spreads and potential income from arbitrage trading using historical day-ahead market 
prices for Germany 

2018 

2019 

2020 

2021 

2022 

2030 

EUR/MWh 

42 

EUR/MWh 

36 

31 

27 

33 

28 

82 

73 

150 

136 

21 

20 

Average daily spread 
(day-ahead market) 

Average daily spread 
second  
(day-ahead market) 

Income 1 cycle/day 

EUR  13439 

9899 

10639 

26348 

48333 

6998 

Income 2 cycles/day 

EUR  24982 

18534 

19672 

49705 

91862 

13711 

Number of cycles 
during lifetime  
(1 cycle/day) 

Number of cycles 
during lifetime  
(2 cycles/day) 

Gap to business case 
(1 cycle/day) 

Gap to business case 
(2 cycles/day) 

cycles 

5475 

5475 

5475 

5475 

5475 

5475 

cycles  10950 

10950 

10950 

10950 

10950 

10950 

EUR   17186 

20726 

19986 

4276 

-17709 

23627 

EUR  

5642 

12091 

10952 

-19081 

-61237 

16913 

The indicator “Average daily spread second” refers to the spread between the second highest and the second lowest price per 
day. A negative “gap to business case” indicates positive revenue. 

73 

 
 
 
EnTEC – Study on Energy Storage 

Figure 29 

Spot market trading using large-scale LIB storage, the case of Germany 

A negative gap to business case indicates that the potential revenue is positive. 

Estimated annual cost and revenue of arbitrage 
trading for  Germany

r
a
e
y
/
R
U
E

70000

20000

-30000

-80000

2018

2019

2020

2021

2022

2030

year

income 1 cycle/day

income 2 cycles/day

gap to business case (1 cycle/day)

gap to business case (2 cycles/day)

Source: own calculation 

Figure 29 visualises the revenue/cost gap for Germany. We do not assume a difference in the stor-
age investment or operational costs for different countries. Therefore, the storage annuity costs are 
equal throughout all cases we present here (for spot market trading). However, as shown in Figure 
29, market conditions for Germany are more positive than for France. The “gap to business case” 
for Germany is lower than for France. This is caused by higher price spreads in the day-ahead mar-
ket, which result from a higher share of renewables in the market and thus a more volatile supply 
side.  

In contrast, spot market trading in Spain is estimated to have a substantially large gap to business 
case under the market conditions of the 2018 – 2020 and to be having a negative revenue in 2021 
as well if only one cycle per day is assumed. 

Table 15 

Potential income from arbitrage trading for Spain - Average spreads and po-
tential income from arbitrage trading using historical day-ahead market 
prices for Spain 

The indicator “Average daily spread second” refers to the spread between the second highest and 
the second lowest price per day. A negative “gap to business case” indicates positive revenue. 

2018 

2019 

2020 

2021 

2022 

2030 

EUR/MWh 

19 

EUR/MWh 

17 

17 

16 

17 

15 

51 

46 

101 

89 

24 

23 

Average daily spread 
(day-ahead market) 

Average daily spread 
second (day-ahead 
market) 

Income 1 cycle/day 

EUR 

6040 

5521 

5535 

16284 

32592 

7965 

74 

 
 
 
 
EnTEC – Study on Energy Storage 

Income 2 cycles/day 

EUR  11569 

10517 

10484 

30935 

61140 

15596 

2018 

2019 

2020 

2021 

2022 

2030 

Number of cycles 
during lifetime  
(1 cycle/day) 

Number of cycles 
during lifetime  
(2 cycles/day) 

Gap to business case 
(1 cycle/day) 

Gap to business case 
(2 cycles/day) 

cycles 

5475 

5475 

5475 

5475 

5475 

5475 

cycles  10950 

10950 

10950 

10950 

10950 

10950 

EUR   24584 

25103 

25089 

14341 

-1968 

22659 

EUR   19056 

20107 

20141 

-310 

-30516 

15029 

Figure 30 

Spot market trading using large-scale LIB storage, the case of Spain 

A negative gap to business case indicates that the potential revenue is positive. 

Estimated annual cost and revenue of arbitrage 
trading for  Spain

r
a
e
y
/
R
U
E

80000

60000

40000

20000

0

-20000

-40000

-60000

2018

2019

2020

2021

2022

2030

year

income 1 cycle/day

income 2 cycles/day

gap to business case (1 cycle/day)

gap to business case (2 cycles/day)

Source: own calculation 

3.4.2 

Provision of frequency containment reserve 

Due to their technical characteristics, battery storage systems are actively involved in the FCR mar-
ket. While prices for activated  balancing  energy mainly compensate (partly) the procurement of 
energy, i.e., the loading of a storage, the provision of automated frequency reserve is attractive due 
to high prices for capacity.  

For  the  calculation  of  earnings  on  the  FCR  market,  we  assume  that  storage  costs  and  technical 
parameters are identical to the ones used for arbitrage trading122. Figure 31 shows the potential 

122  In recent years, the rules for the market for FCR have changed in many countries. Therefore, data availability for many countries and years is still 

limited. 

75 

 
 
 
 
                                                   
EnTEC – Study on Energy Storage 

earnings for Austria assuming the average contracted price of each quarter hour (symmetric) for 
the years 2020 and 2021. As can be seen, capacity prices and thus potential earnings have increased 
largely between both years. Correspondingly, as the same storage system would be used, providing 
primary reserve would be profitable in 2020 but even more in 2021 with net revenues of approx. 
160,000 EUR/MW. In France (Figure 32), earnings would have been slightly lower than in Austria 
due to a lower average level of capacity prices. This business case would, however, still be attractive 
for storage systems. 

Figure 31 

Provision of capacity to the FCR market using large-scale LIB storage, the 
case of Austria 

A negative gap to business case indicates that the potential revenue is positive. 

Estimated costs and earnings for the provision of 1 MW FCR 
capacity - Austria

a
/
R
U
E

200000

160000

120000

80000

40000

0

-40000

-80000

-120000

-160000

Source: own calculation 

2020

2021

year

potential earnings

gap to business case

76 

 
 
 
EnTEC – Study on Energy Storage 

Figure 32 

Provision of capacity to the FCR market using large-scale LIB storage, the 
case of France 

A negative gap to business case indicates that the potential revenue is positive. 

Estimated costs and earnings for the provision of 1 MW FCR 
capacity - France

a
/
R
U
E

200000

160000

120000

80000

40000

0

-40000

-80000

-120000

-160000

2020

2021

year

potential earnings

gap to business case

Source: own calculation 

3.4.3  Residential behind-the-meter storage technologies 

Due  to  the  fall of  PV  and  battery prices as well  as the  increase of retail  electricity  prices  (which 
particularly steep in recent years, see Section 3.2.4), self-consumption models are increasingly pop-
ular in Europe. While PV-storage systems also increase the self-supply of a household, the main 
driver for their installation are reduced electricity costs compared to buying electricity from the grid 
as well as a gradual reduction of feed-in tariffs in most European countries. In most countries, self-
consuming avoids grid charges and other fiscal charges. Battery systems increase the share of self-
generated electricity by storing excess energy during the day and covering the residential demand 
particularly in evening and night-time hours. Thus, storage systems reduce the amount of excess 
electricity that is curtailed or induced into the grid at comparably unfavourable rates. Correspond-
ingly, Klingler et al. (2019) expect to see 80 million residential battery systems by 2050 (90% of all 
households) in the EU-27+UK+NO+CH123. 

In  contrast to this, net  metering schemes, in which  energy that  is  induced back  into the  grid,  is 
rewarded  with  high  prices,  e.g.,  the  retail  price  (as  performed  in  NL  or  PL),  reduces  or  removes 
incentives for storage systems. 

For the calculation of indicative revenue/cost gaps for behind-the-meter systems, we, again, use 
cost estimations given in Task 1.3 for PV-home storage systems. As the storage systems used here 
are much smaller in size than the ones, we assume to participate in spot market trading, their CAPEX 

123  A. Klingler; S. Schreiber; A. Louwen (2019): Stationary batteries in the EU countries, Norway and Switzerland: Market shares and system benefits 
in a decentralized world. In: 2019 16th International Conference on the European Energy Market (EEM). 2019 16th International Conference on 
the European Energy Market (EEM), S. 1–5 

77 

 
 
 
                                                   
EnTEC – Study on Energy Storage 

is higher. We assume that the storage increases the share of the household demand covered be-
hind-the-meter by 13% compared to a PV system without storage124. For all cases assessed here, 
we further assume that self-consumption allows to save the full retail price including all charges 
and taxes. 

The reader should be aware that we used average values for our assessment. Depending on coun-
try-specific regulatory conditions, retail prices as well as the energy consumption profile of a house-
hold, individual results can vary substantially. 

Table 16 

Behind-the-meter self-consumption parameter assumptions 

Parameter 

Storage type  

Storage size [kWh] 

Lifetime [years] 

CAPEX [€/kWh] 

OPEX [% of CAPEX] 

Round trip efficiency [%] 

Lifetime [cycles] 

Storage annuity [EUR/a] 

Capital costs [%] 

Annual household electricity demand [kWh/a] 

Annual electricity demand electric vehicle [kWh/a] 

Self-consumption improvement through a storage system 

Source: Task 1.3 / own assumptions 

Description 

PV-home storage systems (LIB) 

2.5 

15 

1000 

1% 

88 

3000 

187.4 

1.5% 
3700125 

3500 
13%126 

Table  17  shows  the  results  for  the  savings  through  self-consumption  using  a  behind-the-meter 
storage system as well as the “gap to business case” for France and under the given assumptions 
outlined above. Furthermore, Figure 33, Figure 34 and Figure 35 illustrate the savings as well as the 
“gap to business case” for France, Germany and Spain.  

Retail prices in France increased slightly between 2018 and 2021 while remaining stable compared 
to prices on the day-ahead market. As illustrated in Section 3.2.4, France’s price level in general is 
comparatively low. As a consequence, savings from self-consumption are limited (while costs for 
storage are assumed to be the same as in other countries. As a result, Figure 33 shows that there is 
still aslight revenue/cost gap under the given assumptions.  

For  Germany,  savings are  much  higher  as  the underlying  retail electricity  price  is higher  than  in 
France, as a result, behind-the-meter storage systems generate a positive net revenue in all years 
considered. 

124  We are aware that this calculation is approximative, since the self-consumption rate depends vastly on the household load, the household de-

mand profile and the sizing of the storage. 

125  EU average residential demand 2019 - Odysee-Mure: Electricity Consumption per dwelling. Available online at https://www.odyssee-

mure.eu/publications/efficiency-by-sector/households/electricity-consumption-dwelling.html, checked on 7/20/2021. 

126  The self-consumption improvement through energy storage depends on multiple factors such as the residents’ behavior, the devices and appli-
ances used in a household, the socio-demographic background of the residents or the sizing of the system. Based on modelling experience 
from previous projects by Fraunhofer ISI, we assume – on average – the self-consumption rate of a household can be improved by 13% if a 
storage system is installed. 

78 

 
                                                   
EnTEC – Study on Energy Storage 

In Spain, net revenues are lower than in Germany, due to lower retail electricity prices, but we ob-
served that a positive net revenue would still be achieved. 

In general, there would be larger savings achievable for all countries if the household electricity 
demand  was higher,  e.g.,  if  a  battery  storage  is  combined  with  an  electric vehicle  (already  inte-
grated) or a heat pump.  

Table 17 

Behind-the-meter residential storage in France - Potential savings and gap to 
business case for residential behind-the-meter storage technologies. The 
case of France 

Retail price [EUR/kWh] 

Retail price Excluding VAT and 
other recoverable taxes and levies 
[EUR/kWh] 

Saving per kWh through behind-
the-meter-storage [%] 

Retail price savings behind the me-
ter [EUR/a] 

Gap to business case [EUR/a] 

Source: Task 1 / own assumptions 

2018 

0.18 

2019 

0.18 

2020 

0.19 

2021 

0.19 

0.15 

0.16 

0.16 

0.17 

100% 

100% 

100% 

100% 

166 

33.86 

172.74 

27.12 

180.23 

19.63 

180.93 

18.93 

Saving per kWh through behind-the-meter-storage refers to the share of the retail electricity 
price that can be saved through self-consumption. We assume that no fiscal charges are due for 
self-consumed electricity and therefore assume a value of 100%. 

Figure 33 

Savings and gap to business case for residential behind the meter storage. 
The case of France 

Retail price savings behind the meter [EUR/a] vs. annual storage 
cost for France

r
a
e
y
/
R
U
E

300

200

100

0

-100

2018

2019

2020

2021

year

Retail price savings behind the
meter [EUR/a]

Gap to business case [EUR/a]

Source: own calculation 

79 

 
 
 
 
 
 
EnTEC – Study on Energy Storage 

Table 18 

Behind-the-meter residential storage in Germany - Potential savings and gap 
to business case for residential behind-the-meter storage technologies. The 
case of Germany 

Retail price [EUR/kWh] 

Retail price Excluding VAT and other recov-
erable taxes and levies [EUR/kWh] 

Saving per kWh through behind-the-me-
ter-storage [%] 

Retail price savings behind the meter 
[EUR/a] 

Gap to business case [EUR/a] 

Source: Task 1 / own assumptions 

2018 

0.30 

2019 

0.30 

2020 

0.30 

2021 

0.32 

0.25 

0.25 

0.26 

0.27 

100% 

100% 

100% 

100% 

280.19 

-67.83 

279.21 

-66.85 

283.09 

-70.73 

298.86 

-86.50 

Saving per kWh through behind-the-meter-storage refers to the share of the retail electricity price 
that can be saved through self-consumption. We assume that no fiscal charges are due for self-
consumed electricity and therefore assume a value of 100%. 

Figure 34 

Savings and gap to business case for residential behind the meter storage. 
The case of Germany 

A negative gap to business case would indicate that the potential revenue is positive. 

Retail price savings behind the meter [EUR/a] vs. annual storage 
cost for Germany

r
a
e
y
/
R
U
E

300

200

100

0

-100

2018

2019

2020

2021

year

Retail price savings behind the
meter [EUR/a]

Gap to business case [EUR/a]

Source: own calculation 

80 

 
 
 
 
 
 
EnTEC – Study on Energy Storage 

Table 19 

Behind-the-meter residential storage in Spain - Potential savings and gap to 
business case for residential behind-the-meter storage technologies. The 
case of Spain 

Retail price [EUR/kWh] 

Retail price Excluding VAT and other recov-
erable taxes and levies [EUR/kWh] 

Saving per kWh through behind-the-me-
ter-storage [%] 

Retail price savings behind the meter 
[EUR/a] 

Gap to business case [EUR/a] 

Source: Task 1 / own assumptions 

2018 

0.24 

2019 

0.24 

2020 

0.23 

2021 

0.23 

0.20 

0.20 

0.19 

0.19 

100% 

100% 

100% 

100% 

227.45 

-15.09 

224.50 

-12.14 

212.33 

0.03 

217.43 

-5.07 

Saving per kWh through behind-the-meter-storage refers to the share of the retail electricity price 
that can be saved through self-consumption. We assume that no fiscal charges are due for self-
consumed electricity and therefore assume a value of 100%. 

Figure 35 

Savings and gap to business case for residential behind the meter storage. 
The case of Spain 

A negative gap to business case would indicate that the potential revenue is positive. 

Retail price savings behind the meter [EUR/a] vs. annual storage 
cost for Spain

r
a
e
y
/
R
U
E

300

200

100

0

-100

2018

2019

2020

2021

year

300,00

200,00

100,00

0,00

-100,00

Retail price savings behind the
meter [EUR/a]

Gap to business case [EUR/a]

Source: own calculation 

The revenue/cost gap for behind-the-meter storage systems depends not only on the avoided costs 
for electricity drawn from the grid but also vastly on the investment for storage systems. Figure 20 
illustrates the influence of upfront investment costs for a storage system in the case of Germany. 
As outlined above, the storage system is already attractive under the current conditions (CAPEX of 
1000  EUR/kWh),  but  net  revenues  would  further  increase  for  lower  storage  costs.  Therefore, 
measures that reduce the cost of storage systems should be strengthened in order to increase the 
attractiveness of behind-the-meter systems. 

81 

 
 
 
 
EnTEC – Study on Energy Storage 

Figure 36 

Influence of storage costs on savings and gap to business case for residential 
behind the meter storage (using a 2.5 kWh storage system) for Germany 

A negative gap to business case would indicate that the potential revenue is positive. 

Retail price savings behind the meter [EUR/a] vs gap to business 
case for different CAPEX for Germany

r
a
e
y
/
R
U
E

300

200

100

0

-100

-200

400

500

600

700

800

900

1000

CAPEX EUR/kWh

300,00

200,00

100,00

0,00

-100,00

-200,00

retail price savings behind the
meter [EUR/a]

gap to business case [EUR/a]

Source: own calculation 

82 

 
 
 
 
 
EnTEC – Study on Energy Storage 

3.5 

Survey results 

3.5.1  Meta data survey  

This survey was conducted by TNO on behalf of the EnTEC consortium, in the form of an online 
questionnaire coded in the Survalyzer environment. A full list of all questions and results is available 
as separate deliverable. Respondents were given the following background information: 

Thank you for participating in this questionnaire, which should only take approximately 15 minutes 
of your time. This questionnaire is conducted by the Energy Transition Expertise Center (EnTEC), a 
think tank collaboration of TNO, Trinomics and Fraunhofer, on behalf of the Directorate-General for 
Energy of the European Commission.  

The aim of this questionnaire is to provide valuable input on: 

 

 

Current and future uses of energy storage. 

Current and future revenue streams for energy storage. 

  Discrepancies between whole-system and private benefits of storage. 

 

Barriers and drivers for energy storage. 

The  responses  to  this  questionnaire  will  be  compiled  into  a  report  for  the  European  Commission, 
helping to inform its energy storage policy. Although energy storage technology is advancing rapidly, 
high-quality evidence on the current and projected future revenue streams for a wide range of energy 
storage technologies is scarce. Nevertheless, this evidence is needed to help the Commission identi-
fying key EU actions to support the development of electricity storage as a key flexibility tool, ensuring 
a level playing field and adequate economic signals. With this questionnaire, we aim to take a first 
step in closing this gap. 

This questionnaire includes four sections: 

 

 

 

Your affiliation 

Current revenues of energy storage technologies, projects or portfolio 

Revenues of energy storage technologies, projects or portfolio in the future (2030) 

  Drivers and barriers of energy storage in the EU 

Responses  to  this  questionnaire  are  collected  anonymously.  You  will  not  be  asked  for  your  name, 
company name, or any other personal details. Your anonymous responses will be stored securely by 
TNO, in compliance with Dutch and EU data protection regulation (see our privacy statement for more 
information).  

Invitations to complete the questionnaire were sent out by the European Association for Storage 
of Energy (EASE) to all of their members (including various associations) on the 23rd of March. In 
addition, the survey was shared with EGEC, GIE, Euroheat & Power and Solar Heat Europe. Respond-
ents were given until the 8th of April to complete the questionnaire; this was later extended to the 
13th of May. 

93 respondents filled out the survey. Not all of these respondents completed all questions. Valid 
responses to individual questions have been included in the analysis even if participants did not 
complete  the  full  questionnaire.  Figure  37  and  Figure  38  show  the  distribution  of  respondents 
across technologies and countries. Overall, our respondents provide a good cover of technologies 
and  locations;  there  are  higher  concentrations  of  respondents  in  particular  countries  (e.g.,  Ger-
many), which may be a result of the survey dissemination method, but since these countries are 
also the locations where energy storage investors are most active, the sample is still representative 
of the current state of the energy storage community.  

Responses have been used in the analysis as-is, with the exception of a small number of responses 
to the  questions asking for  technology  and/or  product  types. For these questions, responses of 

83 

 
EnTEC – Study on Energy Storage 

“Other, namely…” which clearly fit into one of the pre-defined categories have been changed to 
these  categories.  When  there  was  any  doubt  about  the  allocation  of  responses  in  the  “Other, 
namely…” category, they were left as-is.  

Figure 37 

Specified storage technology as part of the respondents‘ energy storage tech-
nology, project or portfolio  

40%

34%

Electrochemical - Classic batteries

Chemical - Hydrogen

Mechanical - Pumped Hydro

Thermal - Sensible Heat

Electrochemical - Flow batteries

Thermal - Latent Heat

Chemical - Power to Methanol/Gasoline

Chemical - Power to Methane

Mechanical - Adiabatic Compressed Air

Chemical - Power to Ammonia

Mechanical - Liquid Air

Mechanical - Diabatic Compressed Air

Thermal - Thermochemical

Other, please specify:

Mechanical - Flywheels

Electrochemical - Hybrid Supercapacitors

Electrical - Supercapacitors

Electrochemical - Electrochemical Recuperator

Electrical - Superconducting Magnetic Energy…

16%

11%

10%

8%

6%

6%

5%

5%

3%

3%

2%

2%

2%

2%

2%

Source: ENTEC analysis 

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

84 

 
 
EnTEC – Study on Energy Storage 

Figure 38 

Location(s) of respondents‘ technology, project or portfolio 

Germany
Spain
Netherlands
France
United Kingdom
Denmark
Belgium
Portugal
Ireland
Austria
Italy
Sweden
Greece
Czech Republic
Slovakia
Poland
Norway
Hungary
Switzerland
Slovenia
Romania
Other, please specify:
Lithuania
Finland
Cyprus
Malta
Luxembourg
Liechtenstein
Latvia
Iceland
Estonia
Croatia
Bulgaria

Source: ENTEC analysis 

0%

5%

10% 15% 20% 25% 30% 35% 40% 45%

3.5.2  Categorisation and definitions of energy storage services 

Energy  storage projects,  technologies  and  portfolios  can  provide  many  different  services  to  the 
energy system. These services are changing and growing with the growing need of flexibility in the 
energy system. In the meanwhile, different definitions of such services exist. To enable an accurate 
and consistent results from the survey we have followed the categorisation and definitions of en-
ergy storage services from EASE. These have been published recently and are available in the public 
domain. Definitions of these services have been shared within the survey and can be downloaded 
here.127 

127  https://ease-storage.eu/energy-storage/applications/ 

85 

 
 
                                                   
EnTEC – Study on Energy Storage 

Figure 39 

Categorisation of energy storage services used in the survey 

Source: EASE 

86 

 
 
EnTEC – Study on Energy Storage 

3.5.3  Current roles and revenues of energy storage 

Figure 40 shows the number of respondents that indicated that their energy storage technology, 
project or portfolio supplies a particular category of service. For each of the service categories, this 
is then further split out into services only for the respondents that indicated that they provided a 
service  in  this  category.  It  is  clear  from  this  figure  that  a  very  wide  range  of  services  is  already 
supplied by energy storage. Rather than contributing only in particular areas, storage is finding its 
way into a lot of different markets already. Generation support services and bulk storage services 
are currently dominant; within this category, arbitrage is the most mentioned service. Ancillary ser-
vices are the second largest group of services provided by energy storage. And within that group 
Frequency Containment Reserve is the dominant service provided.  

Services to support distribution networks and services to support behind-the-meter customer en-
ergy management are the least mentioned categories. Of course, these responses are specific to 
our sample, but they do suggest that energy storage is currently less active at distribution level and 
below, despite the significant demand for flexibility there. 

Figure 40 

Services provided by technology, project or portfolio 

Generation Support Services and Bulk 
Storage Services 

Arbitrage 

RES Curtailment Minimisation 

Ancillary Services RES Support 

System Electric Supply Capacity 

Seasonal Arbitrage 

Capacity Firming 

Support to Conventional Generation 

other 

Services to Support Distribution Infrastruc-
ture  

Contingency Grid Support 

Reactive Power Compensation 

Dynamic Local Voltage Control 

Distribution Grid Upgrade Deferral 

Intentional Islanding 

Cross Sectoral Storage 

other 

63% 

73% 

53% 

47% 

43% 

40% 

40% 

33% 

7% 

27% 

67% 

58% 

50% 

42% 

33% 

25% 

8% 

Services to Support Transmission Infra-
structure 

  Reactive Power Compensation 
  Transmission Support 
  Cross Sectoral Storage 
  Contingency Grid Support 
  Transmission Grid Upgrade Deferral 
  Power Oscillation Damping (POD) 
  Participation to Angular Stability 
  other 

Services to Support Behind the Meter 
Customer Energy Management  

  End-User Peak Shaving 
  Continuity of Energy Supply 
  Time-of-Use Energy Cost Management 
Maximising Self-Production & Self-Con-
sumption of Electricity 
  Electric Vehicle Integration 
  Particular Requirements in Power Quality 
  Compensation of Reactive Power 

Limitation of Upstream Disturbances 

other 

35% 

60% 

40% 

40% 

40% 

33% 

33% 

33% 

0% 

25% 

83% 

83% 

67% 

67% 

58% 

42% 

42% 

25% 

0% 

87 

 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
   
   
   
   
   
   
   
   
 
 
   
 
 
 
 
   
 
   
 
 
 
 
EnTEC – Study on Energy Storage 

Ancillary Services 

other 

Frequency Containment Reserve (FCR), prev. 
"Primary Reserve" 
Automatic Frequency Restoration Reserve 
(aFFR), prev. "Secondary Reserve 

Voltage support  
Manual Frequency Restoration Reserve 
(mFRR)  

Black Start 
New Ancillary Services (EFR, SIR, SI, DRR, FFR, 
FPAPR, RM, etc.)  
Replacement Reserve (RR), prev. “Tertiary Re-
serve”  

Frequency stability of weak grids  

Load Following  

other 

Source: ENTEC analysis 

49% 

79% 

67% 

54% 

54% 

46% 

42% 

38% 

33% 

25% 

8% 

6% 

Figure 41 shows how these service categories are translated into revenue streams. There is a diverse 
range of business models, but the results suggest that each technology group does have a domi-
nant source of income (see also detailed results in the appendix). Our respondents also indicate 
that value stacking is very important for many storage projects, technologies and portfolios, as most 
indicate a number of sources of revenue.   

For Chemical storage technologies, this group is dominated by hydrogen storage and clearly shows 
‘Generation Support Services and Bulk Storage Services’ as dominant revenue. Mechanical storage 
technologies, with pumped hydro as the main technology, have a more balanced revenue stream 
that is also dominated by ‘Generation Support Services and Bulk Storage Services’ but with ‘Ancil-
lary services’ as clear second source of revenue. The group of electrochemical batteries is domi-
nated  by  ‘Classic  batteries’  and  shows  ‘Ancillary  services’  as  dominant  revenue  and  ‘Generation 
Support Services and Bulk Storage Services’ as second best. The group of thermal storage options 
contains “Latent’ and ‘Sensible heat’ storage options and has ‘Services to Support Behind the Meter 
Customer Energy Management’ as clear dominant revenue. The respondents that indicated a mix 
of technologies in their portfolio have all but one ‘Classic batteries’ in their portfolio; as well indi-
cating that half of them have ‘Hydrogen storage’ in the mix. Hence, the Mixed group shows a bal-
ance between ‘Ancillary services’ and ‘Generation Support Services and Bulk Storage Services’.  

This indicates that energy storage policy that is intended to target the entire range of technologies 
should take into account that different technologies rely on different market mechanisms; there is 
no one size that fits all.  

88 

 
 
   
 
 
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
EnTEC – Study on Energy Storage 

Figure 41 

Share of revenue by service group and by technology in the present 

Technology group  Generation 

Support 
Services 
and Bulk 
Storage 
Services  

Services to 
Support 
Transmission 
Infrastructure  

Services to 
Support Dis-
tribution In-
frastructure  

Services to 
Support Be-
hind the Meter 
Customer En-
ergy Manage-
ment    

Ancillary  
Services  

Any other  
service 

Chemical 
Mechanical 
Electrochemical 
Thermal 
Mix 

59% 
49% 
28% 
0% 
35% 

14% 
12% 
3% 
5% 
0% 

9% 
16% 
4% 
13% 
4% 

1% 
1% 
10% 
73% 
9% 

3% 
21% 
54% 
3% 
35% 

13% 
0% 
1% 
8% 
16% 

Note: this analysis follows the definitions and descriptions of service segmentation provided by EASE128 
Source: ENTEC analysis 

3.5.4 

Future services and revenues of energy storage 

Figure 42 shows, for each of the respondents, the declared share of current revenues provided by 
each service category, and the expected shares in 2030. As this figure shows (see Figure 54 in ap-
pendix for further details), the average expected changes are relatively small, and most of our re-
spondents do not expect major changes in business models. Some outliers exist where respondents 
expect a shift in their dominant service provided and associated revenue.  

The results suggest that a more diverse business model with more value  stacking is likely for all 
technologies. The technology groups do however show some differences, although the number of 
responses do not allow firm conclusions. For chemical and mechanical storage technologies there 
is a small shift from arbitrage towards ancillary services, behind the meter and ‘other’ services. For 
electrochemical storage the shift in revenue is in favor of ‘Generation Support Services and Bulk 
Storage Services’ at the cost of the other services provided. For thermal storages the respondents 
indicate that the business model is diversifying.  

Respondents were also asked how confident they were that these revenue streams would add up 
to present a profitable business case. In general, respondents were confident, with 14% responding 
‘extremely confident’, 37% ‘quite confident’, 18% ‘somewhat confident’ and 16% ‘slightly confident’. 
Taken together with the previous results, this implies that respondents think that enough of the 
system value of storage can, in principle, be captured to warrant private-sector investment, even if 
this is not necessarily currently the case.  

128  https://ease-storage.eu/energy-storage/applications/ 

89 

 
                                                   
EnTEC – Study on Energy Storage 

Figure 42 

Comparison of revenue breakdown: present and 2030 

Source: ENTEC analysis 

100

80

60

40

20

0

0
3
0
2

t
n
e
s
e
r
P

0
3
0
2

t
n
e
s
e
r
P

0
3
0
2

t
n
e
s
e
r
P

0
3
0
2

t
n
e
s
e
r
P

0
3
0
2

t
n
e
s
e
r
P

0
3
0
2

t
n
e
s
e
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P

0
3
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t
n
e
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P

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3
0
2

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n
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r
P

0
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2

t
n
e
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r
P

0
3
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2

t
n
e
s
e
r
P

0
3
0
2

t
n
e
s
e
r
P

0
3
0
2

t
n
e
s
e
r
P

0
3
0
2

t
n
e
s
e
r
P

0
3
0
2

t
n
e
s
e
r
P

0
3
0
2

t
n
e
s
e
r
P

0
3
0
2

t
n
e
s
e
r
P

0
3
0
2

t
n
e
s
e
r
P

0
3
0
2

t
n
e
s
e
r
P

0
3
0
2

t
n
e
s
e
r
P

0
3
0
2

t
n
e
s
e
r
P

0
3
0
2

t
n
e
s
e
r
P

1

2

3

4

5

6

7

8

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42

Any other service
Ancillary Services
Support Behind the Meter Customer Energy Management 
Support Distribution Infrastructure
Services to Support Transmission Infrastructure

3.5.5 

Perceived opportunities, barriers and desired actions 

Figure 43 shows how respondents rank their perceived market or regulatory barriers for the de-
ployment of energy storage options. The perceived barriers that are ranked as most important by 
the respondents, are related to regulation and market access. The highest ranked one on average, 
interestingly, is ‘insufficient incentives for long-term storage’, which is also mentioned in the textual 
comments.  This  may  be  perceived  as  a  barrier  because  long-term  storage  becomes  particularly 
important in the absence of significant fossil fuel capacity. Therefore, attention for long-term stor-
age  has  only  increased  relatively recently,  and  energy  market  prices  do not  yet  vary  sufficiently 
across longer periods of time to warrant investment in long-term storage.  

The top four of dominant barriers is completed by the absence of long-term policy signals in gen-
eral, the issue of double taxation and grid charging, and the lack of a regulatory framework for local 
flexibility markets. Barriers related to bankability and standardisation are ranked next, clearly per-
ceived as secondary by the respondents but nevertheless still ranked high by many of them. More 
technical barriers, including technical limitations and incomplete data provision are ranked the low-
est. 

This suggests that it is not technology that is holding back storage deployment, that market oper-
ation (including financial markets) does present some barriers, but that especially long-term policy 
regulation and incentives are perceived to be missing. 

This is further confirmed by the (textual) answers to the questions about services that are currently 
not valued, and countries that current present the best locations for investment in energy storage. 
A  long  list  of  services  that  storage  owners  are  not  currently  rewarded  for  in  particular  member 
states is mentioned, ranging from short-timescale services such as fast frequency response, voltage 
support and virtual inertia to long-term services including grid upgrade deferral and energy secu-
rity.  

It is clear that no market exists in which storage operators are rewarded for all system services that 
they can or do provide, but also that there are significant discrepancies between different locations. 

90 

 
 
 
 
 
 
 
 
EnTEC – Study on Energy Storage 

When given the opportunity  to motivate their  choices  for particular countries, respondents also 
mention this, highlighting that some countries have better market access than others.  

The respondents’ policy wish list also corresponds to this. Many respondents are asking for a more 
consistent long-term energy storage vision in their particular member states; in addition, respond-
ents are asking for more technology-neutral, fair and universal access to markets, again giving ex-
amples of markets in which they are not currently allowed to compete, or policies that are aimed 
at reducing price variability through other means, therefore undercutting the business case for en-
ergy storage. 

Figure 43 

Most important market or regulatory barriers for the deployment of energy 
storage options  

Note that the final rank score is derived with the following weighing factors (Rank1 = 3; Rank 2 = 2; Rank 3 = 1) 
Source: ENTEC analysis 

91 

Rank 1Rank 2Rank 3Rank ScoreInsufficient incentives to long-term energy storage136152Absence of long-term policy signals / strategy87543Lack of a regulatory framework for local flexibility markets37730Double taxation / grid charging issues45426Bankability and perceived risk32114Lack of / inappropriate certification / guarantees of origin (GO) rules31213Absent / inadequate standardization & permitting rules13413Other22111Non-balancing ancillary services procurement issues21311Discriminatory network planning and procurement of distribution flexibility services12310Technical limitations1025Absent / incomplete data provision by network operators0113Wholesale market access / price formation issues0102Insufficient incentives to behind-the-meter energy storage0011 
 
 
 
 
 
 
EnTEC – Study on Energy Storage 

Figure 44 

Expected best locations for investing in energy storage, from the perspective 
of a private investor according to the respondents 

50%

45%

29%

21%

19%

19%

17%

17%

17%

17%

14%

14%

Germany
United Kingdom
Netherlands
Spain
Italy
Ireland
Other (incl. outside Europe), please specify:
Denmark
Belgium
Austria
Sweden
Portugal
France
Finland
Switzerland
Slovakia
Norway
Poland
Greece
Cyprus
Malta
Luxembourg
Liechtenstein
Iceland
Czech Republic
Slovenia
Romania
Lithuania
Latvia
Hungary
Estonia
Croatia
Bulgaria

10%

10%

7%

7%

7%

5%

5%

5%

2%

2%

2%

2%

2%

0%

10%

20%

30%

40%

50%

60%

Source: ENTEC analysis 

3.5.6  Discussion on survey results 

The  survey was limited  in scope  and  number of  participants. This makes it difficult to draw firm 
conclusions on the outcomes. Nevertheless, it provides important insight into the current state of 
the market, and the expectations of market participants. It is clear that energy storage is currently 
already  providing  a  wide  range of  services  and  expects  to  continue  to  do  so  in  the  future  with 
growing capacity and new services provided. Not all of these services provided and anticipated are 
currently monetized, leading to a gap between private and public values of energy storage, and 
therefore the  possibility of  socially  suboptimal  investment  levels.  It  is also  clear  that  there  is  no 
‘one-size-fits-all’ business model for each technology, although most technologies need to stack 
several value streams. The business models for storage options are expected to diversify further in 
the next decade.  

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Moreover, there are significant differences between member states in terms of long-term policy 
signals, market value drivers and market access. This suggests that there are countries with per-
ceived (high) market potential to invest in energy storage. But it should be clarified that the survey 
was not equally distributed over all countries.   

Nevertheless, the results suggest that more uniformity across member states, including a long-term 
vision  for  the  role  of  energy  storage,  as  well  as  fair  valuation  and  technology-neutral  access  to 
markets for all services that energy storage can provide, in all member states, will help close the 
gap between public and private values of storage and lead to more optimal deployment levels and 
locations.  

3.6 

Conclusions on market value of storage 

Several opportunities and business cases for storage technologies exist. Most profitable cases are 
the participation in ancillary services and arbitrage trading in power markets (with 2021 and 2022 
electricity prices). Market assessments and the derived market indicators show potential revenues, 
which are also confirmed by respondents to the survey. Experiences from implemented projects 
show that project developers and  storage operators typically  stack  different revenue streams to 
increase their profits. Therefore, market conditions and the regulatory framework are important to 
allow the stacking of different use cases. Valuation of potential benefits of storage technologies to 
the energy system is important. This is mentioned by survey respondents and can also be seen in 
the market indicator analysis. For use cases supporting transmission and distribution infrastructure 
typically payments or revenues  are project  specific.  Analysis of behind-the-meter  storage  shows 
that it is beneficial especially in member states that have higher residential electricity prices. Cost 
gaps in member states with lower electricity price (e.g., in France or Spain) would disappear if prices 
for storage technologies i.e., batteries further decrease.   

Conclusion on revenues and cost gaps based on market indicators 

Power market arbitrage:  

  Cost gaps existed in power markets before 2021. Power market prices and price spreads 

make storage technologies profitable in 2021 and 2022. 

  Calculation with expected electricity price levels in 2030 still shows cost gaps for storage. 

Price spreads are calculated on a lower level compared to 2021 

Ancillary service markets: 

  Highest revenues on FCR market, e.g. earnings in Austria 76,000 Euro/MW in 2020 and 

190,000 Euro/MW in 2021 makes use beneficial, but limited markets 

  On  aFRR  and  mFRR  markets  typically  lower  revenues  can  be  generated,  additional 
earnings from activated energy are possible, but trading strategies are more complex 

Other storage applications 

  Transmission/distribution  infrastructure  support:  Typically,  individual  payments  per 
project  with  payments  similar  to  FCR  payments,  e.g.  26,000  Euro/MW  per  year  in 
Australia. Use case stack revenues with other markets. 

  Capacity provision, capacity markets/auctions: Storage technologies receives a capacity 
payment for the provision of firm capacity (e.g. 20,000 Euro/MW per year, capacity mar-
ket UK). A specific capacity is auctioned or tendered and storage technologies receive 
the price bid from the auction or tender.  

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EnTEC – Study on Energy Storage 

  Reduction of peak capacity and reduced grid connection fees by storage operation along 
with PV generation is emerging with payments related to local grid fees and grid capacity 
prices. 

  Behind-the-meter storage is beneficial in member states with higher residential electric-
ity prices. Cost gaps disappear in member states with lower residential electricity prices 
if costs for storage technologies (batteries) further decrease.  

Conclusion on costs gaps based on stakeholder survey  

  Energy storage currently already supplies a very wide range of services across all 

categories. Storage is already playing a role in a lot of different markets.  
  A wide range of business models for energy storage exist. These differ across 

technologies, projects and storage project portfolios. Although each technology group 
has a dominant income stream, revenue stacking is important, as most respondents 
indicate a number of revenue streams.  

  Arbitrage is currently the dominant revenue stream overall, followed by the provision 
of ancillary services. Interestingly, services to transmission and distribution network 
operators are a relatively small component of reported revenues. Behind-the-meter 
storage services and revenue streams are relative low compared to the other categories 
of products/service.   

  Respondents do not expect their business models to change significantly towards 2030; 
although  typically  more  diversification  is  expected.  Respondents  are  highly  optimistic 
about the future business case and growth potential for energy storage. 

  A significant number of  barriers to energy storage deployment are mentioned by the 
respondents.  Regulatory  barriers  (e.g.,  related  to  market  access)  are  mentioned  most 
often,  followed  by  financial  barriers.  Technological  barriers  are  considered  least 
important by most respondents. 

  Most respondents indicate that fair access to technology-neutral competitive markets 
across the whole EU, including remuneration of energy system services that are currently 
not valued, would be the most desired way to support energy storage. There seems to 
be significant divergence between member states in terms of market access and level 
playing  field.  No  member  state  is  perceived  to  offer  both  perfect  market  access  and 
sufficient policy guidance. 

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4 

Policy and regulatory frameworks for energy storage 

This chapter aims to: 

  Analyse policy and regulatory issues for the development of energy storage in the EU; 
  Update the national fiches of the 2020 study on energy storage129; 
 

Identify policy & regulatory best practices and provide recommendations to support the devel-
opment of energy storage. 

The policy issues and best practices to energy storage covered in the 2020 study on energy stor-
age130 were classified in the following categories:  

  Public support and strategy;  
  Permitting;  
  Energy markets and capacity mechanisms;  
  Ancillary and grid management services;  
  Grid aspects;  
  Taxes & other levies;  
 
  Storage definition and other policy aspects. 

Involvement of network operators; 

This chapter should complement the 2020 study on energy storage and update its national fiches 
– the aim is to go beyond the analysis of the previous study and to analyse topics which were only 
partially or not covered in the first study, not to repeat the analysis or recommendations. The issues 
which are not re-assessed in this study are public support and strategy, involvement of network 
operators, storage definition, and other policy aspects. The results of this previous analysis and the 
identified best practices can be found in the 2020 study on energy storage commissioned by the 
European Commission.  

The topics analysed in this study do not necessarily represent the largest current issues to energy 
storage in the EU27. Next to this analysis, international (i.e. in non-EU countries) best practices for 
the development of energy storage are detailed where relevant. 

The following topics are analysed in this chapter: 

  Section 4.1: MS intentions regarding targets and a regulatory framework facilitating the deploy-

ment of storage 

  Section 4.2: Market design issues 
  Section 4.3: Long-duration energy storage; added to complement the 2020 study 
  Section 4.4: Double taxes, charges and grid tariff issues 
  Section 4.5: Non-discriminatory network planning 
  Section 4.6: Guarantees of origin for renewable energy; added to complement the 2020 study 
  Section 4.7: Contributions of thermal energy storage 
  Section 4.8: Permitting barriers and best practices 

The analysis for each main topic 4.1 to 4.6 is structured as follows (sections 4.7 and 4.8 use a tailored 
structure): 

1)  Review of the importance of the topic for energy storage 
Impact of the topic on the use cases defined in chapter 2 
2) 

129  Artelys, Trinomics and Enerdata (2020) Study on energy storage - Contribution to the security of the electricity supply in Europe. https://op.eu-

ropa.eu/en/publication-detail/-/publication/a6eba083-932e-11ea-aac4-01aa75ed71a1 

130  Ibid. 

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3)  Status of the topic in the EU27 

Furthermore, an analysis of the international landscape on national targets, support schemes and 
market design is conducted in section 4.2.3. 

4.1 

Analysis of MS intentions regarding targets and a regulatory 
framework facilitating the deployment of storage 

Summary of analysis of MS intentions and regulatory frameworks 

  National goals for  energy storage can provide a  positive  environment for energy storage, 

and are effective if supported by financing and regulative programs 
  Several Member States have now a legislative definition of storage  
  Goals for energy storage capacity to be installed have been announced by some Member 

States 

  Tenders for energy storage or RE combined with energy storage are an effective means to 

support investments in energy storage 

4.1.1 

Review of intentions and national regulatory frameworks for 
energy storage 

The “Study on energy storage – Contribution to the security of the electricity supply in Europe”131 
mentions that public support and strategy can be a barrier for energy storage. Therefore, intentions 
and regulations for energy storage in the EU are reviewed in this section. In the “Clean Energy for 
All Europeans Package”, storage is recognized as a competitive activity. Business cases in the energy 
sector are commonly built on expectations rather than on current circumstances due to long design 
and construction lead times and technical lifespans of the concerned assets. Hence, policies and 
national targets can incentivize energy storage technologies by providing investment security. In 
this section, EU regulations and policies regarding energy storage will be analysed, with a focus on 
the definition of energy storage, regulatory framework and incentive programs for energy storage. 

Why is a definition of energy storage needed? A definition of storage operators as a specific class 
of actors in the electricity sector can ensure they are treated specifically in the regulatory framework. 
Market access rules may otherwise discriminate against storage, as they were created for producers, 
traders/suppliers and (large) consumers. Also, in the absence of specific consideration for electricity 
storage, it can be treated as both consumer and producer of electricity and thus may have to pay 
double grid tariffs, taxes or fees. This negatively affects the business case of storage and does not 
reflect the benefits of storage to the system. If no definition of energy storage does exist, in order 
to address double grid charging or taxation grid tariffs, taxes or fee provisions need then to be 
adapted for each case, which complexifies regulation  and can result  in  the provisions not being 
technologically neutral. Moreover, all in all, a  specific definition of storage  in  national  law could 
increase  the  investment  security  and  therefore  support  the  deployment  of  energy  storage  sys-
tems132, 133. 

131  Trinomics (2020) Study on energy storage – Contribution to the security of the electricity supply in Europe. p.75 

132  Trinomics (2020) Study on energy storage – Contribution to the security of the electricity supply in Europe. p.77 

133  EU Directorate-general for internal policies (2015) Energy Storage: Which Market Designs and Regulatory Incentives Are Needed? Study for the 

ITRE Committee 

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The EU has defined energy storage, but this definition has not been adopted by all Member States 
yet. An EU definition of energy storage can be found in the Directive on the internal market for 
electricity134: ‘energy storage’ means, in the electricity system, deferring the final use of electricity 
to a moment later than when it was generated, or the conversion of electrical energy into a form of 
energy which can be stored, the storing of such energy, and the subsequent reconversion of such 
energy into electrical energy or use as another energy carrier”. It is to be noted that this definition 
does not only include storage systems reconverting energy to electricity, but also technologies with 
another energy carrier as output; this means that also e.g. hydrogen conversion and storage as well 
as heat pumps combined with thermal storage are regarded as energy storage systems. In the EU, 
storage and hydrogen are considered as main fields for research and innovation alongside with the 
International Thermonuclear Experimental Reactor ITER, digitalisation and Carbon Capture & Stor-
age. In the Strategic Action Plan on Batteries – Annex 2 to the Communication COM(2018)293 “Eu-
rope on the move”135, the plan to establish a European batteries value chain is described. This value 
chain should cover all steps from raw materials over cell component manufacturing, cell manufac-
turing, battery pack manufacturing and EV manufacturing to recycling. The steps to be undertaken 
development of the action plan are the following136: 

  Securing the sustainable supply of raw materials 
  Supporting European projects covering different segments of the battery value chain, including 

cells manufacturing 

  Strengthening industrial leadership through stepped-up EU research and innovation support 

covering the full value chain 

  Developing and strengthening a highly skilled workforce in all parts of the value-chain 
  Supporting a sustainable battery value chain – i.e., requirements for safe and sustainable bat-

teries production - as a key driver for EU competitiveness 

  Ensuring consistency with the broader enabling and regulatory framework 

These steps show that the initiatives and support from the European Union are directed mainly on 
research and innovation as well as on capacity building. 

4.1.2 

Status of national goals and regulations in the EU27 

Definition of energy storage in laws 

The EU Member States are obliged to transpose the electricity directive into national law, including 
the definition of energy storage. In most of the national regulatory frameworks in the EU, energy 
storage is, according to our research, not yet defined. Legal definitions could be identified in several 
Member States, as detailed in Annex 4.1. The national definitions are not unified but vary in each 
of these countries, as illustrated next. 

In the Belgian electricity law of the 13th of July 2017, electricity storage is defined as “any process 
whereby, through the same installation, electricity is withdrawn from the grid for the purpose to be 
completely re-injected into the system later on, subject to efficiency losses.” 

134  EU (2019) Directive 2019/944 of the EU parliament and the council on common rules for the internal market for electricity. Article 2, Paragraph 

(59) 

135  EC (2018) Annex to the Communication from the commission to the European Parliament, the council, the European Economic and social com-

mittee and the committee of the regions. Europe on the Move. COM(2018)293 final 

136  EC (2018) Annex to the Communication from the commission to the European Parliament, the council, the European Economic and social com-

mittee and the committee of the regions. Europe on the Move. COM(2018)293 final 

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In Poland, in May 2021 the bill of amendments to change the definition of storage was adapted to 
“conversion of the electricity, received from the electricity grid and/or generated by the generation 
unit connected to such electricity grid and cooperating with such grid, to another form of energy, 
storage of such energy and subsequent conversion thereof to electricity and injection to the grid”. 

The Spanish legislation defines owners of storage facilities as natural or legal persons that own 
facilities in which the final use of electricity is deferred to a time after it was generated, or that carry 
out the conversion of electrical energy in a type of energy that can be stored for the subsequent 
reconversion into electrical energy137. 

Romania  states  that  they  plan  to  “clearly  define  the  concept  of  energy  storage  in  the  primary 
law”138. 

In the Czech energy law, pumped hydro storage is not considered as storage but as a specific form 
of power generation.  

Finland defines electricity storage only concerning electricity and fuel taxes139.  

Germany has in June 2020 provided a dedicated definitionof energy storage.140 

Ireland has recently defined energy storage in Irish legislation under statutory instrument no. 76 
of 2022. 

Greece has defined hybrid installations where storage is a necessary part141. 

The Italian regulator has defined storage in the context of integration in the electricity system in 
its regulatory decision 574/2014/R/eel: “A storage system is a set of devices able to absorb and 
release electric energy, foreseen to work continuously in parallel to the grid or able to modify the 
energy exchange with the electricity grid. The storage system may or may not be integrated with a 
generating plant. Systems that enter into function only in emergency conditions such as during a 
black out are not considered to be a storage system.” This definition is provided by the national 
regulator; no legislative definition could be found. 

Energy storage goals and targets  

The current National Energy and Climate Plans (NECPs) apply to the period from 2021 to 2030 and 
focus on the 2030 targets. The reports comprise five sections: Decarbonisation (including green-
house  gas  emissions  and  renewable  energy),  Energy  Efficiency,  Energy  Security,  Internal  Energy 
Market and Research, Innovation and Competitiveness. Since the publication in 2021, the Member 
States are required to submit a progress report every two years.142 

Goals on energy storage are mentioned in five NECPs (see Table 20). Several European countries 
refer in their NECP to the increasing importance and the need of defining, supporting, and devel-
oping energy storage. This is commonly mentioned in the Chapters on dimensions of Energy Effi-
ciency, Energy Security and Innovation and Competitiveness. Storage of energy is often seen as a 
solution in providing flexibility and efficiency to the energy system as well as increasing the use of 

137  Royal Decree-Law 23/2020, of June 23, which approves measures in the field of energy and in other areas for economic reactivation. 

https://www.boe.es/buscar/act.php?id=BOE-A-2020-6621. Article 4, Three 

138  NECP Romania (2020) The 2021-2030 Integrated National Energy and Climate Plan, p. 114 

139  C. Andrey, P. Barberi et.al. (2020) Study on energy storage – Contribution to the security of the electricity supply in Europe 

140  https://www.energy-storage.news/germany-finally-gives-energy-storage-its-own-legal-definition/ 

141  Official Gazette (2006) Generation of Electricity using Renewable Energy Sources and High-Efficiency Cogeneration of Electricity and Heat and 

Miscellaneous Provisions law 3468/2006 

142  https://energy.ec.europa.eu/topics/energy-strategy/national-energy-and-climate-plans-necps_en [last access 22.04.2022] 

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renewable energies. The problem of high costs or double taxation for grid connected energy stor-
age facilities is mentioned frequently. 

In its 2021-2030 NECP, Croatia announces its plan for a total storage capacity of 150 MW by 2030 
through investments in various technologies, to be funded through the energy storage fund set up 
in 2019. France plans to commission 1.5 GW of pumped hydro stations between 2030 and 2035 
and includes energy storage in its ‘Batteries and Storage action plan’ to support the development 
with funding of 20 million EUR. In Germany, the Ministry of Economic affairs and energy disposes 
of  a  budget up  to  1  billion  EUR  until  2022  to  support  investments  and  development  of  energy 
storage. Italy plans new storage systems with a capacity of at least 6 MW by 2030. 

Since the finalisation of the 2021-2030 NECPs, some countries have announced new storage goals: 
Greece announced in 2022 to double its 2030 energy storage target to 3 GW. Spain published its 
storage strategy in February 2021, aiming to install 20 GW of storage capacity by 2030 and to reach 
30 GW by 2050 (starting from today’s 8.3 GW). 

Table 20 

Energy storage goals and targets in EU Member States 

Country 

Croatia 

France 

Italy 

Greece 

Spain 

Goal or target 

Source 

150 MW of energy storage by 2030 

NECP Croatia p.162143 

1.5 GW of pumped energy transfer stations 
(pumped hydroelectric storage systems) to be 
commissioned between 2030 and 2035 

6 GW of energy storage by 2030 (composed of 
pumped hydro, centralized electrochemical as 
well as 4 GW distributed storage facilities) 

NECP France p.125 

NECP Italy pp.99 

3 GW of energy storage by 2030 

20 GW of storage capacity in 2030, 
30 GW by 2050 

144 

145 

Some countries have special laws on energy and storage, subsidy programs and/or regulations. In 
these countries, generation and use of renewable energies as well as development of renewable 
energy  systems  is  more  commonly  addressed  than  electricity  storage.  In  the  Austrian  National 
Electricity Act (“ElWOG”), energy storage is referred to as one of the components that will play an 
increasing role in the Austrian and European electricity systems. In the Netherlands, since 1st Jan-
uary 2022, storage of energy is not subject any more to double taxes146. 

Specific support for energy storage in EU MSs 

In most EU Member States, there is no direct funding for large-scale deployment of energy storage. 
Only few countries such as Germany and Austria offer direct support for batteries in small scale 
applications. Some countries offer support for electric vehicle purchase. Financial support focuses 

143  The final National Energy and Climate Plans are available at https://ec.europa.eu/info/energy-climate-change-environment/implementation-

eu-countries/energy-and-climate-governance-and-reporting/national-energy-and-climate-plans_en 

144  https://www.energy-storage.news/events/why-greece-is-becoming-a-key-energy-storage-market-hub-for-europe/ [last access 22.04.2022 

145  https://renewablesnow.com/news/spanish-govt-approves-energy-storage-strategy-sees-20-gw-in-2030-730720/ [last access 22.04.2022] 

146  Renewable energy policy database and support:  Netherlands (res-legal.eu) [last access 22.04.2022] 

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mainly on R&D activities (e.g. in Austria, Bulgaria, Croatia, France, Germany, Luxemburg, Slovenia, 
Spain) and building up battery production capacities.  

Germany  has  the  largest  penetration  of  PV  home  storage  systems  with  about  750 MWh  newly 
installed energy storage capacity in 2020147. Germany had a support program for home storage 
systems in place between 2013 and 2018, followed by ‘Bundesland’-specific support schemes af-
terwards148. The support applied to small scale storage systems coupled to newly built PV systems. 
The market uptake was a clear result of the support scheme. Supporting this development is related 
to the fact that the electricity prices level and volatility are relatively high in Germany, which favours 
the economic viability of battery systems. 

Large scale projects are in some EU MSs incentivized by tenders, such as in France149 (tender for 
batteries only), Germany150 and Hungary151 (tenders combined with RE technologies in both coun-
tries). Greece has announced a 700 MW battery tender for 2021/2022152. Tenders clearly set a de-
mand for electricity storage and reduce the investment risks by offering longer-term contracts. 

147  EES (2022) Europäischer Photovoltaik-Heimspeichermarkt wächst. https://www.ees-europe.com/markttrends/europaeischer-pv-heimspeicher-

markt 

148  LG home battery blog (2021) Electricity storage subsidies in Germany. https://lghomebatteryblog.eu/en/electricity-storage-subsidies-in-ger-

many/ 

149  https://www.energy-storage.news/a-very-good-year-france-toasts-rapid-energy-storage-growth/ 

150  https://www.energy-storage.news/solar-plus-storage-projects-win-258mw-of-capacity-in-germanys-latest-renewable-energy-auction/ 

151  Renewables Now (2022) Hungary opens tender for 864 GWh of renewable power. https://renewablesnow.com/news/hungary-opens-tender-

for-864-gwh-of-renewable-power-775890/ 

152  Sdhakjf Greekreporter (2021) Energy Storage: Is Greece Becoming Europe’s Battery? https://greekreporter.com/2021/11/02/greece-energy-

europe-battery/ 

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4.2 

Market design issues for energy storage 

Summary of market design issues 

  Significant progress has been made in the removal of entry barriers for storage and other 
flexibility sources with the adoption and implementation so far of Clean Energy Package 
  Some remaining national barriers to entry in spot and balancing markets, (various issues 
related to need for revision of certain market and product characteristics as well as, for 
balancing, of overall market rules to allow the participation of storage in specific Member 
States) should be further addressed when policy makers, regulators and TSOs adapt their 
national  legislation  and  regulation  (including  terms,  conditions  and  methodologies 
related), which is on-going in several Member States 

  A  regulatory  framework  for  the  procurement  of  flexibility  by  DSOs  providing  a  level 
playing field for flexibility sources is still missing or in development in several Member 
States. Local flexibility platforms and market initiatives with the participation of DSOs, 
mostly pilots, are however on-going in several Member States, with a concentration of 
such initiatives in DE, FR, NL 

  System  operators  are  gaining  more  experience  in  adapting  contracts  for  services 
procured in order to allow further value stacking by storage operators. Energy storage 
facilities in 6 out of the 7 MSs assessed have some level of value stacking (using a single 
storage asset to benefit of multiple revenue streams). However, value stacking is often 
only accepted between a few specified services, and further improvements are welcome 
to accept stacking of as many services as possible 

  The provision of ‘conventional’ non-frequency ancillary services such as voltage control 
and black start was up until 2020 often not remunerated by network operators, or not 
accessible to storage. This situation is understood not to have changed significantly. 
  Many storage technologies are well-suited to provide or support the provision of new 
ancillary services such as fast frequency response or synchronous inertia, which could 
thus  represent  a  relevant  revenue  stream.  The  need  for  procurement  of new  ancillary 
services in the Continental Europe Synchronous Area and Nordics is currently limited, 
and thus procurement is mainly limited to the Irish SEM and the Baltic countries. There 
is therefore limited experience by network operators in the procurement of these new 
services.  Nonetheless,  Swedish  and  Italian  TSOs  have  implemented  Fast  Frequency 
Response procurement schemes.  

  The  representation  of  locational  aspects  and  provision  of  locational  information  to 
market  parties  could  be  improved,  with  CEP  provisions  expected  to  have  a  positive 
impact in the configuration of bidding zones in the coming years. There is no centralised 
platform for the provision of intra-zonal congestion information 

4.2.1 

Review of elements concerning electricity market design 

As shown  in chapter 2, opportunities for storage  exist  in  multiple markets and end-user energy 
management applications across the EU27. Access to different markets and procurement mecha-
nisms brings additional revenues and reduces the dependency of storage operators on one or few 
revenue streams. Efficient price formation in various markets reveals the actual flexibility needs and 
provides  appropriate  investment  and  operational  signals  to  operators  of  flexibility  resources, 
among which storage. 

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EnTEC – Study on Energy Storage 

This section analyses how the current electricity market design at the EU and Member State level 
allows for the participation of storage and values the flexibility services provided by storage. This is 
critical  for  allowing  storage  operators  to  capture  the  existing  market  opportunities  identified  in 
chapter 2. 

In this study, electricity market design also refers to the non-market-based procurement of ancillary 
services, as the article 31 of the Electricity Directive 2019/944 comprises a requirement for TSOs to 
switch to market-based procedures (unless NRAs deem this would have detrimental effects due to 
e.g. the possibility of strategic behaviour by market participants). 

End-user energy management applications complement the market opportunities available to stor-
age. This section is focused on active participation of storage in electricity markets. Therefore, end-
user energy management is not addressed, unless relevant also to active provision of storage ser-
vices. Behind-the-meter storage technologies such as home and mobile (EV) batteries coupled with 
PV enable the concerned end-users - without the need for specific regulatory provisions - to opti-
mise their demand pattern based on network tariffs and commodity price signals.    

The Study on Energy Storage153 provided a comprehensive analysis of the new electricity market 
design arising from the revised Electricity Directive and Regulation. Therefore, the present analysis 
focuses on additional issues and data sources not covered in that study. 

The issues analysed can be separated in two categories: 

  Market design aspects which are defined in the Electricity Target Model (ETM)154 but for which 
further implementation efforts by Member States and NRAs (and monitoring by the European 
Commission and ACER) are on-going; and 

  Market design aspects which are not defined (or only at a high-level) in the ETM, and for which 
further actions at the EU level might be warranted – ranging from changes to the ETM to non-
legislative actions such as dissemination of best practices by the European Commission. 

Thus, the issues analysed in this section comprise: 

Lack of a proper legal framework to enable new entrants and small players 

 
  Electricity price limits and restrictions on balancing market design 
  Restrictive requirements to participate in capacity mechanisms 
  Restrictive requirements in prequalification and/or the design of balancing products 
  Maturity of framework to value distributed flexibility sources and revenue stacking 
  Emergent state of new ancillary services 
  Provision of locational signals and information to market parties 
  New Guidelines on State Aid for Climate, Environmental Protection and Energy 

The issues assessed in this section affect practically all storage technologies surveyed in chapter 1 
capable of providing services in the electricity sector. Regarding the use cases analysed in chapter 1, 
the main ones impacted concern ‘generation support services and bulk storage services‘, and ‘an-
cillary services‘. More specifically, a significant part of the analysis of this section focuses on the 
design of spot and balancing markets in the EU, which are critical for enabling storage operators to 
provide arbitrage and balancing services, respectively. The section also analyses the design of ca-
pacity mechanisms to procure ‘electricity supply capacity’ services from all flexibility sources, in-
cluding storage, in an objective and non-discriminatory. Finally, specific attention is dedicated to 

153  Artelys, Trinomics and Enerdata (2020) Study on energy storage - Contribution to the security of the electricity supply in Europe 

154  Although not formally defined in EU legislation, the Electricity Target Model is the collection of electricity market design features which should 
be implemented across the EU as defined in the Electricity Directive, Regulation as well as other legislation such as the network codes and 
guidelines. ACER itself makes use of the term in the Market Monitoring Reports, most recently in ACER (2022) Market Monitoring Report 2020 
– Electricity Wholesale Market Volume. 

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discuss the procurement of new ancillary services by system operators. Therefore, the issues dis-
cussed in this section should have a direct impact on the ability of storage operators to provide 
important services, given that chapter 2 indicates that currently arbitrage and the provision of an-
cillary services are the main revenue streams. 

4.2.2 

Status in the EU27 

4.2.2.1  Lack of a proper legal framework at national level to enable new 

entrants and small players 

In order for storage operators and other market participants employing storage to be able to ac-
tively participate in electricity markets, first the appropriate legal framework must be in place. We 
analyse here the national progress towards the implementation of relevant provisions of the Clean 
Energy Package and provide relevant best practices. A few countries (Germany, Denmark, France 
and  Hungary)  are  frontrunners  regarding  a  legal  framework  for new  entrants  and  small  players, 
such as (independent) aggregators and active consumers. Progress has been made since the entry 
into force of the revised Electricity Directive and Regulation, and Member States are expected to 
make further improvements at the national level for removing entry barriers for front-of-the-meter 
storage and the different market actors directly or indirectly employing behind-the-meter storage. 

The analysis of the updated national fiches on policy & regulation from the 2020 study on energy 
storage155 (presented in a separate annex) indicates that several Member States have updated in 
2021-2022  or  plan  to  update  their  regulatory  framework  to  address  storage,  such  as  the  Czech 
Republic (amendment to the Energy Law), Estonia (Electricity Market Acts), and Portugal (Decree-
law 15/2022). 

Provisions for a level-playing field for demand side flexibility, which directly impacts behind-the-
meter energy storage, are set in the Electricity Directive 2019/944, such as articles 6-8, 18, 20-22 of 
the Electricity Regulation and articles 11, 13 or 17 of the Electricity Directive. But the provisions were 
still  not  yet  implemented  in  most  MS  at  the  transposition  deadline  of  end  of  2020.  Since  then, 
Member States have made progress in transposing the Directive provisions regarding demand side 
flexibility, but much work remains. The upcoming demand response network code is discussed in 
section 4.2.2.5. 

By the end of 2021, out of 11 Member States surveyed by the smartEn study,156 France and Slovenia 
had  adequately  transposed  the  Electricity  Directive  article  17  provisions  for  demand  response 
through aggregation. However, several other countries had planned further actions in this regard, 
and for example balancing markets have been opened for aggregation in Germany, Italy, and Spain. 

One of the important barriers for independent aggregators is the necessity of prior consent by 
suppliers, as required by article 13(2) of the Electricity Directive. Some MS still had at the end of 
2021 no legal provisions forbidding suppliers to discriminate against customers that have a contract 
with an aggregator, for example Greece, Ireland and Spain157, as required by article 13(4) of the 
Electricity Directive. A method for calculating financial compensation for electricity suppliers during 
activation of demand side response is developed in for example France, Italy, Slovenia and Romania.  

155  Artelys, Trinomics and Enerdata (2020) Study on energy storage - Contribution to the security of the electricity supply in Europe. https://op.eu-

ropa.eu/en/publication-detail/-/publication/a6eba083-932e-11ea-aac4-01aa75ed71a1 

156  smartEn (2022) The Implementation of the Electricity Market Design to Drive Demand-side Flexibility 

157  smartEn (2022) The Implementation of the Electricity Market Design to Drive Demand-side Flexibility 

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EnTEC – Study on Energy Storage 

Appropriate legal provisions for active consumers (AC) matters for small-scale consumers (includ-
ing those employing behind-the-meter storage) willing to participate in energy markets. Without 
such a framework it will not be possible for AC (and BtM storage) to participate in the different 
markets. Active costumers (AC) had, at the end of 2020, the possibility to participate directly in DA, 
ID and balancing markets in 9 MSs. However, in Portugal for example, direct participation of AC is 
still not allowed in balancing markets as required by the Electricity Directive, hindering the business 
case for energy storage – even if steps have already been taken to allow the participation through 
aggregators. In some MSs (Germany, France, Hungary and Slovenia) it was possible for AC to pro-
vide re-dispatching and other congestion management services for TSOs. In 14 MSs, DA, ID and 
balancing markets were open to aggregators (another requirement of the Electricity Directive), the 
provision by aggregators of redispatch services to TSOs was allowed in 11 MSs.  

Moreover, independent aggregators158 faced more challenges than aggregators/suppliers do. In 
some MSs independent aggregators could still not participate in DA and ID markets in the end of 
2021  (as  required  by  the  Electricity  Directive),  for  example  in  Spain159  although  the  Decree-law 
23/2020 created the figure of the independent aggregator and further progress is expected in this 
regard.  In  2021,  in  the  context  of  the  Recovery  and  Resilience  Plan,  the  Spanish  government 
launched a call for expressions of interest to identify action lines for smart grids, storage and flexi-
bility – which included the topic of independent aggregation160. 

4.2.2.2  Price limits in spot and balancing markets and other restrictions 

on balancing market design161  

This section analyses issues related to price limits in electricity markets and restrictions on balancing 
market design. Specifically, it assesses when such price limits or restrictions are not compliant with 
provisions of the Electricity Regulation or balancing guidelin and represent a barrier to a level play-
ing field to all flexibility solutions, including storage. 

Price limits across the market timeframes distort the ability of price signals to reflect actual system 
conditions, including scarcity or excess supply. Also, if applied in only certain Member States, price 
limits lead to cross-border distortions of the internal electricity market162. Moreover, price limits can 
act as an anchor, with market participants more likely to use the limit as a reference163 instead of 
basing their bids purely on the analysis of the market conditions. Given that arbitrage in electricity 
markets is an important revenue stream for various storage technologies, price limits hampers price 
signals and reduce price differentials in time and thus reduce the willingness of storage operators 
to invest and to offer flexibility in the market. 

Price limits can have a technical or non-technical character. Non-technical price restrictions refer 
to market design characteristics such as price caps or floors. According to the Electricity Regulation 
article 10.1, there shall be neither a maximum nor a minimum limit to the wholesale electricity price. 
This requirement applies to, inter alia, bidding and clearing in all market timeframes.   

158  Aggregators not affiliated to a customer’s supplier 

159  smartEn (2022) The Implementation of the Electricity Market Design to Drive Demand-side Flexibility 

160  https://www.miteco.gob.es/eu/prensa/ultimas-noticias/el-miteco-lanza-una-expresi%C3%B3n-de-inter%C3%A9s-para-identificar-l%C3%AD-
neas-de-actuaci%C3%B3n-en-redes-inteligentes-almacenamiento-energ%C3%A9tico-y-flexibilidad/tcm:35-522263?msdynttrid=MUqIQ41IT-
pDb0deIYcvFCg4zocJLVf5IxTz8MK9k3xc 

161  Unless mentioned this section is based on ACER (2022) Market Monitoring Report 2020 – Electricity Wholesale Market Volume 

162  ACER (2022) Market Monitoring Report 2020 – Electricity Wholesale Market Volume 

163  DNV (2021) Study on a Methodology to Benchmark the Performance of the Eu Member States in Terms of: I) Efficient Price Formation; and Ii) 

Easy Market Entry and Participation for New Entrants and Small Actors 

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EnTEC – Study on Energy Storage 

While a  small number of Member States still  had  some  sort of price limits in  day-ahead and/or 
intra-day markets in 2020, this had been addressed by 2021. ACER however has introduced a tran-
sitory price limit of 15 000 Euro/MWh until July 2026, ‘for mitigating the possible risks of the initial 
phase of the European balancing platforms’ go-live and to allow TSOs and market participants to 
gather experience on their functioning‘164. 

Article 10(1) of the Electricity Regulation is without prejudice to the technical price limits which may 
be  applied  in  the  day-ahead,  intraday and  balancing timeframes.  Technical  price  limits  are  set 
mainly for improving the efficiency of market clearing algorithms and at a level that they should 
not restrict the bids of market operators, and NEMOs  should take measures to adjust the limits 
before they are reached. Price limits for balancing markets are however not harmonised across the 
EU, except for the technical price limits for balancing energy (+/-99,999 Euro/MWh).165 The go-live 
of the balancing energy exchange platforms will make these price limits applicable to national mar-
kets. In the 2018-2020 period, some balancing markets reached price limits a number of times (IE, 
DE, EL, IT, RO)166. 

Marginal pricing is the method for pricing of balancing energy markets mandated by Electricity 
Regulation. However, methods other than marginal pricing, such as regulated pricing, pay-as-bid 
or hybrid methods were used in several MSs across all balancing timeframes (4 MSs for FCR, 12 for 
aFRR, 11 for mFRR, and 3 for RR in 2020). This is detrimental for storage and other small and new 
flexibility sources because other methods require them to estimate the correct bid to be ‘in-the-
money’, while they will often not be the market clearing price-setting technology. 

In addition, in balancing markets, dual pricing (that is, separate prices for imbalances against and 
in the direction of system imbalances) is less cost-reflective compared to single pricing. Single pric-
ing  provides  to  all  Balancing  Responsible  Parties the  same  signal on  system  imbalance,  thereby 
rewarding BRPs which reduce the system imbalance to the same extent that is penalises those which 
increase it. Single pricing is more beneficial than dual pricing for the deployment of energy storage 
since  it  provides  more  adequate  economic  insights  on  system  imbalances.  In  2020  11  Member 
States had some sort of dual pricing in place167.  

Moreover,  shorter  imbalance  settlement  periods  (timeframe  of  15  minutes)  should  be  imple-
mented according  to  article  8(4) of  the  Electricity Regulation  to  better  reflect  the  actual  system 
imbalances and thus the real value of capacity and energy, and therefore provide better incentives 
for energy storage operators, who can adjust injections and withdrawals in this timeframe. Shorter 
ISPs also support trading in the intra-day timeframe. Derogations on the ISP may be granted by 
regulatory authorities until 31 December 2024. In 2020, most MSs still had an ISP longer than 15 
minutes.  

4.2.2.3  Restrictive requirements in prequalification and/or the design of 

balancing products 

Design elements of national balancing markets168, such as regulated or pay-as-bid pricing, pro-
rata activation of balancing reserves, long procurement lead times, balancing prices predetermined 
in capacity contracts and restrictions to submit free energy bids (that is, energy bids not associated 

164  https://www.acer.europa.eu/events-and-engagement/news/acer-has-decided-amendment-common-pricing-methodology-european 

165  ACER Decision No 01/2020 

166  ACER (2022) Market Monitoring Report 2020 – Electricity Wholesale Market Volume 

167  ACER (2022) Market Monitoring Report 2020 – Electricity Wholesale Market Volume 

168  Meaning here the organised markets for TSOs managing residual imbalances – the trades of market participants in spot and other markets to 

reduce their own imbalances is not covered here. 

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EnTEC – Study on Energy Storage 

with a reserve bid) can negatively influence wholesale electricity prices and therefore increasing the 
cost of providing flexibility. Moreover, some features of balancing markets, for example long deliv-
ery periods and large minimum bid sizes, limit participation of energy storage. In this section, design 
elements of balancing markets and how they affect energy storage are discussed.  

  Duration of the delivery period: TSOs prequalify balancing service providers (BSPs) for a min-
imum and maximum duration of delivery period during which they should be able to deliver 
the requested change of injection or withdrawal. The Electricity Target model sets a minimum 
delivery  period  of  5  minutes  for  mFRR  balancing  products  and  60  minutes  for  standard  RR 
balancing products169. Five Member States (SI, FI, SK, AT, DE) had a maximum delivery period 
of 4 hours or more for mFRR. This can form a barrier, especially for behind-the-meter storage, 
which may be limited in its capacity to sustain a charge or discharge for 4 hours. 

  Minimum bid size and possibility of aggregation: According to the Electricity Target Model 
the minimum capacity of the energy bid for standard balancing products shall be 1 MW for all 
reserve types,170 and aggregation should be allowed. In some MS minimum bid sizes are still 
above the value of 1 MW and/or aggregation of bids is still not allowed. A high minimum bid 
size can hinder participation of small energy storage operators, particularly if aggregation is 
also not allowed.   

  Procurement lead-time and balancing capacity contract length: Long procurement lead-
times (the time from contracting of a balancing capacity service to delivery) may represent entry 
barriers to flexibility sources such as demand response but also energy storage, given the un-
certainty of energy prices in the long-term and the opportunity cost associated with reserving 
the  storage  capacity  for  delivery.  Storage  operators  may  have  nonetheless  a  preference  for 
longer  procurement  lead  times  and  balancing  capacity  contract  lengths  in  order  to  provide 
revenue certainty for investments. Nonetheless, from a system perspective shorter lead times 
and contract lengths are still preferred in order to not discriminate any flexibility source and to 
“allow for efficient arbitrate between day-ahead and balancing capacity markets”. In 2020, sev-
eral Member States still contracted balancing capacity a month or even year ahead, including 
LT, SK, SI, HR, CZ, and HU171.   

4.2.2.4  Restrictive requirements to participate in capacity mechanisms  

Capacity mechanisms are measures taken in support of medium and long term electricity supply 
security. Capacity mechanisms enable power plants to be available for generating electricity when 
needed. In exchange, the mechanisms provide payments to these power plants. Capacity mecha-
nisms can be implemented by Member States only if there are adequacy concerns demonstrated 
by a European or national resource adequacy assessment, and the Member State commits to im-
plement market reforms to eliminate distortions. In case capacity mechanisms are in place, they can 
represent an additional revenue stream for storage. 

The recast Electricity Regulation article 22 states that any capacity mechanism shall be open to the 
participation of all resources that are capable of providing the required technical performance, in-
cluding energy storage and demand side management. Furthermore, paragraph 343 of the new 
Guidelines on State aid for climate, environmental protection and energy 2022 requires that “the 
aid measure [for the security of electricity supply, including capacity mechanisms] should be open 

169  This delivery period for RR should decrease to 30 and 15 minutes as the number of daily gates in the RR platform increase. See https://extra-

net.acer.europa.eu/en/Electricity/MARKET-CODES/ELECTRICITY-BALANCING/02%20RR%20IF/Action%201%20-%20RR%20IF%20pro-
posal%20approved.pdf 

170  See for example ACER Decision No 2/2020 and ACER Decision No 3/2020 

171  ACER (2022) Market Monitoring Report 2020 – Electricity Wholesale Market Volume 

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EnTEC – Study on Energy Storage 

to all beneficiaries or projects technically capable of contributing efficiently to the achievement of 
the security of supply objective. This includes generation, storage and demand response, as well 
as the aggregation of small units of these forms of capacity into larger blocks. See section 4.3 for 
further information. 

Nonetheless,  current  pre-qualification  requirements  at  national  level  for  capacity  providers  and 
other design features can still limit the entry and participation of new entrants and small actors, 
including storage operators. Almost all capacity mechanisms assessed by ACER172 were in 2020 
open to demand-side response, storage, and renewable power generation facilities. Of the mecha-
nisms which procured capacity in 2020, Greece & Finland did not allow the participation of energy 
storage. 

But  besides  formally  allowing  the  participation  of  storage,  the  technical  rules  of  the  capacity 
mechanisms also matters. The minimum eligible capacity, impossibility for aggregation and the 
minimum bid size can represent entry barriers. For example, in Finland, the minimum bid size is 10 
MW whereas in Sweden and Germany the minimum bid size is 5 MW. In Germany, aggregation is 
not allowed, and thus storage units lower than 5 MW cannot participate.  

(Multi-)annual delivery periods173 in Belgium, Bulgaria, Germany, Greece, Ireland, Poland, Portu-
gal and Sweden are a barrier to the participation of energy storage since it is difficult for energy 
storage to demonstrate availability for the whole period of a year or more, given storage will be 
depleted at some point and time will be required for recharging (even long-duration storage). For 
this reason,  capacity mechanisms with  an  annual delivery period  usual de-rate  storage capacity. 
Depending on the de-rating methodology, this may constitute a significant barrier to entry of stor-
age. A delivery period shorter than a year thus reduces barriers to entry in capacity mechanisms 
and is beneficial for energy storage providers that may struggle to provide capacity over longer 
periods. Here the requirements of the French capacity mechanism of a delivery period of 10-25 
days per year compares favorably to other MS that ask for annual delivery periods. 

Alternatively, adequate de-rating methodologies should account for the fact storage is not avail-
able at all times while accurately representing the availability of some technologies. Thus, the new 
Italian capacity auctions have a methodology for de-rating storage – with de-rating factors of as 
low as 10-30% expected for storage with an energy/power ratio equal to or above 6,174 meaning 
most of the storage capacity can be considered in the auction. The new Belgian capacity remuner-
ation mechanism also employs such derating factors, which vary from 69% derating for storages 
with energy/power ratio of 1h to 21% for those of 4h.175 

Given the objective to ensure long-term adequacy by incentivising sufficient investments in capac-
ity, multi-year contracts may be justified for capacity mechanisms - contrary to balancing services, 
which address short-term system needs and where thus short-term contracts are preferred in order 
to reduce barriers to entry for new flexibility sources. This feature of capacity mechanism may be 
attractive to provide revenue certainty for storage investments. France in this regard has multi-year 
capacity contracts for seven years. ACER, however, is of the opinion that “multi-year capacity con-
tracts  in  Ireland,  Italy,  Poland  and  Spain  create a  bias  in  favour  of  investing  in  fossil  fuel power 

172  ACER (2022) Market Monitoring Report 2020 – Electricity Wholesale Market Volume 

173  Following ACER’s terminology. This indicates the contractual period during which the provider should be available to provide capacity in case 

of adequacy issues. 

174  Terna (2021) Mercato della Capacità - Disposizioni Tecniche di Funzionamento n.2 (Table 3). https://down-

load.terna.it/terna/CM_DTF2_8d9ae88f34aeadb.pdf 

175  Elia (2022) Elia Product Sheet - Capacity Remuneration Mechanism 

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EnTEC – Study on Energy Storage 

plants, representing a barrier to the participation of demand response, energy storage and variable 
RES generation”.176 

Participation of non-hydropower storage technologies in capacity markets is increasing. Hy-
dropower  (pumped  and  reservoir-based)  accounted  for  15-18%  of  the  capacity  remunerated  in 
selected MSs in 2020-2021.177 Other energy storage technologies account for less than 1% of the 
remunerated capacity. Where long-term contracts in capacity markets exist and data was provided 
to ACER (for capacity mechanisms in Ireland, Italy Poland and Spain), the contracted storage capac-
ity  share  increases  from  7%  of  the  total  in  2026  to  12%  in  2032.  An  increasing  participation  of 
storage technologies other than hydropower can be observed compared to 2020-2021, accounting 
for up to 4.8% of the contracted capacity (in 2032)178. 

4.2.2.5  Maturity of regulatory frameworks and initiatives to value dis-

tributed flexibility sources 

With the increasing penetration of distributed energy resources, DSOs will need to further procure 
services to ensure the safe operation of the networks. These services include voltage control (dy-
namic and steady state), islanded operation as well as for congestion management. Moreover, DSOs 
may also contract flexibility sources, among which storage, to defer network investments 

Several new provisions of the new electricity market design aim to promote market-based procure-
ment of flexibility services at the distribution level. Article 32 of the Electricity Directive provides 
that Member States shall incentivize the procurement of flexibility services, at the distribution level. 
Article  32  also  provides  that  DSOs  shall  be  enabled  to  procure  such  services  from  providers  of 
distributed generation, demand response of energy storage. Article 13 of the Electricity Regulation 
establishes provisions regarding redispatching (also at the distribution level), with market-based 
redispatching being the preferred approach. These are the main relevant rules at the EU level re-
garding local (i.e. distribution) flexibility. Other provisions besides article 13 impacting distributed 
flexibility sources exist, such as article 15 (active customers) and article 17 (demand response ag-
gregation) of the Electricity Directive. However, the analysis focuses on the issues of procurement 
of flexibility by DSOs from distributed sources.  

On  article  15,  for  example  by  the  end  of  2021,  of  the  11  Member  States  surveyed  by  smartEN 
study179 France, Finland, Greece, Italy, Slovenia and Spain had introduced legislation or otherwise 
in practice ensured that customers are able to act as active customers. France, Finland, Ireland had 
transposed Article 32 on DSOs incentives for flexibility. Where the article has been transposed, the 
exact rules for its application remain to be further specified and discussions are on-going. For ex-
ample, in France the government is developing the rules in consultation with the regulator180, which 
has not been yet completed.  

Thus, the regulatory frameworks for DSOs procuring congestion management and ancillary services 
is still in development in several Member States. But DSOs are not the only actors which require 
local flexibility. Distributed flexibility sources, among which storage, can also provide services to 
TSOs or other market parties. The number of local flexibility platforms and market initiatives 

176  ACER (2022) Market Monitoring Report 2020 – Electricity Wholesale Market Volume. P.98 

177  BG, FR, FI, DE, EL, IE, PT, ES, SE 

178  ACER (2022) Market Monitoring Report 2020 – Electricity Wholesale Market Volume. Figure 45 

179  smartEn (2022) The Implementation of the Electricity Market Design to Drive Demand-side Flexibility 

180  Article L322-9 of the French Energy Code 

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EnTEC – Study on Energy Storage 

in  the  EU  is  small  but  increasing.  With  the  implementation  of  Article  32  and  other  regulatory 
measures as well as due to the increasing deployment of DERs, this is expected to change.181 There 
are various overviews of local flexibility markets and platforms, but none presents a comprehensive 
inventory of initiatives.182 Moreover, given the fast-changing environment, any overview will rapidly 
become outdated. We identified at least 15 local flexibility markets and platforms in the EU, within 
countries Germany, Denmark, Estonia, Spain, Finland, France, Italy, Lithonia, Latvia and the Nether-
lands. Germany and the Netherlands are leading with respectively 7 and 4 initiatives183. 

Article 32 foresees the harmonisation of flexibility products at least at the national level. However, 
article 32 still needs to be adequately implemented in several Member States. However, even for 
local flexibility needs a certain level of harmonisation at the EU level might be needed to remove 
entry barriers to market participants active in multiple markets, as otherwise participation in each 
individual service procurement territory will require becoming acquainted with bespoke methodol-
ogies. Network operators consider that a general EU harmonisation of the products for congestion 
management is not required but a common defined list of attributes could be used, from which all 
Member States can choose only those attributes required for the specific product definition184.  

The issue of potential harmonisation affects all flexibility resources, however for storage the har-
monisation of flexibility products is a particularly important point due to its technical characteristics. 
Product attributes such as the availability window and recovery time should have at least 
common  definitions.  Different  storage  technologies  will  have  varying  availability  windows  and 
recovery times – common definitions on these aspects will facilitate the participation by storage 
operators in multiple markets, as they will more easily understand these product attributes in each 
market  Availability window  can  be  understood as the  period of time  during which the flexibility 
resource is available to providing (in case of a reservation product) or provides (in case of an energy 
product) the service, for example a certain number of hours or days. This attribute is relevant for 
storage as it cannot be available on a continuous basis, due to the need to self-discharge losses 
and the need to recharge. The recovery period is the period between the end of the last activation 
and the start of the next. It is important to allow storage technologies to recharge, and should be 
taken into account when selecting offers from flexibility providers in order that the market clearing 
result allows sufficient recharge time for accepted storage offers. 

The upcoming demand response network code based on Art. 59(1)(e) of the Electricity Regulation 
will aim at addressing remaining regulatory barriers for the development of demand side flexibility. 
This will include demand response, but also storage (in particular when combined with load) and 
distributed generation. It shall aim at ensuring that no undue regulatory barriers hamper the par-
ticipation of demand side flexibility in any of the existing electricity markets and at enabling the 
participation  of demand  side  flexibility  in  market-based  procurement  of  services  needed  by  the 
system operators.185, 186.  

181  Schittekatte et al. (2022) Distributed energy resources and electricity balancing: visions for future organisation 

182  Including Frontier Economics (2021) Review of Flexibility Platforms; Accenture (2021) An overview of local European flexibility markets 

183  Including the following (project promotors indicated in parenthesis) - BG: Xflex (pilot); DE: Small-assets to CM & aFRR (TSO & third party), EN-

ERA (TSO/DSO, power exchange, third party), New 4.0 Designetz WindNode (TSO/DSO), Pebbles (DSO & third party); Main driver of flexibility is 
HV congestion (Source: Accenture);ARGE FNB - 50 Hertz; Bne Flexmarkt; DA/RE; DK: INTERRFACE (T/DSO); EE: INTERRFACE (T/DSO); EL: Xflex 
(pilot); ES: SmartNet Spain (DSO); FI: INTERRFACE (T/DSO); FR: InterFlex (DSO, third party);  NEBEF; ReFlex (Enedis); Main driver for flexibility are 
DSO needs (planification & operation) (Accenture); IT: EQUIGY; Platone; LT: INTERRFACE (T/DSO); LV: INTERRFACE (T/DSO); NL: Enervalis (DSO 
& third party), ETPA (power exchange, TSO/DSO);  Main driver of flexibility is HV congestion (Source: Accenture); GOPACS (T/DSO); Dynamo 
flexmarkt Nijmegen-Noord; SE: INTERRFACE (T/DSO); SI: Xflex (pilot). 

184  CEDEC et al. (2019) An Integrated Approach to Active System Management With the Focus on TSO– DSO Coordination in Congestion Manage-

ment and Balancing 

185  https://www.acer.europa.eu/events-and-engagement/news/acer-initiates-drafting-new-framework-guidelines-demand-response 

186  ACER (2022) Framework Guideline on Demand Response (Draft for public consultation) 

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EnTEC – Study on Energy Storage 

4.2.2.6  Restrictions on value stacking 

Enabling storage to combine revenues from different services  should be allowed in order to im-
prove the  business case of  flexible  resources, while ensuring  the delivery of services contracted. 
Value stacking refers to the pooling of revenue streams from multiple services to build up the busi-
ness case for investing in flexibility.  

Exclusivity clauses are a straightforward way to ensure that contracted resources are effectively 
available for delivery of the service. However, they impede revenue stacking by storage. Thus, 
such clauses in flexibility service contracts should be allowed only if justified for technical reasons. 
Exclusivity clauses are not explicitly allowed nor forbidden in the EU regulatory framework. Penal-
ties for non-delivery are a more appropriate way to ensure resource availability while allowing 
revenue stacking. However, defining the right penalty level is complex, as too high penalties can 
disincentivize providers to offer flexibility. Therefore, in cases where appropriate penalties cannot 
be established, exclusivity clauses should restrain from establishing a blanket prohibition and in-
stead define the specific conditions under which storage capacity should be reserved for the con-
tracted services 

Transparent and objective rules by network operators on which services can be combined by stor-
age can also provide the certainty necessary for value stacking. The markets in which storage op-
erators are able to participate include frequency response and reserve products, as well as conges-
tion management and other flexibility services such as on local markets. There are three different 
approaches which storage operators can use to stack revenues187, namely: 

1)  Value stacking in time: participating in different markets in different timeframes (e.g. morning 

and evening). 

2)  Value stacking in pools: activating assets for different services 
3)  Double serving: Providing multiple services at the same time by stacking activation from one 

asset 

The possibilities for value stacking and the stacking of services differ per MS. On exclusivity clauses 
for flexibility service contracts, there is an indication they represented an issue188 but the situation 
may be improving. 

Out of 7 MSs reviewed in the report of Flexibility Deployment in Europe189, 6 MSs allowed revenue 
stacking  between  balancing  services and/or of  capacity mechanism  contracts,  but  only  4 out  of 
these 7 MS the are possibilities for dynamic pooling (i.e. “the ability to decide in real-time what 
assets to activate to deliver each service”). 

For example, in Belgium value stacking of balancing services in time is possible and can be offered 
at pool level, however each asset should be prequalified and the bid must include a list of those 
assets. In Denmark, it is possible to stack different balancing services, however, dynamic pooling 
(i.e. the ability to decide in real time what assets to activate) is not yet allowed. The analysis shows 
that in most countries which allow some level of value stacking, only a certain combination of ser-
vice stacking is allowed, either because of rules not having been updated yet, and/or the need (from 
the system operator’s view) to secure the asset for the contracted service and ensure delivery. The 

187  USEF. (2021). Flexibility Deployment in Europe. White Paper. https://www.usef.energy/app/uploads/2021/03/08032021-White-paper-Flexibility-

Deployment-in-Europe-version-1.0-3.pdf 

188  Bridge Horizon 2020 (2019) Recommendations on Selected Regulatory Issues from experience and knowledge. https://www.h2020-

bridge.eu/wp-content/uploads/2018/10/BRIDGE-Regulations-WG-Findings-and-Reco-July-2019.pdf 

189  USEF. (2021). Flexibility Deployment in Europe. White Paper. https://www.usef.energy/app/uploads/2021/03/08032021-White-paper-Flexibility-

Deployment-in-Europe-version-1.0-3.pdf 

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German TSOs have proposed rules clarifying how to allocate the provision of balancing products 
from different assets, even if multiple aggregators are active on a single flexible asset.190 Further 
best practices in non-EU countries are indicated in section 4.2.3. 

Optimally offering flexibility services across different markets while maximising the storage asset 
lifetime and minimising the risk of non-delivery is a complex task. Once excessively restrictive terms 
& conditions in contracts for the provision of ancillary and other services are removed, operators 
of storage and other flexibility assets still face the challenge of employing complex algorithms and 
systems in order to optimise stacking. Further innovation is required in this respect, although this 
constitutes a technical aspect rather than a regulatory barrier. Nonetheless, already several compa-
nies are offering services to allow energy consumers and flexible asset operators to optimise their 
operation and maximise revenues.191 

4.2.2.7  Emergent state of new ancillary services 

Ancillary services refer to services used by network operators to ensure the safe and secure opera-
tion of the electricity system and can be divided into frequency ancillary services (the balancing of 
supply and demand) and non-frequency ancillary services (such as voltage control and black-start). 
Congestion management is in European legislation not considered an ancillary service192. Flexibility 
services can be considered a broader term which includes not only ancillary services, but also con-
gestion management services. 

New ancillary services are those services which complement “traditional” ancillary services that are 
widely procured by system operators. The latter include balancing services (FCR, FRR, RR) defined 
in the Balancing Guideline, but also steady state voltage support and black start. It is important to 
note that these new ancillary services are to different extents already provided by market partici-
pants, but are not remunerated through specific mechanisms. There is, however, no common defi-
nition of new ancillary services. An overview of most traditional and new ancillary services is pre-
sented below. 

190  https://www.regelleistung.net/ext/download/Konsultation_Regelleistungsistwerte 

191  http://digital.erosioncontrol.com/publication/?i=467668&article_id=2982611&view=articleBrowser&ver=html5 

192  Article 2(48) of the Electricity Directive (EU) 2019/944: ‘ancillary service’ means a service necessary for the operation of a transmission or distri-

bution system, including balancing and non-frequency ancillary services, but not including congestion management; 

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Figure 45  

Overview of generic ancillary services according to EU-SysFlex193 

For this analysis, new ancillary services include at least: 

  Fast frequency response services 
  Synchronous inertial response 
  Ramping products 
  Dynamic reactive power 

New ancillary services serve to remedy the lower system inertia and larger gradients of the residual 
load, which result from an increasing amount of intermittent renewable resources in the grid and 
from the reduced participation of synchronous generators. These issues are compounded by the 
fact that regions with large renewable energy potentials are frequently located far from load cen-
tres, and thus electricity has to transit further. Larger transit volumes can lead to larger imbalances 
in individual islanded systems in case of system separation events.194 Therefore, currently, such ser-
vices are mostly implemented in islanded systems (such as the all-island system of Ireland, the UK 
and Australia).195 However, as the participation of renewable energy sources increases, there will be 
an increasing need for these services also in the Continental Synchronous Area.196 We discuss next 
what are these new ancillary services, the potential for storage technologies to contribute to these 
services, and the current use by network operators. 

Synchronous generators instantaneously dampen frequency changes through changes in its rotor 
kinetic energy. While synchronous generators may participate in balancing markets, they are gen-
erally not remunerated for the instantaneous damping effect on frequency changes. With the in-
creased penetration of non-synchronous generators, there may aneed for explicitly incentivising 
the provision of synchronous inertia to the system with dedicated synchronous inertial response 

193  EU-SysFlex (2018) D3.1 Product Definition for Innovative System Services 

194  ENTSO-E (2020) Inertia and Rate of Change of Frequency (RoCoF) 

195  EU-SysFlex (2018) D3.1 Product Definition for Innovative System Services 

196  EU-SysFlex (2019) D2.4 Technical Shortfalls for Pan-European Power System with High Levels of Renewable Generation 

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services. In this way, the system should have sufficient inertia so that frequency deviations follow-
ing  a  disturbance  are  manageable  and  can  then  be  contained  and  resolved  with  slower-acting 
(i.e. non-instantaneous) resources. The key parameter to control is the rate of change of frequency 
(RoCoF) – the change in frequency in a defined period of time, after a disturbance and before any 
control actions. As the ENTSO-E states, “to fix a maximum RoCoF limit for an electrical power system 
means to determine the ‘maximum stress’ that it can sustain and survive; this implies that under 
these conditions all the control loops, active power control and protection systems, including de-
fence systems are able to trigger and react in accordance with their system governance settings.”197 
There is little experience in the procurement of inertial response products. Currently, only EirGrid 
and SONI procured and defined inertial response products. Nordic TSOs (Statnett, FinGrid, Ener-
ginet, Svenska Kraftnat) and National Grid are also looking into solutions to address falling inertia 
levels, which could include the procurement of synchronous inertial response.198 

With the increasing amount of renewable energy sources and consequent reduced system inertia, 
assets  providing  frequency  containment  reserves  might  not  be  able  to  respond  fast  enough  to 
address frequency imbalances. Fast frequency response (FFR, also called synthetic or virtual iner-
tia) aims to contain frequency deviations by responding faster than FCR assets. Batteries (but also 
other storage technologies) are well-suited for providing this FFR service since they have a short 
response time. FFR differs from synchronous inertia as in FFR a measurement of the frequency is 
necessary before the control system activates a change in active power injection or withdrawal by 
the FFR provider. Therefore, synchronous inertia theoretically responds faster than FFR, and both 
are  not  fully  interchangeable.199  Nonetheless,  technological  improvements  in  grid-forming  con-
verter  controls should  improve the response time, making  FFR providers respond in timeframes 
equivalent to synchronous inertia providers.200 However, ENTSO-E does not know yet whether as-
sets  capable  in  the  future  of  providing  synthetic  inertia  will  be  sufficient  to  fully  meet  inertia 
needs.201 

In Italy ARERA determined through Decision 200/2020 the procurement of FFR services with the 
first auction taking place in October 2021 and delivery starting in 2023. Eligible assets in include 
non-interruptible  load  units,  stand-alone  production  units,  and  (behind-the-meter)  storage  sys-
tems.202 In Lithuania, Energy Cells (a publicly-owned subsidiary) contracted 200 MW of battery stor-
age to provide islanded operation in phase I of the project (until 2025) until the Baltic countries are 
synchronised with the Continental Europe Area and also balancing and synthetic inertia in phase II 
(post-2025)203. Currently, the Russian power system provides primary reserves.204 The Swedish TSO 
Svenska Kraftnat started in 2020 a scheme for procuring FFR.205 Also EirGrid (in Ireland), SONI & 
National Grid (UK) introduced schemes for procuring FFR.206 However, the latter was scheduled to 

197  ENTSO-E (2020) Inertia and Rate of Change of Frequency (RoCoF) 

198  EU-Sysflex (2018) D3.1 Product Definition for Innovative System Services 

199  TNO (2021) D3.3 Design of ancillary service markets and products - Challenges and recommendations for EU renewable power systems 

200  ENTSO-E (2020) Inertia and Rate of Change of Frequency (RoCoF) 

201  ENTSO-E (2020) Inertia and Rate of Change of Frequency (RoCoF) 

202  RSE (2021) New rules for assets and novel regulation services to increase the Italian power system flexibility https://www.eera-energystor-
age.eu/component/attachments/?task=download&id=607:Canevese_Gatti_New-rules-for-assets-and-novel-regulation-servicesache/Con-
tent.Outlook/FR4S1YIZ/Canevese_Gatti_New%20rules%20for%20assets%20and%20novel%20regulation%20services.pdf Terna (2020) Fast Re-
serve – Information pack https://download.terna.it/terna/Fast%20Reserve%20-%20Information%20pack_8d82fe02cbed7ad.pdf 

203  https://www.epsog.lt/en/news/cells https://blog.fluenceenergy.com/clean-energy-accelerator-storage-transmission-enhancement-lithuania 

204  https://tyndp.entsoe.eu/2016/insight-reports/baltic-synchronisation/ 

205  https://www.svk.se/aktorsportalen/systemdrift-elmarknad/information-om-stodtjanster/ffr/ 

206  EU-SysFlex (2018) D3.1 Product Definition for Innovative System Services 

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be phased out by the end of 2022 with the complete restructuring of balancing services in the UK, 
as explained in section 4.2.3. 

Ramping up/down refers to the ability of an asset to change its power supply or demand, respec-
tively, from one time unit to the next in order to maintain the supply-demand balance.207 Ramping 
products are used to deal with short-time frame system imbalances caused by, for example, large 
changes in wind or solar PV generation which lead to a significant up or downward ramp need. 
However, the duration of these imbalances is longer (up to several hours) longer than those ad-
dressed by Frequency Containment or Frequency Restoration Reserves (of the order of several sec-
onds  or  minutes,  respectively)  Currently,  Ireland  and  Northern  Ireland  use  ramping  products  to 
mitigate technical scarcities to deal with rapid changes in the system balance. In Ireland and North-
ern Ireland one, three and eight hours are used as product time-horizons for ramping-up services. 
Other systems operators, such  as CAISO  (California) and  MISO utilize  ramping  products as well, 
however used due to market design failures rather than technical scarcities on the operating reserve 
timeframe.208 

Dynamic reactive power services  aim  to support voltage control  during  a system  disturbance. 
This is different from steady state reactive power which applies voltage control during normal sys-
tem operation. Currently, only the TSOs of the island of Ireland have designed dynamic reactive 
power products, however, the service has not yet been procured, as it is only deemed necessary at 
non-synchronous generation levels above 70%.209 

The EU-SysFlex project indicated there would be scarcity or at least concern regarding the suffi-
ciency of inertia and frequency containment in the systems of Continental Europe and particularly 
the island of Ireland  in  the high-renewables scenarios analysed. This  indicates  that  the need for 
such services, which at the moment have been deemed necessary only in the Irish and British sys-
tems, should increase also for continental Europe. 

The  procurement  of  these new  ancillary services  by network operators  represents  a  market 
opportunity for various storage technologies, which may often be competitively well-placed, espe-
cially with the improvement of grid-forming technology. TSOs are already required to procure bal-
ancing services in a non-discriminatory manner (Article 40(4) of Electricity Directive). This should 
include fast frequency response services, given the wording of the definition for ‘balancing’.210 TSOs 
and DSOs should also procure non-frequency ancillary services through market-based procedures 
in a non-discriminatory manner, although NRAs are allowed to provide a derogation for the use of 
non-market-based  procedures  (articles  31(7)  and  40(5)  of  Electricity  Directive,  respectively).  It  is 
possible that some or several of these services will use non-market-based procedures, due to the 
localised nature of some of the services (which could increase the risk of strategic behaviour by 
market participants, i.e. gaming) and the transaction costs which may not warrant complex com-
petitive procedures. 

The new  ancillary services  described  above could  be  to some  extent procured in  a shared 
manner, except for dynamic reactive power which has a strong locational component. It is possible 
that  once  these new  services  are needed  at  a  larger  scale  throughout the  EU  due to  increasing 
renewable energy penetration and the consequent reduction in synchronous generation, they could 

207  EU-SysFlex (2018) D3.1 Product Definition for Innovative System Services. https://eu-sysflex.com/wp-content/uploads/2019/08/D3.1_Final_Sub-

mitted.pdf 

208  EU-SysFlex (2018) D3.1 Product Definition for Innovative System Services 

209  EU-SysFlex (2018) D3.1 Product Definition for Innovative System Services 

210  Article 2(10) of the Electricity Regulation 2019/943: “‘balancing’ means all actions and processes, in all timelines, through which transmission 

system operators ensure, in an ongoing manner, maintenance of the system frequency within a predefined stability range and compliance with 
the amount of reserves needed with respect to the required quality” 

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be most efficiently procured at the regional level, as less units should suffice to provide e.g. the 
synchronous inertia needed (at least  in the  transition  phase until variable renewable energy be-
comes the dominant source in a given synchronous system). Attention would be required to ensure 
that ancillary service provision does not affect cross-border flows as far as possible. This because if 
for example a single unit provided frequency regulation for several bidding zones, changes in the 
unit active power would lead to changes in cross-border flows. Besides utilising interconnection 
capacity which could be offered to the market otherwise, that could create issues in case of system 
separation. Nonetheless, as long as available interconnection capacities and safe system operation 
are  considered,  sizing  and  procurement  of  new  ancillary  services  at  the  regional  level  could  be 
beneficial, once the need for them increases. However, given the general absence of procurement 
mechanisms for such services in the EU (with the exception of Ireland) there is a need for further 
experience in the design of such processes. This could then provide the learning needed for initia-
tives e.g. harmonising the products at a regional level and even sharing these services. 

Moreover, the resources eligible to provide some of the new ancillary services may also participate 
in established ancillary service procurement mechanisms such as for FCR, FRR and RR. There is a 
particularly strong connection between the FRR and FCR markets, as the same balancing resources 
could provide both – and there could be an overlap between FRR and FCR depending on the defi-
nition of response time. This also raises issues related to rules for value stacking and which combi-
nation of services is allowed or not. Thus, further understanding of the interaction of these new 
ancillary services and existing balancing services regulated at the EU level is needed. 

Finally, it must be noted that the provision of ‘conventional’ non-frequency ancillary services 
such as voltage control and black start are often not remunerated by network operators, or 
not accessible to storage. For example, in 2020, out of 28 EU27 TSOs surveyed by ENTSO-E, only 
6  allowed  the participation of  storage  (in  FI, DE and  SK). Out of these, black start provision was 
mandatory and not remunerated in Germany.211 Feedback on the national fiches has indicated that 
this situation had not significantly changed by the 1st half of 2022. 

4.2.2.8  Provision of locational signals and information to market parties 

While high temporal granularity in electricity markets is beneficial to storage, improving locational 
signals and  locational  information  to  markets  parties  could  also  improve  the  participation  of  all 
flexibility  sources  in  the  market,  including  storage.  Ensuring  electricity markets  reflect  locational 
aspects as much as possible should improve the overall system efficiency, by better reflecting net-
work  constraints  and  thus  providing  investment  and  operational  signals  to  storage.  However,  a 
balance must be found between increasing locational signals and information, and ensuring market 
processes and algorithms are practical. 

Several locational aspects affect storage – here we discuss the following: 

  Bidding  zone  review  process:  The  configuration  of  bidding  zones  in  the  EU  should  reflect 
structural congestions. This would allow zonal prices to better reflect system conditions in mo-
ments of congestion (besides reducing the need for TSOs adopting remedial actions). This could 
increase  price  volatility  and  thus  incentivise  the  provision  of  flexibility  by  storage  and  other 
resources (which in turn should alleviate interconnector congestion). However, the 1st bidding 
zone review was considered a failure by ACER212. The bidding zone review process has since 
been altered with the Clean Energy Package and previous challenges around governance and 

211  ENTSO-E (2021) Ancillary Services Survey 2020 

212  ACER (2019) Monitoring report on the implementation of the CACM Regulation and the FCA Regulation 

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decision-making have been tackled. ACER has adopted a decision on the harmonised method-
ology and assumptions for the TSO assessment, which is expected to improve the process. The 
reconfiguration of the bidding zones if needed will be decided by the relevant Member States 
based  on  the  assessment  by  TSOs  r.  It  remains to be  seen  whether  the  next  review  process 
adequately identifies structural congestion and whether the new governance process leads to 
bidding zones better reflecting that congestion thereby increasing the availability of cross-zonal 
capacities. 

  Provision of system and network information by network operators: This is essential to 
allow market participants to adequately anticipate system conditions. Such information is rele-
vant in order for storage operators and other market participants to make for example siting 
and sizing decisions, as well as to decide which storage services to provide across the different 
markets, such as whether to offer the available storage capacity for balancing or redispatching. 
Currently, the level of information provided by network operators in ENTSO-E’s Transparency 
Platform varies per data type and TSO/Member State. ACER indicates the information availabil-
ity is more of an issue in the Baltics, Ireland and Sweden.213 Moreover, further information than 
what is available in ENTSO-E’s transparency platform could be of use to storage operators. The 
Platform currently provides information such as cross-border capacities (forecasted, allocated 
and utilised), as well as scheduled commercial exchanges. Several potential storage services are 
of a locational nature, including all those procured by DSOs as well as e.g. redispatch services 
and voltage control needed by TSOs. For example, in the Netherlands the network operators 
provide information on the network capacity for new injection connections (Figure 46). In areas 
shown in red, connection requests cannot be met, while areas in orange already show structural 
congestion. Information on internal network congestion would also be useful for storage and 
other (distributed) flexibility asset operators.214 For example, the French DSO Enedis has a portal 
providing various information, including regularly updated information on D+2 irradiation data 
(for forecasting PV generation), new connection projects for various resources, and others.215 
Elia in Belgium also provides this information.216 

  Flexible connection contracts: Flexible connection contracts are being used as a transitional 
solution in case of grid capacity constraints; they allow grid operators to reduce or interrupt 
injection or withdrawal during a limited number of hours per year, with or without a financial 
compensation for the concerned grid user. Flexible contracts could facilitate the connection of 
storage in grids reaching or beyond their nominal capacity, while distributed storage could be 
well suited to optimise its operation to avoid periods of access curtailment  – or even relieve 
grid congestion. Such contracts exist in Belgium as well as in France. In France, the network user 
may choose for the reference connection contract, or for the smart connection contract, where 
these limitations in injection and/or withdrawal may be established by the DSO (leading to a 
cheaper and/or faster connection).217  Moreover, besides new approaches for individual con-
nection agreements, changes can be made to the maximum capacity that is allowed to be con-
nected to a network. A draft network code was published in by the Dutch NRA to increase the 
connection limit to 200% of the technical grid capacity limit (instead of the current 120%). This 
means new users could be connected until up to twice the capacity of the network was reached 

213  ACER (2022) Market Monitoring Report 2020 – Electricity Wholesale Market Volume 

214  CEDEC et al. (2016) TSO – DSO data management report 

215  https://data.enedis.fr 

216  https://opendata.elia.be/pages/home/ 

217  https://www.enedis.fr/media/2361/download 

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(and access would be interrupted in moments of congestion).218 However, network operators 
have indicated concerns regarding the stability of the network.219   

Locational transmission tariffs are also relevant, as they can provide siting signals to network users, 
including for example renewable power plants. They can also lead to better siting of storage, but 
specific effects would be limited compared to other locational issues discussed here. Also, only few 
Member States currently employ locational signals in transmission tariffs, and there is no obligation 
for the others to adopt them. Therefore, it is not discussed further here.220 

Figure 46 

Capacity map of the Dutch electricity grid as of 14/04/2022 (injection)221 

No capacity scarcity (yet) 

Risk of capacity scarcity, 
adapted connection regime 

Advanced notice of struc-
tural congestion to NRA 

Structural congestion 

218  https://www.acm.nl/nl/publicaties/ontwerp-codebesluit-congestiemanagement 

219  https://www.acm.nl/sites/default/files/documents/zienswijze-netbeheer-nederland.pdf 

220  For further information, please see ACER (2019) - ACER Practice Report on Transmission Tariff Methodologies in Europe; and ACER (2021) - 

Report on Distribution Tariff Methodologies in Europe 

221  https://capaciteitskaart.netbeheernederland.nl/ 

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4.2.2.9  New Guidelines on State Aid for Climate, Environmental Protec-

tion and Energy 

In case Member States opt for developing specific support schemes for long-duration storage, this 
could constitute of course a main revenue stream. However, asides for innovation support to long-
duration  energy  storage  technologies  with  low  to  medium  TRLs,  Member  States  would  have  to 
identify a specific (new) system need that is not yet met by existing mechanisms, and likely open 
the mechanism to all flexibility solutions which meet the technical requirements.  

The new Guidelines on State Aid for Climate, Environmental Protection and Energy (CEEAG) have 
been adopted in January 2022222. They allow for State Aid to storage when complying with require-
ments under a number of aid categories, namely: 

 

 
 
 
 

for the reduction and removal of greenhouse gas emissions including through support for re-
newable energy and energy efficiency 
for the improvement of the energy and environmental performance of building 
for clean mobility 
for the security of electricity supply 
for energy infrastructure223 

The definition of ‘energy from renewable sources’ (section 2.4, paragraph 19(35)) excludes electric-
ity produced as a result of storage system. This could potentially hinder the creation of support 
schemes  for  long-duration  energy  storage.  However,  this  and  potentially  other  issues  with  the 
CEEAG were not one of the main concerns by storage operators, based on our interviews and re-
sponses to the survey.  

4.2.3 

International landscape 

A number of key markets worldwide are driving the growth of energy storage: Korea, China, the US 
and Germany accounted for more than 60% of the market in 2019224, and led the world in new 
additions in 2020. In 2021, 10 GW / 22 GWh of storage were deployed worldwide, reaching 27 GW 
/ 56 GWh by end 2021. The US are currently the world’s biggest market with an installed storage 
capacity of 4 GW / 11 GWh in 2021, however, China is likely to overtake the lead as it already saw 
a significant jump from 0.6 to 1.6 GW in yearly installations in the same period. In place number 
three is Germany as the  first  EU country.225  Finally  , while utility-scale batteries lead the  market, 
Japan is a market leader for behind-the-meter storage. 

Looking forward, the IEA expects the main global markets in 2026 to comprise Europe (deployment 
of 38.6 GWh), China (34.1 GWh), India (31 GWh) and the US (23 GWh), where utility-scale batteries 
should remain the main market and constitute the majority of the deployment in the 2020-2026 
period. It must be noted however that such forecasts are highly uncertain. Lithium-based batteries 
are the main technology deployed, with nickel-manganese-cobalt chemistries (the same currently 

222  Guidelines on State aid for climate, environmental protection and energy 2022 (2022/C 80/01) 

223  Aid to storage under the ‘energy infrastructure’ category can be given only until the end of 2023 and only for front-of-the-meter storage 

224  https://www.iea.org/reports/tracking-energy-storage-2020 

225 Energy Storage News (2022) BloombergNEF predicts 30% annual growth for global energy storage market to 2030. https://www.energy-stor-

age.news/bloombergnef-predicts-30-annual-growth-for-global-energy-storage-market-to-2030/ 

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used  in  EVs)  being  the  most  important  in  2020  deployments,  but  expected  to  be  surpassed  by 
lithium-iron phosphate chemistries in 2021.226 

A number of policies which improve the business case of storage in global markets are expected to 
be important,227 namely economic and financial incentives, and increased revenues in the different 
electricity markets due to the increasing need for flexibility in high-RES systems, especially those 
where  variable  renewable  energy  meets  the  entirety  of  demand  in  some  hours  of  the  day.  It  is 
however interesting to look at country-specific policies as well as underlying motivations for their 
adoption for the past and future storage growth.228 These include: 

 

In Europe, in specific markets such as Ireland and the Nordic countries, market-based remu-
neration for ancillary services exist which provide additional revenues for storage and can be 
an  important  driver  for  development, as  discussion  in  section  4.2.2  –  driven by  the  need  to 
contract enough ancillary services in these synchronous systems. In the UK, besides the signifi-
cant revenues that can be derived from ancillary services (especially the new Dynamic Contain-
ment service described below in this section)229, capacity auctions have and continue to play a 
significant role in stimulating deployment.230 Behind-the-meter storage is developing strongly 
in Germany, driven by a context of strong development of rooftop PV and EVs (increasing 
incentives  for  energy  management  by  consumers),  prosumers  becoming  more  ac-
quainted with home batteries, and comparatively high energy prices, particularly when all 
price components such as renewable energy surcharges are considered.231 Finally, some hybrid 
auctions served to develop storage co-located with renewables, in Germany and Portugal (sec-
tion 4.3), with another auction foreseen for Spain (section 4.7), where there is limited additional 
grid capacity to connect all planned RES projects. Although these auctions account for only a 
limited shared of deployment so far, dedicated auctions or at least the consideration of hybrid-
isation in future auctions should support storage; 

  The  strong performance  of  the  US232  storage  market  is  driven  by  large  projects  in  specific 
states. System operators, regulators and the federal and state governments have realised they 
had  a  need  for  increased  resilience after  recent  system  disruptions  and  observed  high peak 
prices in several markets. Such problems are compounded by the limited size of electricity mar-
kets in the US, compared to European ones, as discussed below. In 2020, the US Better Energy 
Storage Act authorized over 1 billion USD for a period of five years to support research and 
marketing of storage technologies32. The state officials used targets as tool to start-up their in-
state storage industries. The leading states in energy storage targets include233 California (11.5 
GW by 2026) Virginia (3100 MW by 2035), New Jersey (2000 MW by 2030), New York (1500 MW 
by 2025), Nevada (1000 MW by 2030), Connecticut (1000 MW by 2030) and Massachusetts (200 

226  BNEF (2021) Global Energy Storage Market Set to Hit One Terawatt-Hour by 2030. https://about.bnef.com/blog/global-energy-storage-market-

set-to-hit-one-terawatt-hour-by-2030/ 

227  https://www.iea.org/articles/how-rapidly-will-the-global-electricity-storage-market-grow-by-2026 

228  Unless stated, the following is based on IEA (2021) Energy Storage https://www.iea.org/reports/energy-storage And IEA (2021) Renewables 
2021 - How rapidly will the global electricity storage market grow by 2026?  https://www.iea.org/articles/how-rapidly-will-the-global-electri-
city-storage-market-grow-by-2026 

229  https://www.energy-storage.news/uk-energy-storage-bumper-returns-in-2021-unlikely-to-continue-says-modo-energy/ 

230  https://www.energy-storage.news/the-numbers-behind-the-record-breaking-rise-of-the-uk-battery-storage-market/ 

231  https://www.energy-storage.news/german-energy-storage-market-2021-residential-dominates-but-utility-scale-bess-grows-nearly-6x/ 

232  https://www.canarymedia.com/articles/energy-storage/grid-energy-storage-surged-in-2021-as-we-predicted 

233  Burwen, J., 2020. Energy Storage Goals, Targets, Mandates: What’s the Difference? [online] American clean power. Available at: <https://ener-

gystorage.org/energy-storage-goals-targets-and-mandates-whats-the-difference> [Accessed 16 May 2022]. 

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MWh by 2025)234. This corresponds to about 3 to 14% of today’s installed generation capacity 
of each of the states (New York 3%, Nevada 8%, Connecticut 10%, Virginia 10%, New Jersey 
12%, California 14%). These targets have been accompanied by e.g. tendering mechanisms in 
California to achieve them.235 In the US overall, the driver of strong solar PV development and 
the associated policy of tax incentives, particularly the solar investment tax credit (which 
can benefit also hybrid deployments) also play an important role in creating a market for ca-
pacity firming by storage.; 
In  China,  a  major  driver  is  the  need  to  integrated  renewables  and  reduce  the  observed 
curtailment in the past years. This has led to the national policy target of 30 GW of energy 
storage  by  2025  as  well  as  other  policies  such  as  priority  connection  to  the  grid  and  the 
further changes to the power sector. In 2021, China broadcasted the plans to increase commu-
tative  installed  non-pumped  hydro  energy  storage  over  30  GW  by  202532  and  100  GW  by 
2030236. This corresponds to about 1% / 4% of today’s installed generation capacity in the coun-
try.  In  the  2021  National  Energy  Conference,  the  Chinese  officials  announced  to  faster  the 
pumped hydro energy storage development plan which may lead to an installed capacity of 65 
GW by 202538. corresponding to about 2.7% of today’s installed electricity generation capacity. 
Altogether, this has led to hybrid projects becoming increasingly frequent. Moreover, the com-
missioning of delayed projects has played a role in the jump in yearly installations observed 
in 2020. According to the China Energy Storage Alliance (CNESA), China invested approximately 
7.4 billion RMB (1.16 billion USD) on energy storage in 2020 and the source of investment were 
mostly from venture capital, generation companies, grid companies, solar companies, and local 
governments237.  In  contrast,  the  participation  of  standalone  large-scale  storage  in  electricity 
markets does not appear to be a strong driver, due to the low (regulated) prices238. 
In Korea, federal subsidy schemes have played an important role in the development of stor-
age. 

 

 

In summary, it appears that for the fastest growing markets, various drivers are in play. High growth 
in the US and China is associated with the urgent need for additional system flexibility, and takes 
the form among others of hybrid projects. In the case of the US merchant front-of-the-meter pro-
jects are also being developed due to high peak prices (and thus higher spreads) in electricity mar-
kets. These drivers differ to the EU, where hybrid projects also start being developed but where a 
relevant share of renewable energy projects is publicly supported, with hybridisation starting to be 
explicitly supported or at least considered in auction design. 

Another critical factor is the comparatively lower need for flexibility services in the Continental Eu-
rope Synchronous Area, compared to other systems in Europe, US and China. Figure 47 presents 
the technical scarcities for the continental European, island of Ireland and Nordic systems expected 
due to increasing renewable energy penetration and decreasing volumes of synchronous genera-
tion in the system. It can be seen that the island of Ireland system is most likely to face scarcities in 
the 2030 time horizon, due to higher penetration of variable (non-synchronous) renewables,239 but 
also likely due to the limited system size, which reduces the possibility to share flexible assets and 

234  Plautz, J., 2022. As states ramp up storage targets, policy maneuvering becomes key. [online] Utility Dive. Available at: <https://www.utili-

tydive.com/news/as-states-ramp-up-storage-targets-policy-maneuvering-becomes-key/618218/>[Accessed 16 May 2022]. 

235  https://www.canarymedia.com/articles/energy-storage/grid-energy-storage-surged-in-2021-as-we-predicted 

236  Standaert, M., 2021. China ramping up ambitious goals for industrial battery storage. [online] Energy Monitor. Available at: <https://www.ener-

gymonitor.ai/tech/energy-storage/china-ramping-up-ambitious-goals-for-industrial-battery-storage [Accessed 16 May 2022]. 

237  China Energy Storage Alliance, (2021). Energy Storage Industry Research white Paper 2021. 

238  Wood Mackenzie (2021) Could China lead the global energy storage market by 2030? 

239  EU-SysFlex (2018) European Flexibility Roadmap - D10.5 

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EnTEC – Study on Energy Storage 

reduce flexibility needs (by integrating areas with a lower generation and load profile correlation). 
Scarcities concerning especially steady state voltage and oscillation damping are nonetheless ex-
pected for CESA. The US markets are also characterised by a lower level of integration than the EU 
continental system. 

Figure 48 illustrates this by presenting the US electricity markets, characterised by multiple adjacent 
and non-integrated markets, with in fact some of the markets shown being further fragmented with 
limited or no exchange of flexibility within them. As a comparison, the PJM240 market has a peak 
load somewhat above 130 GW241 versus over 500 GW in the ENTSO-E system.242 China’s system is 
larger, reaching over 1000 GW, but faced in the mid-2010s significant flexibility constraints leading 
to the curtailment of renewables and a focus on energy storage as a flexibility source.243 

Figure 47  

Technical scarcities‘ forecast for 2030 in 3 European synchronous systems of 
the EU-SysFlex project244 

240  One of the largest US electricity markets and covering 13 US states and the District of Columbia 

241  https://insidelines.pjm.com/pjm-2022-long-term-load-forecast-predicts-slight-growth/ 

242  https://2020.entsos-tyndp-scenarios.eu/scenario-results/ 

243  Liu et al. (2021) Bottlenecks and Countermeasures of High-Penetration Renewable Energy Development in China. https://www.sciencedi-

rect.com/science/article/pii/S209580992030357X 

244  EU-SysFlex (2018) European Flexibility Roadmap - D10.5 

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EnTEC – Study on Energy Storage 

Figure 48  

US electricity markets 

Outside the EU, some countries have announced storage goals. While goals by national operators 
and companies are common, goals set by the government are rather seldom. In the US and China, 
the  governments  have  announced  storage  goals.  In  China  this  has  been  coupled  with  specific 
measures such as priority connection, which have boosted storage, while in the US the target is 
more recent and therefore is not a main cause for the growth observed until 2021. The design of 
organised markets, in contrast, does not seem to be a significant factor to explain strong develop-
ment of storage in the US and China compared to the EU, as even in the US the relevance of re-
newable  PPAs  (which  are  much  more  common  than  in  the  EU)  is  likely  more  important  for  the 
development of storage than access to organised electricity markets. 

This does not, however, reduce the importance of providing non-discriminatory access to electricity 
markets  for  all  flexibility  sources  and  to  adequately  source  all  necessary  ancillary  services  using 
market-based procurement as far as possible, given these markets are the most significant ones to 
storage. 

To complement the analysis of the main drivers, some specific best practices are highlighted below. 

Facilitating market access to energy storage  

The US Federal Energy Regulation Commission (FERC) order No 841245 of 2018 mandates regional 
transmission organisations (RTOs) and independent system operators (ISOs) to:  

1)  “Ensure that a resource using the participation model is eligible to provide all capacity, energy, 
and ancillary services that the resource is technically capable of providing in the RTO/ISO mar-
kets 

2)  Ensure that a resource using the participation model can be dispatched and can set the whole-
sale market clearing price as both a wholesale seller and wholesale buyer consistent with exist-
ing market rules that govern when a resource can set the wholesale price; 

3)  Account for the physical and operational characteristics of electric storage resources through 

bidding parameters or other means; and 

245  https://www.ferc.gov/media/order-no-841 

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EnTEC – Study on Energy Storage 

4)  Establish a minimum size requirement for participation in the RTO/ISO markets that does not 

exceed 100 kW.” 

More specifically, the order includes several interesting provisions, such as requiring all RTOs/ISOs 
to: 

  Allow storage to de-rate its capacity in order to meet minimum run-time requirements (in for 

example capacity mechanisms) 

  Have provisions providing a participation model for electric storage resources that accounts for 
the physical and operational characteristics of electric storage resources through bidding pa-
rameters or other means. This would allow storage operators to submit in the bids or elsewhere 
(e.g. when registering with the RTO/ISO) information such as State of Charge, Upper and Lower 
Charge Limits, and Maximum Charge and Discharge Rates. In turn, this could then be consid-
ered in the market clearing algorithm. 

FERC order 841 should improve the access of front- and behind-the-meter storage to electricity 
markets, and has a different approach to achieve this compared to the provisions of the revised EU 
Electricity Directive and Regulation (with for example the above-mentioned smaller minimum size 
requirement of 100 kW). Nonetheless, there is still no indication so far it provides a better frame-
work for enabling the participation of storage than the EU regulatory framework, and as mentioned 
above significant storage growth in the US was seen already in 2020 due to other factors, as the 
major US market operators planned to implement order 841 only by August 2021.246 

Value Stacking 

Some network operators reviewed their exclusivity clauses, such as National Grid, which conducted 
a consultation247 and then updated its ancillary services contract terms & conditions.248 National 
Grid accepts the stacking of revenues from some services, with the following rules: 

 

“Providers can offer single or multiple services to single or multiple buyers [across Availability 
Windows]. The onus is on the Provider to ensure that asset(s) are available to perform under 
each contract they are party to. Providers can offer active and reactive services to the ESO and 
/ or DNO across Availability Windows 

  Multiple services can be provided to multiple buyers over an Availability Window if the require-
ments  of  the  services  are  compatible  and  the  provision  of  one  service  does  not  impede  its 
performance under an existing contract.  

  A single active or reactive power service cannot be provided to multiple buyers over an Availa-
bility Window, as this would result in the potential for double counting of MW or Mvars [or 
non-delivery of one of the contracted services].  

  Multiple services can be provided to a single buyer over an Availability Window, if the require-
ments of the services are compatible and if the provision of one service does not impede the 
ability to perform against an existing contract.” 

Thus, the more restrictive condition affects delivery of two services in the same availability window, 
especially if this concerns two different clients, while there are much less restrictions for the delivery 
of services in different availability windows. 

246  https://dukespace.lib.duke.edu/dspace/bitstream/handle/10161/20484/Final%20Draft_print.pdf?sequence=1&isAllowed=y 

247  National Grid (2018b) Review of Exclusivity Clauses within Balancing Services Contracts. https://www.nationalgrideso.com/sites/eso/files/docu-

ments/Review of Exclusivity Clauses within Balancing Services Contracts Sep 2018.pdf 

248  National Grid ESO (2020) ESO Balancing Services: A guide to contracting, tendering and providing response and reserve services. 

https://www.nationalgrideso.com/document/142161/download 

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Another case of rules on revenue stacking is the use case of California. The Commission of Public 
Utilities  of  the  State  of  California  (CPUC) made  a  decision  on  providing  guidance  regarding the 
stacking of multiple electricity system services and therefore improving the economic viability for 
the energy storage industry in California.249 The CPUC defined a number of services that storage 
can provide in different domains, as shown below. 

Table 21 

CPUC domains and reliability/non-reliability services of storage250 

Domain 

Reliability Services 

Non-Reliability Services 

Customer 

None 

TOU bill management; 
Demand charge management; 
Increased self-consumption of on-site 
generation; 
Back-up power; 
Supporting customer participation in DR 
programs 

Distribution 

Distribution capacity deferral; 
Reliability (back-tie) services; 
Voltage support; 
Resiliency/microgrid/islanding 

Transmission  Transmission deferral; Inertia; 
Primary frequency response; 
Voltage support*; Black start 

Wholesale 
Market 

Frequency regulation; Spinning 
reserves; Non-spinning reserves; 
Flexible ramping product 

None 

None 

Energy 

Resource 
Adequacy 

Local capacity; Flexible capacity; 
System capacity 

None 

* Adapted from CPUC (2018) Order Instituting Rulemaking to consider policy and implementation refinements to the Energy 
Storage Procurement Framework and Design Program (D.13-10-040, D.14-10-045) and related Action Plan of the California En-
ergy Storage Roadmap 

CPUC then created 11 stacking rules providing a hierarchy of services (with reliability services having 
priority) and domains. While it remains to be seen if the rules strike a good balance between facil-
itating revenue stacking while providing reasonable certainty of delivery of the contracted services, 
they illustrate how relatively simple rules can clarify what stacking is allowed and what is not:251 

  Rule 1. Resources interconnected in the customer domain may provide services in any domain. 
  Rule 2. Resources interconnected in the distribution domain may provide services in all domains 
except the customer domain, with the possible exception of community storage resources, per 
Ordering Paragraph 11 of D.17-04-039. 

  Rule 3. Resources interconnected in the transmission domain may provide services in all do-

mains except the customer or distribution domains. 

249  Clean Energy Law Report (2018). California Adopts Rules for Evaluating Multiple-Use Energy Storage Resources. https://www.cleanenergylawre-

port.com/energy-storage/california-adopts-rules-for-evaluating-multiple-use-energy-storage-resources/ 

250  https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M206/K462/206462341.PDF 

251  https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M206/K462/206462341.PDF 

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  Rule 4. Resources interconnected in any grid domain may provide resource adequacy, trans-

mission and wholesale market services. 

  Rule 5. If one of the services provided by a storage resource is a reliability service, then that 

service must have priority. 

  Rule 6. Priority means that a single storage resource must not enter into two or more reliability 
service obligation(s) such that the performance of one obligation renders the resource from 
being unable to perform the other obligation(s). New agreements for such obligations, includ-
ing contracts and tariffs, must specify terms to ensure resource availability, which may include, 
but should not be limited to, financial penalties. 

  Rule 7. If using different portions of capacity to perform services, storage providers must clearly 
demonstrate, when contracting for services, the total capacity of the resource, with a guarantee 
that a certain, distinct capacity be dedicated and available to the capacity-differentiated relia-
bility services. 

  Rule 8. For each service, the program rules, contract or tariff relevant to the domain in which 
the service is provided,  must  specify enforcement of these rules, including  any penalties for 
non-performance. 

  Rule  9.  In  response  to  a  utility request for  offer,  the  storage  provider  is  required  to  list  any 
additional services it currently provides outside of the solicitation. In the event that a storage 
resource is enlisted to provide additional services at a later date, the storage provider is required 
to provide an updated list of all services provided by that resource to the entities that receive 
service from that resource. The intent of this Rule is to provide transparency in the energy stor-
age market. 

  Rule 10. For all services, the storage resource must comply with availability and performance 

requirements specified in its contract with the relevant authority. 

  Rule 11. In paying for performance of services, compensation and credit may only be permitted 
for those services which are incremental or distinct. Services provided must be measurable, and 
the same service only counted and compensated once to avoid double compensation 

Ancillary services 

In 2011, the FERC order 755 on “Frequency regulation compensation in the organised wholesale 
power markets” found  that current practices by RTOs  and  ISOs were  “unjust, unreasonable, and 
unduly discriminatory or preferential” as they failed to acknowledge the “greater amount of fre-
quency regulation service being provided by faster-ramping resources”. The order requires system 
operators to add a performance payment which reflects the quantity of frequency regulation pro-
vided by the resource in response to a dispatch signal.252 FERC also issued in 2016 order 825 on 
settlement intervals and shortage pricing, requiring RTOs and ISOs to align settlement and dispatch 
intervals, and that they “trigger shortage pricing for any interval in which a shortage of energy or 
operating reserves is indicated during the pricing of resources for that interval”. 253 

As mentioned in section 4.2.2, the UK also possess an FFR procurement mechanism. However, Na-
tional Grid ESO notes that “the services that participants may offer into the monthly FFR tender are 
not completely standardised. There is a manual process to evaluate these monthly tender offers, 
which is becoming increasingly unmanageable as the number of providers grows”.254 

252  https://www.ferc.gov/sites/default/files/2020-06/OrderNo.755.pdf 

253  https://www.ferc.gov/sites/default/files/2020-05/settlement825.pdf; Broeckx et al. (2019) Energy Storage - Our take on business models and 

regulation 

254  ESP Consulting (2020) Frequency Response Auction Trial - Evaluation Report 

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National Grid ESO is implementing a planned reform of its balancing markets, leading to introduc-
tion of three new services as shown below. National Grid ESO has provided a detailed roadmap for 
the reform of the frequency response services it procures.255 

Table 22  

New frequency response services introduced by National Grid ESO256 

Product 

Operational range 

Response type 

Dynamic regulation 

+/- 0.015 to 0.1 Hz 

Pre-fault 

Dynamic moderation 

+/- 0.1 to 0.2 Hz 

Dynamic containment 

+/- 0.2 to 0.5 Hz 

Post-fault 

The existing FFR mechanism (named Enhanced Frequency Response) is planned to be phased out 
in Q3 2022, and also the Firm Frequency Response service will be phased out. 

255  https://www.nationalgrideso.com/research-publications/markets-roadmap 

256  Modo Energy in Energy Storage News (2020) What is Dynamic Containment and what does it mean for battery energy storage in the UK? 

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4.3 

Long-duration energy storage (LDES) 

Summary of analysis on long-duration energy storage 

  Long-duration storage may have a different meaning for different systems, nonetheless, 
it can be understood that long-duration storage should be able to discharge continu-
ously for multiple hours (more than 4, or even 10) up to even weeks and therefore con-
tribute to daily, weekly and/or seasonal system flexibility needs. 

  For long-duration storage in the weekly to seasonal timeframe, technologies are either 
still in development, such as power-to-gas-to-power, or the potential left in the EU is 
limited/located in some MSs only, such as is the case of reservoir and pumped hydro-
power. 

  The needs for weekly and seasonal flexibility will increase in the future. Nevertheless, it 
is unclear how much new LDES will be necessary in the future EU electricity system to 
meet  long-term  flexibility  needs,  given  competition  with  other  flexibility  sources.  In-
creased renewable energy targets should increase flexibility needs. Some studies indicate 
the existing long-duration flexibility (such as gas-fired power plants) could be sufficient 
to meet long-duration flexibility needs to 2050. Further research is needed on how much 
long-duration flexibility the increased renewable energy targets and reduced gas con-
sumption could require, among which from storage. The justification for specific support 
schemes for large-scale long-duration energy storage deployment should be driven by 
flexibility needs. 

  The cost of new long-duration energy storage (LDES) technologies remains high com-
pared to other existing flexibility solutions. Therefore, policy discussions are strongly re-
lated  to  need  for  further  development  of  long-duration  energy  storage  technologies’ 
technical performance and costs 

  Other issues for LDES could be addressed. This includes increasing the liquidity and im-
proving products in forward markets, and improving capacity mechanism design where 
this are demonstrably needed to assure resource adequacy. Also, the market for hybrid 
RES-storage, which could significantly support LDES, is incipient, and measures could be 
foreseen to develop the PPA market, explicitly consider hybrid projects in RES support 
auctions (or have dedicated windows for it), and enable value stacking for co-located 
storage. 

4.3.1 

Review of issues concerning long-duration energy storage 

It must be noted that while the current study is focused on the electricity system, the need for long-
duration storage will exist across the energy system. Currently the bulk of long-duration storage is 
provided by the storage of fossil fuels.257 Other energy storage technologies such as purely thermal 
energy storage can also make significant contributions to long-duration energy storage. 

In  order  to  discuss  long-duration  energy  storage  (LDES),  it  is  first  useful  to  define  it.  There  is  a 
general agreement on the definition of “duration”, meaning the maximum continuous period of 
time during which the storage can “sustain power output at its maximum discharge rate”.258 The 
duration  of  discharge  is  related  to the  energy  capacity  of  the  storage, which  contrasts  with  the 

257  CEER (2021) Long-Term Storage CEER “European Green Deal” White Paper series (paper I) 

258  U.S. Energy Information Administration (EIA). 2020. Battery Storage in the United States: An Update on Market Trends. 

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power capacity. The energy capacity of projects for many, but not all, long-duration energy storage 
technologies can be increased without increasing the power capacity. In this way, increased dis-
charged durations could be achieved at a lower cost compared to an alternative where also the 
power capacity has to be increased (with correspondent increased CAPEX). 

The disagreement between studies concerns the minimum duration which characterises long-du-
ration energy storage. This can range from ‘a few hours’ to 10 hours or more. Thus, various defini-
tions exist in the literature, such as “any technology that can be deployed competitively to store 
energy for prolonged periods and that can be scaled up economically to sustain electricity provi-
sion, for multiple hours, days, or even weeks, and has the potential to significantly contribute to the 
decarbonisation of the economy”.259  

NREL indicates that minimum durations of 4 and 10 hours are most commonly mentioned in the 
literature. However, NREL indicates that the definition will depend not only on the technical and 
economic characteristics of the storage technologies, but also on the exact resource adequacy ser-
vices needed. The latter will change according to load patterns, RES penetration levels and storage 
deployment, and thus different systems could require different continuous discharge durations to 
meet various  adequacy  challenges.  This  means  that  long-duration  storage  may  have  a  different 
meaning for different systems, and thus NREL does not recommend using a single definition for all 
systems. 260Nonetheless, it can be understood that long-duration storage should be able to dis-
charge continuously for multiple hours (4, or even 10) up to even weeks. 

Moreover, commonly the energy capacity of some (but not all) long-duration energy storage tech-
nologies can be expanded without corresponding increases in the power capacity. That is, one can 
increase  the maximum  quantity of  GWh  stored  without  changing  the  power  of  the  storage,  ex-
pressed for example in MWs. 

By being able to discharge for several hours, days or weeks, long-duration energy storage can con-
tribute to daily, weekly and/or seasonal system flexibility needs. These flexibility needs are driven 
by changes in the power generation structure as well as in load patterns. Electrification of end-uses 
and increasing penetration of intermittent RES (mainly wind and solar PV) should increase the need 
for flexibility in the daily to seasonal timeframes. Solar PV deployment increases the need for daily 
flexibility needs, while wind penetration drives the weekly flexibility needs. Demand patterns as well 
as wind and solar PV generation profiles all drive seasonal flexibility needs.261 

Mature storage technologies exist for short-duration storage, such as lithium-ion batteries (station-
ary or for mobile applications) and (pumped) hydro storage. Also, these and other mature technol-
ogies may also provide some long-duration storage, meeting for example daily flexibility needs, 
but  are  less  suited  for  weekly  or  seasonal  flexibility  provision.  For  long-duration  storage  in  the 
weekly to seasonal timeframe, technologies are either still in development, such as power-to-gas-
to-power, or the potential left in the EU is limited or located in some MSs only, such as is the case 
of reservoir hydropower. Therefore, the policy discussions on long-duration storage are related to 
need for further development of LDES technologies’ technical performance and costs.262  

CEER estimates that up to 2040 there is no additional need for seasonal electricity storage263, as the 
remaining fossil-based generators should be able to provide the necessary flexibility. However, this 

259  McKinsey (2021) Net-zero power Long duration energy storage for a renewable grid 

260  NREL (2021) Storage Futures Study - The Challenge of Defining Long-Duration Energy Storage. https://www.nrel.gov/docs/fy22osti/80583.pdf 

261  Artelys (2017) Mainstreaming RES - Flexibility portfolios 

262  McKinsey (2021) Net-zero power – Long duration storage for a renewable grid 

263  CEER (2021) Long-Term Storage CEER “European Green Deal” White Paper series (paper I) 

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analysis is conditional on assumptions of that study, such as the existence of sufficient natural gas 
and gas-based power generation capacity in that timeframe. Even if the overall gas volumes nec-
essary in 2040 are set to decrease and the main use for gas in the power sector will be for flexibility 
purposes, security of gas supply may be a factor – among other uncertainties. 

Hence, whether existing flexibility sources and additional pumped hydro capacity264 will suffice to 
meet seasonal flexibility needs of the European power system is  still uncertain. Also, besides the 
seasonal timeframe there could still be the need for flexibility in the daily to weekly timeframes, to 
which long-duration storage could contribute. Therefore, this section does not analyse further how 
important a role long-duration energy storage could have in the future European electricity system, 
but assumes it will have a role to a certain extent (in competition with other technologies capable 
of offering long-duration flexibility), in order to focus on the regulatory barriers and measures to 
enable LDES. 

Support scheme designs for storage considered in the UK 

Given it is unclear whether and how much long-duration storage will be necessary in the EU in 
the future, the justification for support schemes for large-scale LDES deployment does not yet 
exist. However, it is interesting to consider the adequacy of some support scheme designs, in 
case policy makers wish to implement those in the future. 

In the UK, a number of different designs were considered: 

  A regulated asset base (RAB) model, where the storage operator would receive a certain 

rate of return on investments, with revenues or wheeling charges eventually capped; 

  Cap and floor mechanism, where the revenues of the storage operators would be guaran-
teed within a certain range, for an agreed number of years. In case revenues fell below the 
lower limit, the operator would be compensated, and conversely if revenues in a given year 
were above the upper limit, the operator would have to give back the  excessive profits. A 
variation would be for only a floor to be set. 

  Contract for difference (CfD), where the operator receives an agreed strike price for the 
energy generated, with the government covering any differences to the market price, if the 
strike price is lower, and pocketing the difference if it is higher. Contracts for difference are 
one variation of a sliding premium design, with others possible. 

  A reformed capacity market, where the capacity provider receives a yearly payment for be-

ing available in scarcity situations.  

The UK government considered that the RAB and CfD designs were not adequate for storage, as 
they did not incentivise storage to react to price signals and to provide flexibility when needed. 
Instead, the government considered a cap and floor as the most adequate design (although it 
still contained challenges for incentivising some new technologies such as hydrogen) and poten-
tially also a reformed capacity market.   

The most important barrier for new long-duration energy storage technologies remains the high 
cost compared to other existing flexibility solutions, such as gas storage or hydropower. Innovation 
policy for  these technologies is  therefore important,  but is out of scope of the present analysis. 
Also, non-discriminatory system planning including all potential flexibility solutions is critical in or-
der to provide a level-playing field for long-duration energy storage, by considering all solutions 

264  Artelys notes that pumped hydro storage could provide significant flexibility in the daily to weekly timeframes, with unused potential in ES and 

IT. See Artelys (2017) Mainstreaming RES - Flexibility portfolios 

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EnTEC – Study on Energy Storage 

for inclusion in network development plans (also from third parties) and as alternative to network 
expansion – this is addressed in the network planning topic. 

Aside from the issues above (improvements in technical performance and cost, and non-discrimi-
natory system planning), the most common issues for the development of long-duration energy 
storage are:265 

  Lack of sufficient long-term price differentials, either because of fundamental drivers such 
as limited renewable energy penetration or existence of other flexibility sources, or market fail-
ures distorting price signals; 

  Uncertainty about future project revenues and overall bankability difficulties, as in order 
to obtain financing the projects need to have some level of revenue certainty for a number of 
years; 

  Design issues with the various wholesale, capacity and ancillary service markets and pro-
curement mechanisms, affecting not only the price differentials mentioned above but restrict-
ing participation to the markets; 

  Uncertainty about future market reforms and challenges to consider storage adequately, 

leading to regulatory risk for storage projects; 

  High capital cost and/or long lead time for certain techs, such as reservoir or pumped stor-
age hydropower, increasing project uncertainty due to e.g. changed market circumstances once 
the project is commissioned; 
Incentives for short-term cycling due to lower uncertainty of short-term prices in all electricity 
markets, compared to prices in the future.  

 

Many of these issues affect also shorter-duration storage technologies, and some are discussed in 
the other sections of the report. The present section focuses on issues which affect the technologies 
analysed in chapter 1 which are capable of sustaining discharges for a longer duration. This includes, 
among others, hydrogen (and other power-to-gas-to-power technologies) and redox-flow batter-
ies with  a long-term  storage capacity, but also technologies where  chapter 1 indicates having a 
short/mid-term  storage  capacity  but  still  can  sustain  a  discharge  of  4  hours  or  longer,  such  as 
pumped hydro, compressed/ liquefied air energy storage (CAES/LAES), and stationary lithium-ion 
batteries.  

4.3.2 

Status in the EU27 

De-risking market and economic risks for long-duration storage and providing access to long-term 
revenues stands out as an important topic, which should improve the application of long-duration 
energy storage in several use cases (i.e. the application of a storage technology for a certain service). 
Use cases for storage are further discussed in chapter 1. As there are still limited analyses on the 
topic, in particular focused on the EU, the following issues concerning de-risking and long-term 
revenues are analysed: 

Issues with forward markets hinder long-term energy arbitrage 

 
  Entry barriers to capacity mechanisms and lack of maturity of grid capacity services procure-

ment 
Incipient market for hybrid RES-storage 

 

265  As discussed in: CEER (2021) Long-Term Storage; Aurora Energy Research (2022) Long duration electricity storage in GB; BEIS (2021) Facilitating 
the deployment of large-scale and long-duration electricity storage: call for evidence; Helman (2020) Development of Long-Duration Energy 
Storage Projects in Electric Power Systems in the United States: A Survey of Factors Which Are Shaping the Market; Jacobs (2020) Strategy for 
Long-Term Energy Storage in the UK; McKinsey (2021) Net-zero power Long duration energy storage for a renewable grid; NREL (2021) Stor-
age Futures Study The Challenge of Defining Long-Duration Energy Storage; REA (2021) Longer-Duration Energy Storage: The missing piece to 
a Net Zero, reliable and low-cost energy future 

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EnTEC – Study on Energy Storage 

  Specific support to long-duration energy storage may not be justified 

These  issues may not be exclusive to long-duration  energy storage, rather affecting  all types of 
storage. However, here the focus of analysis is long-duration energy storage, even if removing the 
issues could help all types. 

4.3.2.1 

Issues with forward markets 

Most existing market opportunities for energy storage surveyed in Chapter 1 are focused on the 
short-term (energy arbitrage in spot markets, provision of balancing and non-frequency ancillary 
services, customer energy management). Long-term markets are naturally the best suited to value 
long-duration flexibility and thus are a logical candidate for the participation of long-duration stor-
age. 

Long-duration storage could use arbitrage in forward markets as a significant source of revenue, 
exploring price differentials between long-term delivery periods as long as sufficient counterparties 
in the market exist. In this way, (organised) forward markets could be a main long-term market for 
storage, complementing other options such as PPAs. 

However, the lack of maturity of forward markets and/or higher uncertainties with longer time ho-
rizons compromise the ability of these markets to represent significant revenue streams to storage. 
Forward markets (comprising all trades beyond the D-1 timeframe)266 product delivery lead times 
can  range  anywhere  from  several  days  to  years.  Market  liquidity  in  the  main  European  forward 
markets has not changed significantly since 2016, and is considered by ACER to be ‘modest’ in most 
markets, although non-cleared over-the-counter  trades have been decreasing.  Germany  has the 
highest forward market liquidity, with a churn rate above 7 for the 2016-2020 period.267  

While market participants in other markets theoretically have access to the German market through 
cross-border  hedging  instruments  (long-term  transmission  rights  or  other  instruments  in  some 
borders),  participants  lack  adequate  hedging  opportunities  in  some  borders,  and  cross-border 
hedging does not fully compensate for lack of liquidity in local forward markets.268  

Therefore, while storage operators in Germany might have access to liquid forward products in the 
daily to quarterly timeframe for long-term arbitrage, storage operators in other Member States may 
not easily find counterparties for long-term hedges, or only at high transaction costs – especially 
for Member States not immediately neighbouring liquid forward markets (such as the German one) 
or that cannot access adequate cross-border hedges to those markets. Furthermore, there is limited 
information on the liquidity of forward markets per product delivery lead time (i.e. daily, weekly, 
monthly, quarterly or annual), so it may be that liquidity is higher in annual products (which are not 
as relevant for storage as products with a  shorter delivery lead time). Moreover, the  Long-Term 
Transmission Rights products available do not generally match the products available in forward 
markets - ENTSO-E indicates that especially yearly and monthly products are available.269 

Moreover, uncertainty naturally increases with the delivery horizon. Therefore, long-duration stor-
age might have difficulty exploring price differentials across multiple days or weeks, if liquid market 
products are unavailable in those lead times. This can lead long-duration storage to focus on intra-

266  Exceptions may exist, such as the Daily Products Market (MPEG) in Italy, with a D-2 timeframe. 

267  ACER (2022) Market Monitoring Report 2020 – Electricity Wholesale Market Volume 

268  ACER (2022) Market Monitoring Report 2020 – Electricity Wholesale Market Volume 

269 ENTSO-E (2021) Options for the design of European Electricity Markets in 2030 

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EnTEC – Study on Energy Storage 

day cycles270, which might not be the most adequate operational strategy for longer-duration stor-
age technologies – leading to a higher number of cycles which may affect the operational lifetime 
of e.g. batteries, and to the operator having to focus on markets where other flexibility solutions 
might be more competitive. 

4.3.2.2  Entry barriers to capacity mechanisms and lack of maturity of 

grid capacity services procurement 

Barriers for the participation of storage in capacity mechanisms still exist, as discussed in section 
4.2. The main storage technologies contracted in capacity mechanisms (for delivery in 2026-2035) 
are first of all pumped hydro storage, then technologies other than hydropower (likely to comprise 
mainly batteries) and finally reservoir hydropower.271 

The need for a capacity mechanism must be demonstrated by the European resource adequacy 
assessment (ERAA), which can be complemented by the national adequacy assessment. In case of 
discrepancies between ERAA and NRAA, ACER will be required to issue an opinion on whether the 
differences between the two assessments are justified. Therefore, capacity mechanisms as a revenue 
stream for long-duration storage will likely not be available in all Member States. 

Moreover, the main adequacy indicators employed by the ERAA, loss of load expectation (LOLE) 
and energy not served (ENS) do not provide information on the average resource scarcity period 
duration – that is, if say for a given area the scarcity period lasts, on average, 10 hours or 3 days. 
Therefore, even if an area may show high LOLE and ENS, indicating resource adequacy issues, this 
does not provide information whether for example weekly or seasonal flexibility needs are not be-
ing  met.  The  design  of  specific  capacity  mechanisms  will  be  attentive  to  this  matter,  but  at  the 
European level the ERAA fails to provide this information, which would be helpful to provide an 
indication on the need for flexibility which could be met by long-duration energy storage. 

Thus, capacity mechanisms aim to address resource adequacy issues for which long-duration stor-
age technologies with a discharge of several days or even weeks are well-suited for. But capacity 
mechanisms form currently only a small share of total revenue streams for storage operators,272 
even if the participation of storage in capacity mechanisms is increasing, as shown in section 4.2. It 
is possible adequacy services will constitute a significant revenue stream for some long-duration 
projects in the future, but it is unlikely the service will be able the main driver for long-duration 
energy storage deployment  in most  Member States. Moreover, entry barriers to (long-duration) 
storage in capacity mechanisms still exist in the EU. 

Another storage application valuing long-term / seasonal flexibility is support to transmission or 
distribution infrastructure to defer investments, what is also called grid capacity services. This 
issue  is addressed  in the network  planning topic, and  its use by network operators is still at it’s 
infancy, with important issues to be overcome. It’s important to note, however, that it is likely that 
it will be more cost-effective to deal with highly-congested lines through network expansions rather 
than with the contracting of flexibility sources (unless permitting and other issues significantly hin-
der the expansion projects). Flexibility sources such as storage could be a suitable alternative to 
network expansion to address other forms of congestion, for example where lines are not neces-
sarily congested for a high number of hours but still face structural congestion related to e.g. PV 
renewable  electricity generation  peaks or  EV  peak  charging  times.  However,  Therefore,  the  grid 

270  McKinsey (2021) Net-zero power Long duration energy storage for a renewable grid 

271  ACER (2022) Market Monitoring Report 2020 – Electricity Wholesale Market Volume 

272  UK Department for Business, Energy and Industrial Strategy (2021) Facilitating the deployment of large-scale and long- duration electricity 

storage: call for evidence 

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EnTEC – Study on Energy Storage 

capacity firming market for very long-duration storage may not represent an important share of 
the revenues (although it could represent a relevant market for long-duration storage with a dis-
charge of 4-10 hours). 

In any case, there are few market mechanisms valuing long-term flexibility currently. It is likely that 
long-duration storage will need to rely on short-term markets focusing on flexibility in the (intra-
)hourly to at most daily timeframes to complement revenues from the provision of flexibility in the 
weekly to seasonal timeframes. However, when participating in these short-term markets long-du-
ration  energy storage  may  be  at  a competitive disadvantage to other storage  technologies and 
flexibility solutions. 

4.3.2.3  Incipient market for hybrid RES+storage 

Capacity firming – “use of energy storage to render variable RES output more constant during a 
given period of time”273 - is recognised as an important service that can be provided by storage, as 
shown in the market analysis (task 2). The present  analysis focuses on  the capacity firming  case 
where storage is combined on or off-site with large-scale renewable energy plants for sale of the 
electricity  to  third-parties  –  i.e.  merchant projects. Behind-the-meter  storage  combined  with  for 
example solar PV for self-consumption is a relevant application for both residential and commercial 
& industrial self-consumers, but not analysed here due to the different business case and regulatory 
issues it raises.  

Existing examples of RES+storage currently focus on the use of battery storage. However, in the 
future other storage technologies could gain relevance. Long-duration storage could be of interest 
to firm capacity in a multi-day to even multi-week period. This could be interesting especially for 
firming wind (onshore and offshore capacities). Storage can also be used for firming solar PV gen-
eration on a daily basis. Depending on penetration levels and the system needs, this could required 
firming over multiple hours274, thus requiring long-duration storage. Solar PV is also characterised 
by a strong seasonal component, meaning long-duration storage in the seasonal timeframe could 
eventually be of interest. However, the daily timeframe is of more immediate interest to solar PV. 

RES+storage can be valued through different market mechanisms: 

  The corporate or utilities PPA market may provide a premium for firmed renewable energy 
  Renewable energy producers may want to combine with storage in order to improve their op-

portunities for participation in spot (arbitrage) and ancillary services markets 

  Renewable support mechanisms may explicitly target RES+storage, providing additional reve-
nues or higher scores compared to a pure renewable energy facility, or even assigning specific 
support windows to RES+storage 

  Capacity mechanisms may also foresee specific  rules  for RES+storage which account for the 

higher firm energy they are able to provide 

Each  of  these  opportunities  for  merchant  RES+storage plants  may face regulatory  (and  market) 
issues. We focus here on selected issues which could affect particularly long-duration storage. 

The RES+storage PPA market in Europe is still incipient, while more experience is available in the 
US.275 The development of the PPA market is dependent on a number of factors – among which 

273  EASE (2020) Energy Storage Applications Summary 

274  As the penetration of storage increases, any new additions would have to discharge for longer duration, as the ‘short-duration’ peaks would be 
covered by already-existing storage assets. See NREL (2021) Storage Futures Study - The Challenge of Defining Long-Duration Energy Storage. 
https://www.nrel.gov/docs/fy22osti/80583.pdf 

275  https://www.dena.de/fileadmin/dena/Publikationen/PDFs/2019/dena-REPORT_How_to_use_PPAs_for_cost-efficient_extension_of_re.pdf 

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EnTEC – Study on Energy Storage 

the level of support mechanisms available to large-scale renewable projects (which represent an 
opportunity cost for RES project developers considering the PPA market). For off-site storage, the 
possibility to operate virtual power plants (if e.g. portfolio bidding is allowed instead of only unit-
based bidding) is a requirement. Where bilateral contracts restrictions are in place in order to in-
crease the liquidity of organised markets, as in Greece276, they can represent a barrier. As mentioned 
in section 4.2.3, the ability of promotors in the US to make use of tax incentives to solar PV which 
also covered hybrid plants is a significant enabler of merchant hybrid projects. 

It is rare that renewable support mechanisms in the EU have dedicated tenders or rules for hybrid 
power plants. As of April 2021, hybrid power plants were eligible only in tenders in Portugal and 
Germany.277 Since then, solar PV+storage was awarded further contracts in the German innovation 
tender of August 2021.278 Hungary also just conducted a tender for renewable energy where co-
location with storage was obligatory.279 

Another case  identified  is  in  the  Spanish  renewable  energy  tender,  where  the  price  received  by 
hybrid power plants is adjusted to expose these facilities more to the market price, compared to a 
renewable energy plant without storage, which is exposed less to the market price.280 Therefore, 
while specific rules for hybrid power plants are in place in Spain, this does not necessarily value the 
greater dispatchability of the hybrid power plants – as greater market exposure may increase the 
risks to the project. However, in the Royal Decree 960/2020 an auction calendar is foreseen, with 
specific auctions for new or repowered installations making use of storage or dispatchable tech-
nologies.281 Also, frequently the hybrid power plant is not allowed to withdraw energy from the 
grid, only to inject. While this is a simple way to ensure all energy injected is of renewable origin, it 
makes value stacking by the storage+RES operator impossible, which could otherwise lower costs. 

Currently, there is limited information on the consideration of hybrid power plants in recent capacity 
mechanism  tenders.  Given  the  issue  is  quite  novel,  this  aspect  has not  been  covered  by  ACER’s 
analysis of entry barriers to capacity mechanisms.282 As an example, on one hand the revised rules 
for the Italian capacity mechanism foresees that for production units combined with storage, the 
combined firm capacity is equivalent to the sum of the separate firm capacities (i.e. for example the 
derated capacity of the RES generation plus that of the storage system).283 On the other, the capac-
ity obligations mechanism in France names only a few storage technologies as explicitly eligible for 
participation (among which batteries and pumped hydro storage).284 

276  Market Reform Plan for Greece. https://energy.ec.europa.eu/consultations/consultation-greek-market-reform-plan_en 

277  AURES II (2021) Database. http://aures2project.eu/auction-database/ 

278  BNetzA (2021) Statistiken: Innovationsausschreibungen. https://www.bundesnetzagentur.de/SharedDocs/Downloads/DE/Sachgebiete/Ener-

gie/Unternehmen_Institutionen/Ausschreibungen/Statistiken/Statistik_InnAusV.xlsx?__blob=publicationFile&v=2 

279  https://renewablesnow.com/news/hungary-opens-tender-for-864-gwh-of-renewable-power-775890/ 

280  http://aures2project.eu/wp-content/uploads/2021/10/AURES_II_case_study_Spain.pdf 

281  https://www.miteco.gob.es/es/prensa/estrategiaalmacenamiento_tcm30-522655.pdf 

282  ACER (2022) Market Monitoring Report 2020 – Electricity Wholesale Market Volume 

283  Terna (2021) Mercato della Capacità -  Disposizioni Tecniche di Funzionamento n.2 (section 4.3). https://dow-

nload.terna.it/terna/CM_DTF2_8d9ae88f34aeadb.pdf 

284  RTE (2022) MECANISME DE CAPACITE - Arrêté du 21 décembre 2021 modifiant les règles du mécanisme de capacité et pris en application des 
articles R. 335-1 et suivants du code de l'énergie - Dispositions complémentaires résultant des délibérations de la Commission de régulation de 
l’énergie du 1er décembre 2016 et du 24 janvier 2018 et prises en application des articles R. 335-7, R.335-49, R. 335-55, et R.335-63 du Code de 
l’énergie. https://www.services-rte.com/files/live//sites/services-rte/files/documentsLibrary/2021-12-29_REGLES_MECANISME_DE_CAPA-
CITE__6631_en 

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4.4 

Double taxes, charges and grid tariffs issues for storage  

Summary of double taxes, charges and grid tariff issues for storage 

  Cases where taxes, surcharges and/or grid tariffs are imposed twice on electricity that is 
stored and fed back into the grid constitute a penalty for the business case of energy 
storage solutions 

  The issue affects many of the potential applications including arbitrage, all ancillary ser-

vices and various services to support transmission and distribution infrastructure 

  A provision in a revised Energy Taxation Directive is being considered to address double 

taxation and to ensure that grid tariffs are cost-reflective and non-discriminatory 

  While it is too early to assess the transposition of the relevant EU regulation, recent pro-
gress in some Member States has been identified, including the Netherlands and Slove-
nia. 

  Several other Member States, including Finland, Germany, Luxembourg and Sweden al-

ready made progress with addressing the issue before. 

4.4.1 

Review of issues concerning double taxes, charges and grid 
tariffs 

Most electricity taxes, levies and tariffs have been designed on the assumption that electricity flows 
in one direction, from producer to consumer. The tariff or tax is charged at the point of consumption 
or injection, which generally leads to each unit of consumed electricity being charged once. But 
when electricity is stored and reinjected into the grid this may lead to a situation where the final 
consumption of electricity is effectively taxed twice, for instance once at the storage facility and 
once at the final consumer. This situation leads to additional costs for electricity storage facilities 
and adversely affects the viability of its business case, which constitutes a barrier to its uptake. We 
define the barrier as: 

‘Double application of taxes, charges and tariffs for stored electricity’ 

This barrier can apply to a different extent depending on the storage technology (pumped hydro 
is for instance often already exempted from consumption-based taxes and tariffs), grid connection 
level (transmission or distribution) and whether the storage capacity is placed in front-of-the-meter 
or behind-the-meter. Additionally, the situation and logic may be different for taxes (excises) and 
surcharges (e.g. for RES) on the one hand, and grid tariffs on the other hand, because for grid tariffs 
the double application of charges may make more sense when considering that the grid is effec-
tively used twice (although double tariffs may still not be warranted due to benefits of storage in 
reducing grid congestion). 

Within the rest of this section, we discuss the situation for taxes and charges separately from the 
situation for grid tariffs, also because the data sources and data collection approach differ between 
the two. This effectively leads to two sub-issues: 

1) 
2) 

‘Double application of taxes and surcharges for stored electricity’ 
‘Double application of grid tariffs for stored electricity’ 

The issue is recognised and already partially addressed in the latest EU regulation. The recast Elec-
tricity  Regulation  indicates  that  energy  storage  should  not  be  discriminated, either positively or 

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EnTEC – Study on Energy Storage 

negatively.285 Additionally, article 15(5)(b) of the Electricity Market Directive286 states that ‘Member 
States shall ensure that active customers that own an energy storage facility are not subject to any 
double charges, including network charges, for stored electricity remaining within their premises or 
when providing flexibility services to system operators’. For grid tariffs, further relevant articles are 
included in the Electricity Market Regulation287, which states that ‘network charges shall be cost-
reflective, transparent, take into account the need for network security and flexibility and reflect actual 
costs incurred and are applied in a non-discriminatory matter’ (art. 18(1)), which may imply that it 
would be logical to charge a grid tariff any time the grid is used, irrespective of whether it’s used 
for final consumption or for charge or discharge of electricity storages, unless that charge or dis-
charge  relieved  network  congestion.  On  the  other  hand,  the  regulation  states  that  ‘the  network 
charges shall not discriminate either positively or negatively against energy storage or aggregation 
and shall not create disincentives for self-generation, self-consumption or full participation in demand 
response’ (art. 18(1)). If electricity markets and network tariffs are well-designed they could incen-
tivise storage to operate in a way that reduces the system flexibility needs and grid congestion. IN 
this case, art. 18(1) would warrant that network tariffs are set in a way that recognises this positive 
externality of storage to the system, with the use of tariff discounts or other means to avoid double 
charging. 

The  proposed revision  of the Energy Taxation  Directive  also would  eliminate double taxation of 
electricity excise taxes in the EU for energy storage. Article 22 (4)(1st subpar) proposes that “for the 
purposes of the first subparagraph, electricity storage facilities and transformers of electricity may 
be considered as redistributors when they supply electricity”.288 The question is to what extent and 
how these provisions have been implemented in the Member States. Through this report we aim 
to provide an up-to-date view on this, focusing on the identification of best practices. 

The  double taxes and charges barrier, if in  place, affect  any application of storage that  involves 
charging with electricity from the grid and discharging electricity to the grid. This means that the 
barrier affects many of the services, including arbitrage, all ancillary services and various services to 
support transmission and distribution infrastructure. The main category of services which are not 
or less affected by the issue are customer energy management services. For the services impacted, 
the importance of the issue depends on the frequency of charging and discharging and the value 
of the services offered. For instance, for arbitrage on the daily fluctuations of electricity prices the 
impact will be more significant than for specific ancillary services that are only provided irregularly 
but capture a high value. As an example, double taxation and grid charges can significantly affect 
the profitability of energy arbitrage, but the value of providing e.g. balancing  energy services is 
high compared to spot prices. Therefore, in case of double taxation, taxing the energy ‘consumed’ 
by the  storage  does not affect  the business case significantly. Network  tariffs are also generally 
lower than the balancing energy services value, and thus again do not affect the business case. 

285  Regulation 2019/943 on the internal market for electricity 

286  Directive 2019/944 on common rules for the internal market for electricity 

287  Regulation 2019/943 on the internal market for electricity 

288  Proposal for a COUNCIL DIRECTIVE restructuring the Union framework for the taxation of energy products and electricity (recast). 

COM/2021/563 final 

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EnTEC – Study on Energy Storage 

4.4.2 

Status in the EU27 

4.4.2.1  Taxes and surcharges 

For taxes and surcharges, front-of-the-meter, a first assessment of the status of the existence of 
this barrier across the EU has been compiled in our 2020 study on energy storage289 which has been 
translated into a summary overview in another study for the European Commission290. These find-
ings have been updated and validated within this study, in particular to identify recent progress in 
addressing this barrier and best practices for doing so. Through this update we identified progress 
in the Netherlands, where energy storage facilities with a large-scale consumption connection are 
exempted from paying taxes per January 1st, 2022291. Furthermore, it should be noted that several 
countries already had addressed double taxation for front-of-the-meter storage. For example, Fin-
land already eliminated  electricity taxation  for large  batteries before and further exemptions for 
pumped storage and smaller batteries are foreseen. Germany and Luxembourg also already had 
several exemptions in place for storage providers to address double taxation. And in Sweden, the 
possibility to refund consumption taxes paid by storage providers already existed. 

For behind-the-meter storage, limited information is available from transversal sources. Going by 
the status for double application of grid tariffs for behind-the-meter storage it seems likely that 
this barrier will be mostly in place, as for grid tariffs this is still the case for all EU MS. One of the 
reasons for this is that it is hard to distinguish between energy that is consumed and energy that is 
stored and energy that is self-produced and energy that is fed back from a storage facility as this 
all happens behind the meter. The issue for behind-the-meter storage is also somewhat different 
due to the ability to avoid taxes by storing self-produced electricity at times of excess supply and 
using it later, thereby avoiding taxes, charges and tariffs on the electricity that would be taken from 
the grid otherwise (in case no net metering scheme applies). 

4.4.2.2  Grid tariffs 

For grid tariffs the situation is monitored by ACER in publications on the transmission tariffs292 and 
on distribution tariffs293. In both cases, we consider ACER’s findings comprehensive and up-to-date 
and have not conducted any additional data collection or validation ourselves. A summary of ACER’s 
findings is provided below. 

Transmission tariffs 

Two types of transmission tariffs can be distinguished, namely: transmission tariffs for injection and 
for withdrawal. Transmission tariffs for injection are any charges from the Transmission System Op-
erator (TSO) applied to electricity injected in the grid from a storage facility whereas transmission 
tariffs for withdrawal are any charges from the TSO applied to electricity withdrawn from the grid 
by a storage facility. Electricity tariff design consists of two main aspects, mainly: recovering costs 
and efficiency. Recovering costs is the main objective of setting tariffs and efficiency is about cost-

289  Artelys, Trinomics and Enerdata (2020) - Study on energy storage – Contribution to the security of the electricity supply in Europe 

290  Trinomics, E3-Modelling and DIW (2021) - The role of energy taxation and prices for the clean energy transition in the context of sector inte-
gration and carbon border mechanisms: Energy system modelling and future scenarios, Lot 1: Impact of fiscal and non-fiscal charges on the 
energy system, Study 1 - Framework, methodology and mapping of current situation 

291  https://business.gov.nl/amendment/no-double-taxation-energy-storage/ 

292  ACER (2019) - ACER Practice Report on Transmission Tariff Methodologies in Europe 

293  ACER (2021) - Report on Distribution Tariff Methodologies in Europe 

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EnTEC – Study on Energy Storage 

reflectivity and sending correct economic signals to network users for optimal use of the network. 
Transmission costs might vary according to location or time. 

The applicability of transmission tariffs for storage facilities in 2019 is summarised in Table 23. 8 EU 
Member States apply injection charges for pumped hydro and/or other storage facilities, although 
partial exemptions apply for two of those Member States (Belgium and France). 12 MS apply with-
drawal  charges  for  pumped  hydro  and/or  other  storage facilities.  There  are  5  MS  that  explicitly 
exempt all storage providers from all transmission tariffs (Italy, Lithuania, Latvia, Poland, Slovenia) 
and  several others  where  it  is  not  fully  clear  yet  as the rules  are not  explicitly  stated  for certain 
network users, often because such network users (e.g. battery storage providers) did not exist yet. 

Table 23 

Applicability of transmission tariffs for relevant network user groups 

Application of injection charges 

Network User:  Pumped hydro 

Other storage 
(e.g. batteries) 

Austria 
Belgium 
Bulgaria 
Cyprus 
Czech Republic 
Germany 
Denmark 
Estonia 
Greece 
Spain 
Finland 
France 
Croatia 
Hungary 
Ireland 
Italy 
Lithuania 
Luxembourg 
Latvia 
Malta 
Netherlands 
Poland 
Portugal 
Romania 
Sweden 
Slovenia 
Slovakia 

Yes 
Partially 
No 
No 
No 
No 
N/A 
No 
No 
Yes 
N/A 
Partially 
No 
No 
Yes 
No 
No 
No 
No 
No 
No 
No 
Yes 
Yes 
N/A 
No 
No 

N/A 
Partially 
No 
No 
No 
No 
N/A 
No 
No 
N/A 
Yes 
Partially 
No 
No 
Yes 
No 
No 
No 
No 
No 
No 
No 
N/A 
N/A 
N/A 
No 
N/A 

Other network 
users who both 
inject and 
withdraw 
No 
No 
No 
No 
No 
No 
No 
No 
No 
No 
No 
No 
No 
No 
No 
No 
No 
No 
No 
No 
No 
No 
No 
No 
No 
No 
No 

Application of withdrawal 
charges 

Pumped hydro 

Other storage 
(e.g. batteries) 

Yes 
Yes 
Yes 
N/A 
Yes 
Partially 
N/A 
N/A 
Yes 
Yes* 
N/A 
Partially 
Yes 
N/A 
Partially 
No 
No 
N/A 
No 
No data 
N/A 
No 
No 
Yes 
N/A 
No 
No 

N/A 
Yes 
Yes 
N/A 
N/A 
Partially 
N/A 
N/A 
N/A 
N/A 
Yes 
N/A 
N/A 
N/A 
Yes 
No 
No 
N/A 
No 
No data 
N/A 
No 
N/A 
N/A 
N/A 
No 
N/A 

N/A = No such network user group in that jurisdiction294 
No = Network user not subjection to injection/withdraw charges 
Yes = Network user subject to injection/withdrawal charges 
Partially = exemptions apply  
* = In 2020, PHS should pay charges, however under the Spanish NRA’s methodology proposal, PHS facilities do not pay trans-
mission charges 

294  ACER (2019) - ACER Practice Report on Transmission Tariff Methodologies in Europe 

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EnTEC – Study on Energy Storage 

The composition of transmission tariffs can vary across the different MSs and can be energy-based, 
power-based and lump sum. According to ACER (2019), the majority of MSs apply energy-based 
tariffs for injection whereas Ireland & Slovak Republic use a power-based component. The decision 
on how these tariffs are built-up (i.e. power-based, energy based or lump sum) can influence (long-
term) investment choices and the (short-term) operation decisions of a producer. Regarding with-
drawal, in the majority of MSs the transmission tariffs have both an energy-based and a power-
based component. 6 MSs apply only an energy-based component whereas the Netherlands com-
bine power-based and lump sum for withdrawal tariffs. 

Distribution tariffs 

In  this  section the applicability of  distribution grid tariffs for energy storage for different  MSs is 
analysed and discussed.  

The number of DSOs vary from MS to MS and the size of a country is not necessarily a key driver 
for the amount of DSOs. For example, there are 883 DSOs in Germany whereas there is only one 
DSO in Hungary, Czech Republic, Ireland, Malta and Slovenia. In 16 out of 22 MSs with multiple 
DSOs, the DSOs apply the same distribution tariff methodology, either because of national law or 
because  of  a  decision  by  the  NRA.  For  the  remaining  6  MSs  with  multiple  DSOs  different  tariff 
methodologies apply, for example in Denmark, Finland and Sweden, the DSOs can design their own 
tariff structures within certain legal boundaries.295 

Similar to the transmission tariff methodology, the structure of distribution tariffs can be differen-
tiated in energy-based, power-based and lump sum (or a combination). For example, in Austria and 
Belgium (Flanders) the charges are energy-based, whereas in France, Malta, the Netherlands and 
Luxembourg the tariff setting is lump sum. 

Network users who use the distribution grids can be subject to injection charges and withdrawal 
charges. Network users who inject electricity into the network are divided into four groups: 

  Producers, including both RES and non RES producers who do not withdraw electricity from the 
network except for the purpose of feeding in the auxiliary services. This group is does not pro-
vide energy storage services and is therefore not of interest for this study; 

  Pumped hydro storage; 
  Other storage facilities (e.g. batteries); 
  Other network users, who both inject and withdraw (e.g. prosumers). 

From the summary in Table 24 we observe that 10 MSs apply injection charges to storage providers 
(including prosumers). These injection charges can be divided per group: 3 MSs (AT, FR, SE) apply 
injection charges to PHS, 4 MSs (BE, FR, LT, SE and) apply injection charges to the network group 
‘other storage (e.g. batteries)’, and 9 MS apply injection charges to ‘other network users’, for exam-
ple prosumers or self-consumers. For Estonia  and Sweden, charges only apply above certain in-
stalled capacities for prosumers. 

Network users who withdraw electricity from the network and offer storage services can be subdi-
vided into:  

1)  Pumped hydroelectric energy storage facilities (PHS); 
2)  Other storage facilities (e.g. batteries);  
3)  Other network users, who both inject and withdraw. 

295  ACER (2021) - Report on Distribution Tariff Methodologies in Europe 

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EnTEC – Study on Energy Storage 

Regarding the withdrawal charges for the distribution grid, 6 MSs apply withdrawal charges to PHS 
facilities (see Table 24). Moreover, 8 MSs apply withdrawal charges to other facilities (e.g. batteries) 
and all MSs apply withdrawal charges to other network users (e.g. prosumers). 

It should be noted that double application of grid tariffs does not always affect prosumers when a 
net-metering  scheme  is  in  place.  In  particular,  when  grid  tariffs  are  energy-based,  the  ability  to 
offset produced and consumed electricity and only pay/earn based on the net balance results in a 
situation where grid tariffs on stored electricity that is fed back into the grid are not paid. 

In 8 MSs (DE, DK, ES, FR, HU, IE, IT and SI) active consumers (AC) are protected from having to pay 
double charges (status in 2020), including network charges for storage facilities since the MS incor-
porated the provision of active consumers into national law.296 

296  ACER (2020). Market Monitoring Report – Electricity Wholesale Market Volume 

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EnTEC – Study on Energy Storage 

Table 24 

Applicability of distribution tariffs for relevant network user groups 

Grid tariffs 
distribution 
grid 

Application of injection charges 

Application of withdrawal charges 

Network 
user: 

Pumped 
hydro storage 

Other storage 
(e.g. 
batteries) 

Austria 
Belgium 
Bulgaria 
Cyprus 
Czech 
Republic 
Germany 
Denmark 
Estonia 
Greece 
Spain 
Finland 
France 
Croatia 
Hungary 
Ireland 
Italy 
Lithuania 
Luxembourg 
Latvia 
Malta 
Netherlands 
Poland 
Portugal 
Romania 
Sweden 
Slovenia 
Slovakia 

Yes 
N/A 
- 
- 

- 

- 
- 
N/A 
- 
- 
No 
Yes 
- 
- 
- 
- 
N/A 
N/A 
- 
N/A 
N/A 
- 
- 
- 
Yes 
- 
No 

N/A 
Yes 
- 
- 

- 

- 
- 
N/A 
- 
- 
No 
Yes 
- 
- 
- 
- 
N/A 
Yes 
- 
N/A 
N/A 
- 
- 
- 
Yes 
- 
N/A 

Other 
network users 
who both 
inject and 
withdraw 
(e.g. 
prosumers) 
Yes 
No 
- 
- 

- 

- 
- 
Partially 
- 
- 
Yes 
Yes* 
- 
- 
- 
- 
Yes 
Yes 
- 
No 
Yes 
- 
- 
- 
Partially 
- 
Partially 

Pumped 
hydro storage 

Other storage 
(e.g. 
batteries) 

Partially 
N/A 
No 
N/A 

N/A 

Partially 
N/A 
N/A 
N/A 
No 
No 
Yes 
No 
N/A 
N/A 
No 
N/A 
N/A 
N/A 
N/A 
N/A 
No 
No 
Yes 
Yes 
N/A 
Yes 

N/A 
Yes 
No 
N/A 

N/A 

Partially 
N/A 
N/A 
N/A 
No 
No 
Yes 
No 
Yes 
Yes 
No 
N/A 
Yes 
N/A 
N/A 
N/A 
No 
N/A 
Yes 
Yes 
No 
N/A 

Other 
network users 
who both 
inject and 
withdraw 
(e.g. 
prosumers) 
Yes 
Yes 
Yes 
Yes 

Yes 

Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 

N/A = No such network user group in that jurisdiction 
Yes = Network user subject to injection/withdrawal charges 
- = No injection charge applies for any user of the distribution grid 
Yes = Network user group partially subject to injection/withdrawal charges 
Partially = exemptions apply 
*In France active consumers are only subject to a lump-sum management fee for injection. 

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EnTEC – Study on Energy Storage 

4.5 

Non-discriminatory network planning  

Summary of issues related to non-discriminatory network planning  

  The  role  of  storage  assets  should  be  properly  reflected  by  network  operators  in  their 
network planning, in order to evaluate correctly their potential to contribute to network 
development and system operation. Similarly, network operators should take fully into 
account the potential of storage when conducting the resource adequacy assessment. 
  The EU legislative framework for inclusion of storage in network planning is largely set 
in place, but there are some lags in implementation on national level – in national net-
work development plans and in distribution network development plans. Storage assets 
(pumped hydro and/or others) are included in the transmission network development 
plans of BG, GR, IE, LV, SI and PT. 

  Moreover, the incentives for network operators to consider alternative measures to in-
vesting in new power lines (such as electricity storage) are used only scarcely in MSs. 
  Only large-scale storage assets are considered by network operators, in particular in the 
resource adequacy assessments – this means the potential contribution of storage is not 
fully analysed and it puts smaller storage assets in disadvantage. 

  These issues impact in particular arbitrage and provision of ancillary services by storage 
operators, but in general almost all services and technologies are impacted by shortcom-
ings in network planning processes. 

4.5.1 

Review of issues for storage  

Including  storage  assets  into  the  network  models  can  enable  rationalisation  of  network  assets, 
avoiding costly (and lengthy/otherwise problematic) investment in energy transport and distribu-
tion projects, besides contributions to system flexibility. In case storage or other non-conventional 
flexibility sources such as demand response are not considered in the network plans, the necessary 
system flexibility will have to be met by conventional solutions, such as interconnectors. Network 
planning can also indicate the value of storage assets for network operation to the investors, facil-
itating build-up of storage assets that are beneficial for the system operation. 

The network operators are also responsible for assessing the resource adequacy (RAA) of the elec-
tricity system. In these assessments, the network operators analyse whether sufficient resources are 
available to meet the expected demand (in the 10-year time horizon) and whether additional re-
medial measures are needed. As storage assets can be one of the most significant sources of flexi-
bility  needed  to  balance  the  supply  and  demand  in  electricity  networks,  the proper  inclusion  of 
storage assets in the RAA is also important to accurately indicate the systemic value of storage for 
the electricity system. As both the RAA and network planning process can deliver similar benefits 
to storage operators, they are considered together in this section. 

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EnTEC – Study on Energy Storage 

Energy storage assets are not sufficiently considered, mainly on national level, in net-
work planning processes as a flexibility source and as an alternative to network expan-
sion 

In the EU TYNDP, large-scale storage projects (at least 225 MW capacity) are included in network 
modelling and there is a specific CBA methodology for them.297 In the 2022 draft common scenarios 
report298, the ENTSOs estimate the volume of future flexibility needs, distinguished between peak-
ing units, demand-side response and batteries. The scenario building methodology mentions mod-
elling of the following flexibility assets, related to energy storage: 

  Residential-scale batteries, modelled in connection with rooftop PV development 
  Utility-scale batteries, as a function of system needs 
  DR: electric vehicles capacity 
  Electrolyser capacity available for flexibility services 
  Electricity demand for heat pump is modelled, but flexibility/storage potential is not assessed 

The updated  TEN-E regulation299  (which entered  into  force in  June  3rd  2022) proposes  improve-
ments of the planning process. Among other changes, a dedicated article on scenarios for TYNDP 
was added. According to the new rules, ACER shall prepare framework guidelines for the develop-
ment of the joint ENTSO-E – ENTSOG scenario. The guidelines shall ensure that the scenarios reflect 
the Energy Efficiency First principle and are in line with the EU decarbonisation targets. Moreover, 
ENTSO-E and ENTSOG will have to prepare a new “infrastructure gaps” report within the TYNDP 
process, reflecting the energy efficiency first principle 

At the national level, every two years, TSOs should submit a ten-year National Development Plan 
(NDP) to the regulatory authority based on existing and future supply and demand forecasts. Ac-
cording to article 51 of Electricity Market Directive TSOs should consider alternatives to network 
expansion, such as energy storage, when planning network development.300 

Moreover, article 32 of the Directive sets new requirements on the use of flexibility in distribution 
networks. Paragraphs 1 and 2 of article 32 stipulate that MSs shall provide the necessary regulatory 
framework to allow and provide incentives to distribution system operators to procure flexibility 
services, including congestion management in their areas. The regulatory framework “shall ensure 
that distribution system operators are able to procure such services from providers of distributed 
generation, demand response or energy storage and shall promote the uptake of energy efficiency 
measures, where such services cost-effectively alleviate the need to upgrade or replace electricity 
capacity and support the efficient and secure operation of the distribution system”. 301 

According to article 32 (3) at least every two years the DSO should publish NDPs and provide trans-
parency in regard to the medium and long-term flexibility services required in the network. The 
NDP should include the use of energy storage facilities or other resources that the DSO could use 
as an alternative to network expansion.302 Moreover, regarding public consultations on the NDP 
the DSO shall consult all relevant system operators and TSOs and publish the results accordingly.  

297  ENTSO-E (2021). 3rd ENTSO-E Guideline for Cost Benefit Analysis of Grid Development Projects. Available at: https://eepublicdown-

loads.blob.core.windows.net/public-cdn-container/tyndp-documents/CBA/210322_3rd_ENTSO-E_CBA_Guidelines.pdf 

298  ENTSO-E and ENTSOG (2021). TYNDP 2022 Draft Scenario Report. Available at: https://2022.entsos-tyndp-scenarios.eu/wp-content/up-

loads/2021/09/2021-10-TYNDP_2022_Draft_Scenario_Report.pdf 

299  https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52020PC0824 

300  Article 51 (3) Directive (EU) 2019/944 

301  Article 32 Directive (EU) 2019/944  

302   Article 32 (3) (EU) Directive 2019/944  

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ACER has identified several shortcomings of the network planning process that are related to the 
role of storage:303 

  Not all national development plans are aligned with the NECPs; this might result in network 
development scenarios that assess differently the role of storage providers (especially in case 
of DSR, electromobility, residential-scale batteries and other smaller assets); 

  Storage projects are not allowed to be included in planning in several MSs; In some other MSs, 

storage projects are allowed, but not actually included in the planning process. 

  Public consultation process has limitations in some countries; this reduces the ability of storage 

asset operators to contribute their views to the planning process; 

  Not all DSOs prepare network development plans; Not all countries have an established process 
of planning coordination between TSOs and DSOs; this limits the ability to correctly assess the 
value of storage assets on both network levels; 

Network operators are not sufficiently incentivised to consider alternative network de-
velopment measures (alternatives to building new power lines) 

Energy storage asset  operators  are under risk  of discrimination  in  the current  network  planning 
process. Currently, the TSOs propose methodology for and carry out the cost-benefit analysis of 
projects  included  in  the  network  development  plans.  Given  that  the  transmission  infrastructure 
owned by the TSO is in direct competition with alternatives such as storage, the TSOs can be in-
centivised to prefer the transmission infrastructure solutions.304 This bias towards capital expendi-
ture-heavy investments and the lack of incentives for TSOs to opt for less-costly investment was 
recently reiterated by ACER as one of the areas where the EU regulation should improve, in order 
to incentivise smart investment in network infrastructure.305 However, while ACER MMR’s indicates 
the barrier  “Lack  of incentives to consider non-wire  alternatives”, it  did not assess  it  due  to low 
priority and/or absence of data 

ENTSO-E does not include sufficiently the role of storage in the resource adequacy as-
sessment 

The  ENTSO-E  is  responsible  for  producing  annual  pan-European  resource adequacy  assessment 
(ERAA). The first iteration of this assessment in 2021306 was not approved by ACER307, among other 
reasons also because the assessment did not recognise sufficiently the value of demand-side re-
sponse. In case of storage, ACER concluded that the assessment methodology is sufficient for the 
time being, but will require improvements in the future. The relevant shortcomings of the assess-
ment are in particular308: 

303  ACER (2021). OPINION No 05/2021 on the electricity national development plans. Available at: https://documents.acer.europa.eu/Official_docu-

ments/Acts_of_the_Agency/Opinions/Opinions/ACER%20Opinion%2005-2021%20on%20the%20electricity%20national%20develop-
ment%20plans.pdf 

304  ACER and CEER (2021). Position on Improving the Regulation on Guidelines for Trans-European Energy Networks (TEN-E Regulation). Available 

at: https://www.ceer.eu/documents/104400/-/-/d83e6f21-ab19-bc92-25f1-5f7c70cac6ba 

305  ACER (2021). Position on incentivising smart investments to improve the efficient use of electricity transmission assets. Available at: https://doc-
uments.acer.europa.eu/Official_documents/Position_Papers/Position%20papers/Position%20Paper%20on%20infrastructure%20efficiency.pdf 

306  ENTSO-E (2021). European Resource Adequacy Assessment: 2021 edition. Available at: https://www.entsoe.eu/outlooks/eraa/ 

307  ACER (2022). ACER decides not to approve ENTSO-E’s first pan-European resource adequacy assessment due to shortcomings. Available at: 
https://www.acer.europa.eu/events-and-engagement/news/acer-decides-not-approve-entso-es-first-pan-european-resource-adequacy 

308  ACER (2022). DECISION No 02/2022 on the European Resource Adequacy Assessment for 2021. https://extranet.acer.europa.eu//Offi-

cial_documents/Acts_of_the_Agency/Individual%20decisions/ACER%20Decision%2002-2022%20on%20ERAA%202021.pdf 

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 

Limited scope – covering only pumped-hydro and large-scale batteries (the ERAA methodology 
states that only market-participating battery storage is modelled; behind-the-meter batteries 
should  be  covered  exogenously  in  the  demand  profiles  based  on  information  provided  by 
TSOs309). This is assessed by ACER as not being fully compliant with the requirements of the 
Electricity Regulation but acceptable in 2021 given the impacts on the ERAA’s purpose are lim-
ited; 

  Unclear data sources; 
  Untransparent assessment methodology used. 

However, the ENTSO-E aims to implement further advancements in the analysis in the following 
iterations, as indicated in its implementation roadmap.310 

Barriers specific for distribution networks 

DSOs (and TSOs) are prohibited from owning storage assets, but not other grid management de-
vices (such as VAR control).311 DSOs might be therefore incentivised to prefer investment in latter 
options,  when  considering  network  upgrades,  given  that  most  revenue-setting  frameworks  for 
DSOs  still  favour  capital  over  operational  or  total  expenditures.  This  barrier  can  be  addressed 
through a number of measures recommended by CEER, including proper network planning process, 
as described above, by reviewing the revenue-setting frameworks to avoid any CAPEX biases, and 
by ensuring the DSO request for tenders is as broad as possible. 312 

As the network planning process shows significant lag in implementation, it means the potential of 
storage assets to contribute to network management was largely not explored by the DSO. This is 
also due to the fact that, although the Article 23 of the Electricity market directive mandates the 
DSOs to consider storage assets in network planning, there is no harmonised methodology to do 
so. 

The shortcomings in proper evaluation of the role of storage (and other flexibility resources) are 
also related to the lack of required resources (human, expertise, capital) reported by the DSOs. This 
mainly applies to smaller DSOs, which are however numerous in some countries.313 As a result, it 
might lead to a situation where there is a significant difference in the level of integration of storage 
and flexibility resources between the system operators.  

Impact of the issues on storage technologies and services  

The ideal situation would in fact be, if the network operators would consider all relevant storage 
technologies services listed in chapter 1, both in the network planning process (to include the pro-
jects in the plans as well as to consider them as alternatives to network expansion) as well as in their 
resource  adequacy  assessment.  All  technologies  are  therefore  potentially  affected  by  the  issues 
listed above. 

But more specifically, addressing  the  issues  discussed  in this chapter would particularly  allow to 
improve the possibilities for storage to provide services to support transmission and/or distribution 

309  ENTSO-E (2021). European Resource Adequacy Assessment: Annex 3 Methodology. Available at: https://eepublicdownloads.az-

ureedge.net/clean-documents/sdc-documents/ERAA/ERAA_2021_Annex_3_Methodology.pdf 

310  ENTSO-E (2021). ERAA Implementation roadmap. Available at: https://www.entsoe.eu/outlooks/eraa/implementation-roadmap/ 

311  CEER (2020). CEER Paper on DSO Procedures of Procurement of Flexibility. Available at: https://www.ceer.eu/documents/104400/-/-/e436ca7f-

a0df-addb-c1de-5a3a5e4fc22b 

312  CEER (2020). CEER Paper on DSO Procedures of Procurement of Flexibility. Available at: https://www.ceer.eu/documents/104400/-/-/e436ca7f-

a0df-addb-c1de-5a3a5e4fc22b 

313  Trinomics (2021). The road to energy efficiency. Available at: 

https://www.europarl.europa.eu/RegData/etudes/STUD/2021/695480/IPOL_STU(2021)695480_EN.pdf. 

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infrastructure. Therefore, the  issues will  affect  particularly  pumped  hydro,  CAES/LAES,  stationary 
batteries, and mobile batteries (vehicle-to-grid), which are specific technologies well-suited to pro-
vide  those  services,  according  to  the  analysis  of  chapter  1.  Of  course,  other  technologies  could 
provide such services, once alternatives to network expansion are adequately considered in network 
development plans at the EU and national level. 

4.5.2 

Status in the EU27 

4.5.2.1  Status in EU27 and analysis of patterns/trends 

The paragraphs below summarise the status of selected issues in EU Member States. This summary 
is based on the 2021 ACER opinion on the electricity national development plans.314 

NDP aligned with NECP 

The National Energy and Climate Plans (NECP) should be taken into consideration while developing 
the NDPs. Possible reasons to not take the NECPs into consideration are related to timing, or there 
is no obligation by law in for example Cyprus. 18 out of 27 MSs took the NECPs into account while 
developing the NDPs. 

Storage (PHS & other storage facilities, e.g. batteries) allowed and/or included in the 
NDPs 

ACER reviewed which infrastructure categories are allowed and/or included in the NDP. Regarding 
Hydro-pumped energy storage facilities, 4 MSs allow and included these facilities in the NDP (BG, 
GR, IE, and PT), where 10 MSs only allowed this project infrastructure in the NDPs. Regarding other 
energy storage facilities, such as batteries, 5 MSs allowed and included this category in the NDPs 
(BG, GR, IE, LV, SI), whereas 12 MSs only allowed them.  

For example, storage assets (pumped hydro and/or others) are included in the network develop-
ment plans of. In 2018, the Portuguese TSO REN updated its dynamic system models to simulate 
among others storage assets, and the latest NDP includes a large pumped hydro storage project – 
the Gouvães plant with 880 MW.315 

Issues in public consultations of NDPs 

NDPs should be submitted to the NRA after having consulted all relevant stakeholders according 
to article 51 of Directive (EU) 2019/944. According to the study of ACER, in 15 MSs the NRA have 
the power or obligation to carry out a public consultation on the NDP. In Slovenia, no public con-
sultation  is  carried  out,  however  there  are  bilateral  consultations  with  stakeholders  carried  out 
whereas in Estonia, and Sweden no public consultations or bilateral consultations are carried out.   

14 MSs published stakeholders' comments and responses, 4 MSs published only the stakeholders’ 
comments and 3 MSs published a summary of stakeholders’ comments.  

Coordination between TSO and DSO NDPs 

The majority of the DSOs prepares NDPs and in almost all of them there is some level of alignment 
between the DSO and TSO. Alignment between the TSO and DSO NDPs are about data exchanges 

314  ACER (2021). ACER opinion on the electricity national development plans. Available at: https://documents.acer.europa.eu/Official_docu-
ments/Acts_of_the_Agency/Opinions/Opinions/ACER%20Opinion%2005-2021%20on%20the%20electricity%20national%20develop-
ment%20plans.pdf 

315   https://www.erse.pt/media/nx3ittiy/pdirt-2022-2031-mar%C3%A7o-2021-relat%C3%B3rio-final.pdf 

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EnTEC – Study on Energy Storage 

regarding scenarios and/or assumptions, consultations between the two parties and other align-
ment/join activities. For example, in Belgium and the Netherlands each DSOs prepares NDPs and 
there is data exchange between the TSO and DSOs. Whereas in for example, Austria there is no 
DSO NDP and is therefore identified as high barrier.  

In Hungary, the TSO and DSO prepare a single country wide high voltage NDP (> 132 kV) whereas 
in Bulgaria and Sweden there is no alignment at all between the TSO and DSO NDPs.  

4.5.3 

International best practices concerning network planning 

4.5.3.1  United Kingdom 

In the United Kingdom, the electricity system operation and ownership parts were legally separated 
in  2019,  and  the  transmission  system  operation  (including  network  planning)  activities  are  now 
managed  by  the  National  Grid  ESO  (NG  ESO).316  Furthermore,  the  British  government  has  an-
nounced the intention to create a unified “Future System Operator”. This publicly owned entity will 
take over the NG ESO activities, as well as the longer-term planning, forecasting and market strat-
egy functions with  regards to  gas system operation,  in  order to achieve an independent  whole-
system approach to the network planning in the future.317 While the explanatory documents do not 
explicitly refer to the role of energy storage (as they offer mainly high-level general analysis), the 
creation of independent entity responsible for network planning would address the potential con-
flict  of  interest  that  owners  of  transmission  infrastructure  owners  have  in  the  network  planning 
process. 

4.5.3.2  United States/North America 

NERC – Long-term reliability assessment318 

The North-American Electric Reliability Corporation released in 2021 the 2021 Long-Term Reliability 
Assessment. The main relevant points of this assessment are: 

  The development of flexibility resources is viewed as necessary to support the increasing level 
of variable generation. However, storage solutions are in general not expected to reach suffi-
cient scale within the next 10 years. 

  The high-level assessment focuses on grid-level battery and hybrid generation (+ pumped hy-

dro storage) 

  The following activities related to network and resource adequacy planning are noted: 

  The  California  Independent  System  Operator  (ISO)  conducts  an  annual  flexible  capacity 
technical study to assess the needs in the following three years. The flexibility assessment 
considers storage assets, including behind-the-meter storage. The 2021 edition however 
mentions that the current methodology for storage assessment is insufficient and might 

316  NG ESO (2022). Who we are. Available at: https://www.nationalgrideso.com/who-we-are 

317  UK Government (2022). Proposals for a Future System Operator role. Available at: https://www.gov.uk/government/consultations/proposals-

for-a-future-system-operator-role 

318  NERC (2021). 2021 Long-Term Reliability Assessment. Available at: https://www.nerc.com/pa/RAPA/ra/Reliability%20Assess-

ments%20DL/NERC_LTRA_2021.pdf 

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EnTEC – Study on Energy Storage 

even  overestimate  the  potential  contribution  of  storage  assets  to  meeting  the  flexibility 
needs and therefore updated methodology will be developed for the future versions.319 
  The Electric Reliability Council of Texas (ERCOT) has introduced a classification system for 
distributed energy resources that specifically includes storage.320 The assets fitting the def-
inition for distributed energy resources and registered with ERCOT are modelled in ERCOT 
transmission planning studies. For the rest, ERCOT relies on further information from mem-
ber transmission and distribution operators. 

319  CAISO (2021). CALIFORNIA INDEPENDENT SYSTEM OPERATOR CORPORATION FINAL 2022 FLEXIBLE CAPACITY NEEDS ASSESSMENT AND 

FINAL 2022 AVAILABILITY ASSESSMENT HOURS. Available at: http://www.caiso.com/Documents/May14-2021-Final2022FlexibleCapacityNeed-
sAssessment-Final2022AvailabilityAssessmentHours-ResourceAdequacy-R19-11-009.pdf#search=flexible%20capacity%20needs 

320  “An electrical generating facility located at a Customer’s point of delivery (point of common coupling) 10 MW or less and connected at a volt-

age less than or equal to 60 kV that may be connected in parallel operation to the utility system. Distributed generators include energy storage 
resources as well.“ NERC (2021). 2021 Long-Term Reliability Assessment. Available at: https://www.nerc.com/pa/RAPA/ra/Reliability%20Assess-
ments%20DL/NERC_LTRA_2021.pdf 

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4.6 

Guarantees of origin for renewable energy storage 

Summary of guarantees of origin analysis 

  The  current  EU  legislation  for  guarantees  of  origin  (GOs)  does  not  foresee  a  role  for 

energy storage, since GOs can only be issued to producers of energy. 

  There is only limited experience with GOs with a high temporal granularity and inclusion 
of storage. The current draft European GO standard foresees higher time granularity as 
an option, but there is no legal basis for (standalone) storage issuing GOs. 

  However,  the  proprietary  EnergyTag  GO  standard  was  developed  with  the  aim  of 
introducing granular GOs and also covers energy storage use cases. This standard has 
been  used  in  some  pilot  projects  and  should  be  a  basis  for  an  hourly  GO  market 
introduced in the UK. 

  There  could  be  a  potential  value  in  extending  the  GO  system  that  could  do  a  closer 
tracking renewable energy flows from production to consumption . This would include 
introducing GOs with a more detailed time granularity. Energy storage could then offer 
a “time shifting” service to allow conserving GOs in time. 

  Although a potential value exists, the scope of demand for the GO “time shifting” service 
is not known and probably limited at the moment. Moreover, the cost of introducing 
such  system  is  probably  higher  than  the  expected  benefits,  in  particular  due  to  the 
current low price of GOs. 

4.6.1 

Review of the topic 

Energy storage enables to physically decouple the consumption and production of renewable elec-
tricity. This is in contrast to the current system of Renewable Guarantees of origin (GOs), which does 
not require a physical link between the producer and consumer (e.g. electricity network) and only 
ensures limited temporal coordination between production and consumption of renewable elec-
tricity. 

Therefore, the GO system aims to reflect the value of renewable energy for the producer and con-
sumer, but does consider infrastructure aspects, and considers temporal aspects only to a limited 
extent. Supporting the deployment of storage is not a direct objective of the GOs system – that is 
rather to support the deployment of renewable energy. However, it could be interesting to consider 
how the system can better support storage, as long as this is not incompatible with its main objec-
tives. 

While providing locational investment signals to energy storage would require a complete overhaul 
of GO system, it is conceivable to consider the changes to the temporal validity of GOs, to establish 
a  closer  link  between  the  renewable  energy  production  and  consumption.  In  such  case,  energy 
storage assets could be allowed to provide a “time-shifting” service, meaning shifting the validity 
of GOs in time. Given that the functioning of the GO system was recently evaluated and updated in 
the proposed revision of the Renewable Energy Directive, only the potential of time-shifting service 
will be explored in this section. As detailed below, the demand for such service is currently limited 
or even non-existing, therefore these considerations are also at the moment hypothetical, with a 
more long-term view in mind. 

The role of storage is not included in the GO system design 

The possibility to include electricity storage in the GO system is not defined in the Renewable En-
ergy Directive. Therefore, there is no legal base for storage operators cancelling and issuing GOs. 

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EnTEC – Study on Energy Storage 

This also reflects the current situation, as there are no established GO schemes in operation that 
would include storage facilities. 

The scope of demand for the GO “time shifting” service is not known and probably lim-
ited 

As there is no (or very limited) real-word experience with storage offering time shifting services, 
there is only limited basis to estimate whether there would be a demand for such service. Although 
there is in theory great potential for demand for such services if more granular accounting of GOs 
is introduced, if the current yearly period of GO validity is preserved, the demand will likely remain 
limited. 

The adaptation cost of GO design and associated IT systems to have a high time granu-
larity currently outweighs the potential benefits to energy storage providers/ the po-
tential value of price signals for investments to energy storage that would contribute 
to renewable electricity integration 

Previous assessments of the possibilities to enhance the functionality of the GO system have shown 
that one major issue are the significant compliance cost associated with the required changes.321 
At the same time, the price of GOs still remains very low (not reaching over 1 EUR/MWh322), espe-
cially in relation to energy prices that have even risen in the recent years. Price volatility (and thus 
price differentials) might be a more relevant indicator in case of electricity storage than average 
energy price levels, but it is still apparent that the potential benefits of GOs for storage operators 
will probably be outweighed by the overall compliance costs. 

Moreover, the actual price of GOs is  not publicly available, as the GO market relies primarily on 
over-the-counter trading.323 This also limits the potential value of price signals to storage operators. 

The current GO design is not suited for the cost-efficient inclusion of energy storage: 

  The process of handling the GOs by storage operators is not defined, leaving some of the key 

conceptual questions unsolved; 

  GOs do not contain all the necessary information to enable greater time granularity (in partic-

ular they only mark the date of production, not the exact time). 

4.6.1.1  Overview of relevant EU legislation and upcoming implementa-

tion 

Renewable energy certification is covered under the Renewable Energy Directive (RED). 

According to Article 3(9) of RED, all MSs were required to establish renewable GOs and to increase 
the level of transparency to customers. The version of RED currently in force (RED II) was adopted 
in 2018 and had to be fully implemented by all MSs by 1 July 2021.  

Recital 55 of RED II states that:   

321  Trinomics et al, 2021. Technical support for RES policy development and implementation: Delivering on an increased ambition through energy 
system integration. Available at: https://op.europa.eu/en/publication-detail/-/publication/6fcc38cb-1440-11ec-b4fe-01aa75ed71a1/language-
en/format-PDF/source-253831298. 

322  Argus media, 2020. ARGUS Guarantee of Origin assessments. Available at: https://view.argusmedia.com/rs/584-BUW-606/images/POW-Sam-

ple%20Report-Argus-GOO-Rego-Report-Extract-Nov-2020.pdf 

323  AIB, 2021. Sources of price and market information. Available at: https://www.aib-net.org/facts/market-information/sources-price-and-market-

information. 

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EnTEC – Study on Energy Storage 

 

“Guarantees of origin issued for the purposes of the Directive have the sole function of showing 
to  a  final  customer  that  a  given  share  or  quantity  of  energy  was  produced  from  renewable 
sources. 

  A guarantee of origin can be transferred, independently of the energy to which it relates, from 
one holder to another. However, with  a  view to ensuring  that a  unit  of renewable energy is 
disclosed to a customer only once, double counting and double disclosure of guarantees of 
origin should be avoided.  

  Energy from renewable sources in relation to which the accompanying guarantee of origin has 
been sold separately by the producer should not be disclosed or sold to the final customer as 
energy from renewable sources. 
It is important to distinguish between green certificates used for support schemes and guaran-
tees of origin.”324 

 

According to Article 19(2): 

Issuance of guarantees of origin may be made subject to a minimum capacity limit. A guarantee of 
origin shall be of the standard size of 1 MWh. No more than one guarantee of origin shall be 
issued in respect of each unit of energy produced. 

Member States shall ensure that the same unit of energy from renewable sources is taken 
into account only once. 

Member States shall ensure that when a producer receives financial support from a support scheme, 
the market value of the guarantee of origin for the same production is taken into account appro-
priately in the relevant support scheme. 

Guarantees of origin shall be valid for 12 months after the production of the relevant energy 
unit. Member States shall ensure that all guarantees of origin that have not been cancelled expire 
at the latest 18 months after the production of the energy unit. Member States shall include expired 
guarantees of origin in the calculation of their residual energy mix. 

A guarantee of origin shall specify at least: 

(a)  the energy source from which  the  energy was produced  and the  start  and end dates of 

production; 

(b)  whether it relates to: 
electricity; 
gas, including hydrogen; or 
heating or cooling; 

(i) 
(ii) 
(iii) 

(c)  the identity, location, type and capacity of the installation where the energy was produced; 
(d)  whether the  installation has benefited from  investment  support  and whether the  unit  of 
energy has benefited in any other way from a national support scheme, and the type of 
support scheme; 

(e)  the date on which the installation became operational; and 
(f)  the date and country of issue and a unique identification number.”325 

4.6.1.2 

Impact of the issues on storage technologies and services 

The essential aim of storage GOs is to conserve the renewable quality of energy in time. Therefore, 
the value of storage GOs is in supporting renewables with capacity firming while maintaining the 

324  Recital 55 of Directive (Eu) 2018/2001 promotion oft he use of energy from renewable sources. https://eur-lex.europa.eu/legal-con-

tent/EN/TXT/?uri=uriserv:OJ.L_.2018.328.01.0082.01.ENG&toc=OJ:L:2018:328:TOC 

325  Article (19) 2 RED II 

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EnTEC – Study on Energy Storage 

renewable characteristics (or other sustainability criteria). Hence, the main service category enabled 
would be “generation support services and bulk storage services”. The main storage technologies 
that can provide such services are, as mentioned in chapter 1, pumped hydro storage, CAES/LAES, 
and batteries (both stationary and mobile employed for vehicle-to-grid purposes). Such services 
will  however provide  additional revenue  streams  to  storage  operators only when  they  are  suffi-
ciently valued by final consumers or other market participants in order to cover the costs to revise 
the GO system and associated systems, or implement another system. 

4.6.2 

Status in the EU27 

In general, the issues described above apply to all member states equally, as the use of GOs is not 
allowed by the current regulation. The following sections however describe some pioneering activ-
ities and pilot projects that aim to explore the possibility of using granular GOs and inclusion of 
storage. 

4.6.2.1  EECS rules 

The EECS rules326  are the  “principles and rules of operation  of the Association of Issuing Bodies 
(AIB) for the European Energy Certificate System (EECS)”, setting the standard for operation of GO 
schemes in the EU. The current version of the rules sets the framework for the use of GOs in gas 
storage only.  In  case of  electricity  storage,  the  only  relevant  provision  relates  to  pumped  hydro 
storage and it clarifies that GOs can be used only for electricity generated from natural inflow of 
water. 

4.6.2.2  Austria: inclusion of storage in the supplier mix disclosure 

The Austrian law requires all electricity supplier to disclose the exact composition of primary energy 
sources to their customers in the annual electricity bill. The Electricity Act of 2010327 mandates that 
energy sourced from storage facilities (including pumped hydro, other electricity storage and facil-
ities converting electricity into hydrogen and other renewable gases that are not directly feeding 
the gases to gas network) shall be disclosed separately with the use of “secondary labels”. These 
secondary labels disclose the origin of the primary energy used for charging the storage device. 
Operators of storage facilities with capacity larger than 250 kWh are mandated to keep track of all 
charges and discharges and the source of energy used to provide that information.328 329 

4.6.2.3  EnergyTag granular certificate (GO) standard 

Although technically based in UK, this standard was developed with the backing and support of 
European energy industry, with the aim to be globally applicable.330 

326  AIB (2021). EECS Rules. Available at: https://www.aib-net.org/eecs/eecsr-rules. 

327  Bundesministerium für Digitalisierung und Wirtschaftsstandort (2022). Bundesgesetz, mit dem die Organisation auf dem Gebiet der Elektrizi-

tätswirtschaft neu geregelt wird (Elektrizitätswirtschafts- und -organisationsgesetz 2010 – ElWOG 2010). Available at: 
https://www.ris.bka.gv.at/GeltendeFassung.wxe?Abfrage=Bundesnormen&Gesetzesnummer=20007045 

328  E-control (2021). STROM- UND GASKENNZEICHNUNGSBERICHT FÜR DAS PRÜFUNGSJAHR 2020. Available at: https://www.e-control.at/docu-
ments/1785851/1811582/E-Control_Stromkennzeichnungsbericht_2021.pdf/aa3761f8-010d-77db-d328-1de84cb030dc?t=1638530800624 

329  E-control (2022). Verordnung der E-Control über die Regelungen zur Stromkennzeichnung und zur Ausweisung der Herkunft nach Primärener-

gieträgern (Stromkennzeichnungsverordnung 2022 – KenV 2022). Available at: https://www.e-control.at/docu-
ments/1785851/0/V+KEN+0121+-+V+KEN+0121+VO+-+HAAS+Florian%2C+Dr.+%281%29.pdf/5aa12848-8014-669a-be78-
8bf55059b189?t=165035279149 

330  EneregyTag (2022). Available at: https://www.energytag.org/ 

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On top of standard information included in the (European) GOs, the standard proposes to include 
further information to enable temporal and geographical matching of production and consump-
tion:331 

  For temporal matching, the GOs would include information on the exact time (up to seconds) 
of the start and  end of  energy production. This enables  ex-post temporal matching on all 
levels of time granularity (hourly, 15, 5 minutes…), but, to be noted, not real-time matching of 
renewable consumption and production. 

  For geographical matching, the standard proposes to include information on the bidding zone 
the producer is connected to.332 This will ease the geographical matching on the bidding zone 
level  (although  still not  enabling  further  granularity  or  taking  in  consideration  network  con-
straints within a bidding zone).  

The EnergyTag standard also crucially defines the use for storage temporal shifting of GOs.  This 
should consist of following steps:333 

1)  When the storage device is charged, the original GO is cancelled. The storage operators issues 

a “Storage Charge Record” (SCR)334 instead.  

2)  When the storage device is discharged, the storage operator produces a “Storage Discharge 

Record” (SDR)335. 

3)  Storage operator may issue a “Storage Discharge GO” to be traded in the GO market or can 

also disclose the discharged energy to end customers in other use cases. 

The EnergyTag use case guidelines336 provide further details on some key issues: 

  Temporal shifting of GOs: The process of issuing temporarily shifted GOs is presented in Figure 
49 below. In is noteworthy that according to the guidelines, the resulting GO shifted in time 
should indicate the storage facility as the source of energy and the time of storage discharge 
as the time of production. Therefore, the recording the information on the original source of 
RE production is not mandatory (although it is possible). This approach allows for more flexi-
bility and less administrative burden, but might reduce the emission accountability potential of 
the overall system. 

  Quantification  of  storage  losses:  the  guidelines  propose  three  methods  –  1)  measuring  all 
charges and discharges, where the delta would be the losses; 2) preforming periodical meas-
urements  of  storage facility  efficiency;  3)  using  globally  accepted  efficiency  values  for  given 
technology. 

  Storage records allocation: This issue pertains to situations where multiple SCRs are produced 
for a storage facility and they need to be matched with an SDR. The guidelines suggest two 
approaches: a) First in – First out, where the oldest SCRs are matched with the SDR; or 2) letting 
the operator choose which SCR is to be matched with the SDR. 

  Storage device management: The guidelines also address a situation when the storage facility 
capacity is discharged, but  there are  some  remaining SDRs that cannot be matched with an 
SDR. This would mean that the storage operator would claim to store more renewable energy 

331  EnergyTag (2022). Granular Certificate Scheme Standard: Version 1. Available at: https://www.energytag.org/wp-content/up-

loads/2022/03/20220331-EnergyTag-GC-Scheme-Standard-v1-FINAL.pdf 

332  In addition to the identification of concrete physical location of the production facility, as mandated in the current GO schemes. 

333  EnergyTag (2022). Granular Certificate Scheme Standard: Version 1. Available at: https://www.energytag.org/wp-content/up-

loads/2022/03/20220331-EnergyTag-GC-Scheme-Standard-v1-FINAL.pdf. 

334  SCR = Registry record of energy charged to storage in a time interval 

335  SDR = Registry record of energy discharged from storage in a time interval 

336  EnergyTag (2022). Granular Certificate Use Case Guidelines: Version 1. Available at: https://www.energytag.org/wp-content/up-

loads/2022/03/20220331-EnergyTag-GC-Use-Case-Guidelines-v1-FINAL.pdf. 

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EnTEC – Study on Energy Storage 

in the facility than is the actual total amount of energy stored there at the same time. According 
to the guidelines, the storage operator could decide to cancel the SCR (match it with SDR with 
unknown beneficiary) or to keep the SCR anyway. The latter option, although possibly allowing 
more flexibility for storage operators, might however distort the market competition between 
different storage technologies that offer different storage time horizons. 

Figure 49  

Storage Temporal Matching Use Case Schematic337 

Pilot implementation of EnergyTag hourly GOs 

Nordpool hourly GOs market 

The energy exchange Nord Pool has announced in January that it plans to open a market for hourly 
GO certificates in the third quarter of 2022, based on the EnergyTag standard. The pilot project will 
be  available for  the  UK  market  and  will  initially  run  for  1 year. Nord  Pool  will  provide a  trading 
platform that will enable over-the-counter trading as well as exchange-based transactions.338 

FlexiDAO pilot programs 

The company FlexiDAO has recently announced successful completion of two pilot projects in which 
the  supplier (Eneco) and consumer (Microsoft) exchanged granular hourly GOs. Importantly, the 
GOs used in the project, although using the EnergyTag standard, were also in compliance with the 
existing EU GO scheme.339 These pilot project have, however, not included energy storage assets. 

337  EnergyTag (2022). Granular Certificate Use Case Guidelines: Version 1. Available at: https://www.energytag.org/wp-content/up-

loads/2022/03/20220331-EnergyTag-GC-Use-Case-Guidelines-v1-FINAL.pdf. 

338  Argus Media (2022). Nord Pool pilots hourly GOO market in UK. Available at: https://www.argusmedia.com/en/news/2296076-nord-pool-pi-

lots-hourly-goo-market-in-uk 

339  FlexiDAO (2022). Hourly certification of renewable electricity a step closer. Available at: https://www.flexidao.com/news/hourly-certification-of-

renewable-electricity-a-step-closer 

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4.7 

Contributions of thermal energy storage340 

Summary of thermal energy storage analysis 

  Thermal energy storage (TES) needs are expected to grow significantly in order to allow 

for the increased deployment of renewable energy 

  TES can contribute to the EU energy system in multiple ways, including facilitating the 
integration of renewable electricity and renewable thermal energy, moderating the need 
for increase in electricity generation capacity, increasing the energy efficiency of the sys-
tem (especially through the utilisation of waste heat), and providing ancillary services to 
the electricity system 

  Through these contributions, TES can lead to significant investment savings, help replace 
fossil fuel use, especially gas and coal, increase the energy system flexibility and reduce 
greenhouse gas emissions throughout the EU27 

  There exists a wide variety of thermal energy storage technologies and applications, var-
ying in temperature levels, possible sectors and technological maturity. TES forms there-
fore a diverse field present throughout the EU energy system 

  Recent best practices with TES in the EU and abroad are presented – but given the dif-
ferences across Member States, best practices in a Member State are often not readily 
applicable elsewhere, and need to be adapted to the local context. 

Thermal energy storage (TES) will be an important pilar to the decarbonisation of the 
EU energy system 

Thermal energy storage (for storage of heat and/or cool) is already widely used in the EU and 
worldwide and is an important enabler for the utilisation of renewable energy. According to 
the Heat Roadmap Europe 4 study,341 the total storage capacity deployed in the 13 Member States 
of the study amounted to 584 GWh.342 It is likely that actual TES capacities today in the EU surpass 
1 TWh, but reliable statistics do not exist.343 See further details in Chapter 2.1.4. The most common 
form of heat or cool storage technology in use today are (domestic) hot water tanks/installations. 
Some underground thermal energy storage (UTES, in Canada, Germany and other European coun-
tries) has been deployed, and experiments in ice and chilled water storage (mainly in Australia, US, 
China and Japan) have taken place. About half of global district heating storage needs is related to 
seasonal storage needs.344 

The decarbonisation of heat will be an important contributor to the overall decarbonisation 
of the EU energy system. Heat final consumption345 in the EU is expected to increase 36% by 2050 
compared to 2020, according to the Fit for 55 package MIX55 scenario (which is aligned to full net 
decarbonisation of the EU energy system by 2050). This represents an increase from 701 TWh (60 

340  In order to focus on the most relevant points for this study, this analysis is not presented in the same structure as the previous topics. 

341  Heat Roadmap Europe 4 (2018) HRE4 summary tables and figures. https://heatroadmap.eu/roadmaps/ 

342  The 14 countries of the study (AT, BE, CZ, FI, FR, DE, HU, IT, NL, PL, RO ES, SE plus the UK) account for approximately 80% of the EU28’s heating 

and cooling demand. Heat Roadmap Europe 4 (2018) HRE4 summary tables and figures 

343  Project discussion with TES experts, June 17th 2022 

344  IRENA (2020) Innovation Outlook – Thermal Energy Storage 

345  From CHP, district heating as well as geothermal, solar and ambient heat 

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EnTEC – Study on Energy Storage 

352 ktoe) in 2030 to 955 TWh (82 144 ktoe) in 2030. The main driver of this increase is the deploy-
ment of heat pumps, as especially the heat final demand from CHP and district heating is overall 
the same.   

The foreseen increase in renewable and waste heat and cool in a context of full net decarbonisation 
of the EU energy system will be coupled with increased thermal storage needs. Heat storage needs 
are expected to grow by 4-10 times by 2050 according to the Heat Roadmap Europe 4 study, 
depending on the scenario, as shown in Figure 50.346 

Figure 50 

Heat storage needs in the Heat Roadmap 4 scenarios 

Thermal energy storage can contribute to the EU energy system in multiple ways 

The contributions of thermal energy storage are varied and present in various steps of the energy 
value  chain.  Therefore,  there  is  no  single  accepted  classification  of  the  different  contributions. 
Nonetheless, main contributions include: 

  TES facilitates the integration of (variable) renewable electricity for heating and cooling: 
storage allows to decouple the renewable electricity supply from electricity-based heating and 
cooling end-uses. Due to differences in the generation profile of renewable electricity supply 
and the demand profile of heat and cool end-uses, storage (of some sort) is necessary. While 
electricity (and renewable/low-carbon gas) storage is an alternative, thermal energy storage is 
often the cheapest alternative as shown in chapter 1; 

  TES also facilitates the integration of renewable thermal energy, again by allowing to de-
couple the renewable thermal energy production profile from demand. The residual thermal 
energy  demand  would  otherwise  have  to  be  met  through  other  energy  sources,  potentially 
fossil fuel based. 

  TES reduces the need for electricity generation capacity to meet peak heating/cooling 
demand, by shifting electricity demand to periods with abundant RES-based supply. By provid-
ing appropriate incentives to electricity consumers, such as time-differentiated network tariffs 
and wholesale market based commodity prices for end-users, along with other measures, con-
sumers (or prosumers) can be incentivised to install and operate TES in a manner that reduces 
the electricity peak generation capacity needed; 

346  Heat Roadmap Europe 4 (2018) HRE4 summary tables and figures. https://heatroadmap.eu/roadmaps/ 

156 

0100020003000400050006000Baseline 2015Baseline 2050ConventionalDecarbonisation 2050Heat Roadmap Europe2050GWhSEROPLNLITHUFRFIESDECZBEAT 
 
                                                   
EnTEC – Study on Energy Storage 

  TES enables the utilisation and trade of waste heat, thus increasing the overall energy system 
efficiency. There is a significant untapped waste heat potential in the EU (which is usually the 
cheapest form of heat). For example, the EU industrial waste heat production would be enough 
to meet the total building space heating demand – but waste heat sources are often distant 
from urban centres.347 This includes waste heat from industry, but also more diffuse and lower-
temperature heat sources such as from data centres, tunnels and metro stations, as well as from 
building cooling systems, and waste heat from thermal power plants and power-to-gas pro-
cesses.348 Waste heat may not be utilised either because of a mismatch between the waste heat 
generation and use profiles, or because the waste heat producer and user are not the same – 
thus requiring transportation and trade of the waste heat. Thermal energy storage allows to 
match the supply and demand profiles, as well as enable the trading of waste heat, which will 
become increasingly important in the EU349 Waste heat can also be used to provide cooling in 
e.g. summer periods through the use of adsorption or absorption chillers350; 

  TES also increases the efficiency of the energy system by allowing the optimal utilisation 
of energy production and conversion assets. This includes enabling not only the operation 
of assets at stable levels (which should increase their efficiency as well as improve their lifetime), 
but in some situations also facilitate the operation of combined-heat-and-power in moments 
where electricity prices are high but heat may not be needed (being thus stored for later use). 
If electricity market prices formation is efficient, this should incentivise CHP operators to oper-
ate in a way that improves the overall system efficiency (which is only possible if the stored heat 
can be employed later on); 

  TES facilitates the provision of ancillary services to the electricity system,  including not 
only balancing services but also other services such as synchronous inertial response (see sec-
tion 4.2). Several TES technologies are being applied for electricity generation using synchro-
nous generators, including concentrated solar power, geothermal power, adiabatic compressed 
air energy storage, and liquid air energy storage.351 

Through these different contributions, TES can not only reduce the costs for operating the EU en-
ergy system, but also lead to significant investment savings, in grid expansion, electricity storage, 
peak electricity generation capacity, and assets to provide system services. TES will also facilitate 
the accelerated deployment of renewable electricity and thermal energy required to  replace the 
use of fossil fuels, especially gas and coal, to meeting heating and cooling demand in the EU, 
thereby reducing greenhouse gases emissions and the EU external energy dependency. Finally, 
thermal energy storage can significantly increase the energy system flexibility, not only by al-
lowing to match supply and demand from the short- to long-term (seasonal) timeframes, but also 
by supporting the electricity system stability and the overall resilience of the energy system. 

There exists a wide variety of thermal energy storage technologies and applications 

TES  applications  have  very  different  temperature  needs.  The  heat  that  could  be  potentially 
stored by TES does not have a unified quality – differing by volume, and most importantly temper-
ature according to the heat sources. Thermal energy storage can be used in various applications, 
including in the cold chain, industry, the power sector, buildings, and district heating and cooling, 

347  Trinomics et al. (2021) Policy Support for Heating and Cooling Decarbonisation - Roadmap 

348  Euroheat and Power (2020) Discussion Paper - The barriers to waste heat recovery and how to overcome them? 

349  Euroheat and Power (2020) Discussion Paper - The barriers to waste heat recovery and how to overcome them? 

350  Euroheat and Power (2020) Discussion Paper - The barriers to waste heat recovery and how to overcome them? 

351  IRENA (2020) Innovation Outlook – Thermal Energy Storage 

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EnTEC – Study on Energy Storage 

whose needs for heat differ significantly, for example between industry and buildings space heating. 
Different thermal storage technologies are also suitable for different temperatures and ap-
plications, as shown in Figure 51. In case of large-scale storage application, locational properties, 
such as geological and hydrogeological conditions also play a significant role.352 As a result, the 
potential  business  cases  and  real-world  applications  have  to  be  developed  specifically  for  each 
concrete situation. Given the diversity of technologies and applications as well as their distributed 
use throughout the EU, a single EU integrated market for heating or cooling does not exist as 
the ones for electricity and gas, nor do comparable associations of market parties (although several 
EU-level associations exist covering different aspects of heating and cooling). 

Figure 51 

TES operating temperatures and storage timeframes353 

Several TES  technologies beyond  the widespread  water  tanks are mature and  even  deployed  at 
large scale, including molten salt storage for CSP, UTES for ground-sourced heat pumps, ATES stor-
age, and TTES or UTES for district heating. However, issues may exist for their further development, 
many of which are specific for each technology or application. 

Recent best practices with TES in the EU and abroad 

This sub-section presents recent best practices with TES in the EU and abroad. It must be noted, 
however, that given the differences across Member States regarding the applications for TES, avail-
able potential (for example in the case of subsurface TES, highly dependent on subsurface potential) 
and existing regulatory framework, best practices in a Member State are often not readily applicable 
elsewhere, and need to be adapted to the local context. 

Description 

Technology 

Application 

Geography 

Long- and short-term TES storage 
for district heating 

Pit and tank TES 

District heating 

Denmark 

352  AEE INTEC (2021). Giga-scale thermal energy storage for renewable districts. Available at: https://www.gigates.at/images/Appendix16_publisha-

ble_report_graphically_designed_EN.pdf 

353  RENA (2020) Innovation Outlook – Thermal Energy Storage 

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EnTEC – Study on Energy Storage 

Large-scale Pit- and Tank-TES applications (with charge/discharge capacity up to several 100 MW) 
are becoming  commercially  viable  for  district  heating applications  in  advanced  markets  such  as 
Denmark, where currently 10 pit and tank TES storages are in operation, all developed since 2017, 
indicating the technology was considered appropriate even before the current high gas prices. An 
online database shows the current status of some of the storages.354 An important contribution of 
TES in district heating lies in seasonal storage, integrating waste heat from industry and abundant 
heat from renewable sources,355 including solar thermal heat and wind and solar PV electricity to 
drive heat pumps. However, in Denmark smaller TES is also used for making use of wind-driven low 
electricity prices to run large heat pumps or electric boilers, with cycles of one week or 4 days. 

In Denmark, heat pumps and electric boilers are used in a complementary way. Heat pumps are 
CAPEX-intensive but efficient due to their coefficient of performance (COP) , while boilers have low 
CAPEX but also lower efficiency. Moreover, the efficiency of heat pumps decreases with tempera-
tures, meaning that other peaking technologies are needed to meet peak heat demand in winter. 
Currently, the peak  demand  is  often  covered  by  gas  boilers but  also (renewable-driven)  electric 
boilers. Moreover, Danish district heating operators also make use of gas-driven CHP, meaning they 
can be indifferent to electricity prices – in periods of high prices (driven by natural gas prices) they 
operate the CHP plants, while during periods of low electricity prices they employ the heat pumps 
– all enabled by TES. TES can be useful even in the case of biomass-fired CHP for district heating, 
as although biomass itself can be stored (with no or much lower losses than heat), TES still allows 
operators to operate during periods of high electricity prices and store the heat for later use. Cur-
rently, the use of heat pumps and TES for district heating is already the cheaper alternative com-
pared  to  the  use  of  natural  gas  for  district  heating  or  residential  heat  pumps  (although  further 
research would be needed to ascertain if sufficient renewable electricity will be available). 

To incentivise the deployment of heat pumps, the Danish government has reduced the excise tax 
for  electricity  used  to  power  heat  pumps356,  and  introduced  a  support  scheme  for  large  heat 
pumps.357 Moreover, the government has reduced taxes on excess heat for own use or trade, as 
well as reduced the reporting requirements.358 

Description 

Technology 

Application 

Geography 

Development of new and retrofit-
ted TES-equipped solar thermal 
electricity 

Molten salts 

Solar Thermal 
Electricity 

Spain 

There is a significant potential to retrofit existing CSP installations with thermal storage. “Currently, 
around half of CSP installations worldwide do not have any storage capability, especially in Spain 
and the United States”. Retrofitting existing CSP in Spain is recognised as an important measure to 
facilitate the deployment of renewable energy, especially given there is limited electricity grid ca-
pacity to connect new renewable energy projects.359  

354  Varmelagre.dk 

355  AEE INTEC (2021). Giga-scale thermal energy storage for renewable districts. Available at: https://www.gigates.at/images/Appendix16_publisha-

ble_report_graphically_designed_EN.pdf 

356  https://ec.europa.eu/energy/sites/default/files/dk_ca_2020_en.pdf 

357  https://solarthermalworld.org/news/denmark-large-heat-pumps-take-dh-market-storm/ 

358  https://www.emb3rs.eu/danish-parliament-cuts-taxes-on-excess-heat/ 

359  https://www.iea.org/articles/how-rapidly-will-the-global-electricity-storage-market-grow-by-2026 

159 

 
 
                                                   
EnTEC – Study on Energy Storage 

However, the existing CSP plants were developed under past feed-in tariff support schemes which 
do not expose the plants to market prices and thus do not incentivise the retrofits. Moreover, the 
possibility of retrofitting the plants was not foreseen and is thus not possible without changes to 
the contracts.360 

The Spanish government has announced a new renewable energy tender focused on biomass and 
CSP361, currently foreseen to take place in December 2022. The tender is proposed to require CSP 
to have a capacity for 6 hours of storage, and will allow hybridisation with solar PV, biomass or 
biogas. 

Description 

Technology 

Application 

Geography 

Reduction of winter peak electric-
ity demand for water heating 

Water Tank TES 

Domestic water 
heating 

France 

By  a  more flexible  utilisation  of domestic  water  heaters,  it  was possible  already  around  2011  to 
reduce winter electricity demand peaks by 5% in France362. This demand peak reduction was ena-
bled by introducing dedicated tariff structures (for peak and off-peak hours) and also by introduc-
ing remote  start/stop controls  that  allow grid operators to control the operation of these water 
heaters. 

Description 

Technology 

Application 

Geography 

Aquifer TES for building heating 
and cooling and other uses 

ATES 

Building H/C, 
other 

Netherlands 

The Netherlands is a leader on ATES, with over 3000 ATES systems,363 making up the large majority 
of  all  systems  installed  worldwide  –  in  2018,  the  Netherlands  had  85%  of  the  projects  installed 
worldwide.  The  Netherlands  Enterprise  Agency  maintains  a  website  providing  interested  parties 
with information about the technology, including on requirements to install the system and links 
to sectoral associations and a GIS database indicating among others where it is allowed to install 
ATES systems and providing a calculator to size the system and estimate the payback time.364 ATES 
can also be used for other purposes – such as in the case of Stockholm’s Arlanda airport, where 
ATES provides heat and cool to e.g. melt snow on runways.365 

Description 

Technology 

Application 

Geography 

Creation of databases and meth-
odologies for estimating waste 
heat potential 

Various 

Waste heat utilisa-
tion 

Various 

Euroheat and Power366 provides an overview of existing databases developed in the past years to 
map  the  waste  heat  potential  in  different  Member  States  and  regions,  including  in  Germany, 

360  Interview with CSP operator representatives 

361  https://www.miteco.gob.es/es/prensa/ultimas-noticias/el-miteco-lanza-la-tercera-subasta-de-renovables-con-500-mw-para-solar-

termoel%C3%A9ctrica-biomasa-fotovoltaica-distribuida-y-otras-tecnolog%C3%ADas/tcm:30-534735 

362  IEA (2014) Technology roadmap: Energy storage. Page 24. Available at: https://iea.blob.core.windows.net/assets/80b629ee-597b-4f79-a236-

3b9a36aedbe7/TechnologyRoadmapEnergystorage.pdf 

363  https://iea-es.org/wp-content/uploads/public/Netherlands_Country_Report_2021.pdf 

364  https://www.rvo.nl/onderwerpen/technieken%2C-beheer-en-innovatie-gebouwen/warmte-en-koudeopslags 

365  IRENA (2020) Innovation Outlook – Thermal Energy Storage 

366  Euroheat and Power (2020) Discussion Paper - The barriers to waste heat recovery and how to overcome them? 

160 

 
 
 
 
                                                   
EnTEC – Study on Energy Storage 

Czechia, and France. Moreover, it identifies initiatives related to the definition and application of 
methodologies for estimating waste heat potential, which is relevant specially to map the potential 
from low and medium temperature heat sources. 

161 

 
 
 
EnTEC – Study on Energy Storage 

4.8 

Permitting barriers and best practices367 

Complex and lengthy permitting procedures are considered an important barrier for large-
scale energy storage projects. Our interviews with pumped hydro developers in Austria and Ger-
many indicated that permitting regulation is still very complex and that the procedures are costly 
and time consuming. The length of permitting procedures ranges from 1 to 7+ years with several 
examples of permitting procedures of 4+ years, with the risk of projects being abandoned due to 
long permitting times. Also in the case of front-of-the-meter battery storage, permitting is consid-
ered an important barrier in some Member States, including Ireland and the Netherlands.368 In the 
Netherlands, permitting is delegated to municipalities without any national guidelines, which cre-
ates an incoherent approach throughout the country. 

The  consulted  experts369  indicated  that  streamlining  and  digitalisation  permitting  proce-
dures  while  setting  clear  time  limits  would  be  helpful  in  addressing  the  barrier.  Currently, 
several documents have to be delivered on paper (e.g. in Germany) and timelines and procedures 
for permitting are not always clear (e.g. in Italy) and are lengthy with multiple administrations in-
volved (e.g. in Spain). Furthermore, interviewees indicated that better knowledge and application 
of the ecological points system in the Water Framework Directive by regional authorities would be 
useful. 

The adjustments to the Renewable Energy Directive to accelerate permitting for renewables 
that are proposed in the context of REPowerEU address the issues of permitting, in part also 
for storage projects.  The REPowerEU plan  aims to “rapidly  reduce the dependence on  Russian 
fossil fuels and fast forward the green transition”.370 Part of this plan is to accelerate the rollout of 
renewables, by tackling slow and complex permitting for renewable energy projects (among oth-
ers). A key feature of this is to recognise renewable energy projects as an ‘overriding public interest’. 
Additionally, Member States are asked to implement maximum deadlines for permit granting, dig-
italise procedures, design ‘one-stop-shops’ for granting permits. Furthermore, shortened and sim-
plified permitting procedures in designated ‘go-to’ areas should be made available as well as reg-
ulatory sandboxes for innovative projects. The recommendation around speeding up permit-grant-
ing procedures for renewable energy projects may in fact (partly) be considered to apply for energy 
storage  projects  too  as  ‘renewable  energy  projects’  are  understood  to  also  include  the  assets 
needed for the grid connection and storage of the energy produced by the renewable production 
plants.371 However, in Germany hydropower (incl. pumped hydro) is thus far explicitly excluded from 
the projects that are considered an ‘‘overriding public interest’. The revised TEN-E regulation also 
contains provisions for facilitating the permitting of Projects of Common Interest (PCIs), on 
priority status for permitting of PCIs, one-stop shops, and limit to the permitting procedure dura-
tion. This should facilitate the permitting of electricity storage projects eligible for PCI status372.  

367  In order to focus on the most relevant points for this study, this analysis is not presented in the same structure as the previous topics. 

368  STEPS (2021). Energy storage - trends and challenges in a rocketing market. 

369  Inputs were gathered through two interviews with pumped hydro operators in Germany and Austria and the validation of the national fiches 

with experts in all EU countries. 

370  https://ec.europa.eu/commission/presscorner/detail/en/IP_22_3131 

371  C(2022) 3219 final. Commission Recommendation on speeding up permit-granting procedures for renewable energy projects and facilitating 

Power Purchase Agreements 

372  A s defined in article 1(c) of Annex II, “energy storage facilities, in individual or aggregated form, used for storing energy on a permanent or 

temporary basis in above-ground or underground infrastructure or geological sites, provided they are directly connected to high-voltage trans-
mission lines and distribution lines designed for a voltage of 110 kV or more. For Member States and small isolated systems with a lower volt-
age overall transmission system, those voltage thresholds are equal to the highest voltage level in their respective electricity systems” 

162 

 
                                                   
EnTEC – Study on Energy Storage 

List of figures 

Figure 1 

Figure 2 

Figure 3 

Figure 4 

Figure 5 

Figure 6 

Storage topics analysed in chapter 4 ....................................................................................... 11 

In-depth assessment of battery technologies for storage service 
applications ........................................................................................................................................ 20 

Power and energy ranges of different storage technologies ......................................... 21 

Capital cost of power and energy for different technologies ........................................ 22 

TRL of energy storage technologies ........................................................................................ 23 

Need for critical raw materials by technology (graph by Fraunhofer ISE) ................ 24 

Figure 7  

Use cases and actors for high-level grouping of storage technologies .................... 25 

Figure 8 

Annual European energy storage market forecast (MWh) .............................................. 26 

Figure 9  

Figure 10  

Figure 11  

Distribution of a) power [MW], b) energy capacity [MWh] and c) number 
of projects by storage technology [-] ...................................................................................... 29 

Distribution of energy storage a) power [MW], b) energy capacity [MWh] 
and c) number of projects by countries [-] (May 2022) .................................................... 30 

Distribution of energy storage a) power, b) energy capacity and c) 
number of projects by country .................................................................................................. 31 

Figure 12 

Three largest projects per technology .................................................................................... 33 

Figure 13 

Figure 14 

Figure 15 

Figure 16 

Figure 17 

Figure 18 

Figure 19 

Figure 20 

Figure 21 

Figure 22 

Overview of revenue indicators for number of (electricity) storage 
technologies ...................................................................................................................................... 52 

Development of average daily price spreads in the day ahead markets 
from 2018 to 2022 in selected countries (EUR/MWh)....................................................... 53 

Development of average daily price spread of indicators in the intraday 
market for selected countries and years (EUR/MWh) ....................................................... 55 

Repartition of the procurement lead time of each type of reserve in 
selected European markets - 2020 (%) ................................................................................... 56 

Repartition of the procurement lead time of each MS, for all types of 
reserve (FCR, aFRR, mFRR, RR) - 2020 (%) ............................................................................. 57 

Annual average price for procured capacity (FCR) from 2019 to 2022 in 
selected countries (EUR/MW/per contract resolution) ..................................................... 58 

Average prices for procured capacity (FCR) over the day from 2020 to 
2022 in Belgium (EUR/MW per one hour) ............................................................................. 59 

Annual average price for procured capacity (aFRR) from 2019 to 2022 in 
selected countries (EUR/MW per hour) .................................................................................. 60 

Average prices for procured capacity (aFRR) over the day from 2020 to 
2022 in Belgium (EUR/MW) ......................................................................................................... 61 

Annual average price for activated balancing energy (aFRR) from 2019 to 
2021 in selected countries (EUR/MWh) .................................................................................. 62 

163 

 
EnTEC – Study on Energy Storage 

Figure 23 

Figure 24 

Figure 25 

Figure 26 

Figure 27 

Annual average price for procured capacity (mFRR) from 2019 to 2022 in 
selected countries (EUR/MW) ..................................................................................................... 63 

Average prices for procured capacity (mFRR) over the day from 2020 to 
2022 in Belgium (EUR/MW per hour) ...................................................................................... 63 

Annual average price for activated balancing energy (mFRR) from 2019 
to 2021 in selected countries (EUR/MWh) ............................................................................. 64 

Development of retail prices from 2019 to 2021 in selected countries 
(EUR/MWh) ........................................................................................................................................ 65 

Average daily price spreads in the day ahead market in selected 
countries for 2030 (EUR/MWh) .................................................................................................. 66 

Figure 28 

Spot market trading using large-scale LIB storage, the case of France ..................... 72 

Figure 29 

Spot market trading using large-scale LIB storage, the case of Germany ................ 74 

Figure 30 

Spot market trading using large-scale LIB storage, the case of Spain ....................... 75 

Figure 31 

Figure 32 

Figure 33 

Figure 34 

Figure 35 

Figure 36 

Provision of capacity to the FCR market using large-scale LIB storage, the 
case of Austria .................................................................................................................................. 76 

Provision of capacity to the FCR market using large-scale LIB storage, the 
case of France ................................................................................................................................... 77 

Savings and gap to business case for residential behind the meter 
storage. The case of France ......................................................................................................... 79 

Savings and gap to business case for residential behind the meter 
storage. The case of Germany .................................................................................................... 80 

Savings and gap to business case for residential behind the meter 
storage. The case of Spain ........................................................................................................... 81 

Influence of storage costs on savings and gap to business case for 
residential behind the meter storage (using a 2.5 kWh storage system) 
for Germany ....................................................................................................................................... 82 

Figure 37 

Specified storage technology as part of the respondents‘ energy storage 
technology, project or portfolio ................................................................................................ 84 

Figure 38 

Location(s) of respondents‘ technology, project or portfolio ........................................ 85 

Figure 39 

Categorisation of energy storage services used in the survey ...................................... 86 

Figure 40 

Services provided by technology, project or portfolio ..................................................... 87 

Figure 41 

Share of revenue by service group and by technology in the present ...................... 89 

Figure 42 

Comparison of revenue breakdown: present and 2030 ................................................... 90 

Figure 43 

Figure 44 

Most important market or regulatory barriers for the deployment of 
energy storage options ................................................................................................................. 91 

Expected best locations for investing in energy storage, from the 
perspective of a private investor according to the respondents .................................. 92 

Figure 45  

Overview of generic ancillary services according to EU-SysFlex ................................ 112 

Figure 46 

Capacity map of the Dutch electricity grid as of 14/04/2022 (injection) ................ 117 

164 

 
EnTEC – Study on Energy Storage 

Figure 47  

Technical scarcities‘ forecast for 2030 in 3 European synchronous 
systems of the EU-SysFlex project ......................................................................................... 121 

Figure 48  

US electricity markets ................................................................................................................. 122 

Figure 49  

Storage Temporal Matching Use Case Schematic ........................................................... 154 

Figure 50 

Heat storage needs in the Heat Roadmap 4 scenarios ................................................. 156 

Figure 51 

TES operating temperatures and storage timeframes ................................................... 158 

Figure 52 

Perspective of the respondent when providing information on the 
current situation ............................................................................................................................ 209 

Figure 53 

Affiliation of respondents .......................................................................................................... 209 

Figure 54 

Share of revenue by service group and by technology in 2030 ................................. 210 

Figure 55 

Change in the share of revenue by service group between present and 
2030 ................................................................................................................................................... 211 

Figure 56 

Share of revenue from various services in the present .................................................. 212 

Figure 57 

Share of revenue from various services for 2030 ............................................................. 212 

Figure 58 

Figure 59 

Figure 60 

Figure 61 

Figure 62 

Share of revenue from services using only chemical technologies in the 
present .............................................................................................................................................. 213 

Share of revenue from services using only mechanical technologies in 
the present ...................................................................................................................................... 213 

Share of revenue from services using only electrochemical technologies 
in the present ................................................................................................................................. 214 

Share of revenue from services using only thermal technologies in the 
present .............................................................................................................................................. 214 

Share of revenue from services using a mix of technologies in the 
present .............................................................................................................................................. 215 

165 

 
EnTEC – Study on Energy Storage 

List of tables 

Table 1 

Table 2 

Table 3 

Table 4 

Table 5 

Table 6 

Table 7 

Table 8 

Table 9 

High level grouping of energy storage technologies with data of end  
2021 ...................................................................................................................................................... 18 

High level grouping of energy storage technologies with data of end 
2021 ...................................................................................................................................................... 19 

Key technical characteristics for services provided by energy storage 
technologies ...................................................................................................................................... 24 

Three largest projects per power per technology .............................................................. 33 

Cost of DSM through sector coupling technologies ......................................................... 39 

Technical parameters of DSM through sector coupling .................................................. 40 

Cost of DSM through industrial load management in the potential 
sectors (based on survey data from 2012/13) ...................................................................... 44 

Technical requirements of DSM through industrial load management ..................... 45 

Cost of DSM through households with smart electricity use ......................................... 47 

Table 10 

Technical parameters of DSM households with smart electricity use ......................... 48 

Table 11 

Comparison of flexibility options .............................................................................................. 50 

Table 12 

Arbitrage trading parameter assumptions ............................................................................ 70 

Table 13 

Potential income from arbitrage trading for France Average spreads and 
potential income from arbitrage trading using historical day-ahead 
market prices for France ............................................................................................................... 71 

Table 14 

Potential income from arbitrage trading for Germany ..................................................... 73 

Table 15 

Potential income from arbitrage trading for Spain - Average spreads and 
potential income from arbitrage trading using historical day-ahead 
market prices for Spain ................................................................................................................. 74 

Table 16 

Behind-the-meter self-consumption parameter assumptions ...................................... 78 

Table 17 

Table 18 

Table 19 

Behind-the-meter residential storage in France - Potential savings and 
gap to business case for residential behind-the-meter storage 
technologies. The case of France .............................................................................................. 79 

Behind-the-meter residential storage in Germany - Potential savings and 
gap to business case for residential behind-the-meter storage 
technologies. The case of Germany ......................................................................................... 80 

Behind-the-meter residential storage in Spain - Potential savings and 
gap to business case for residential behind-the-meter storage 
technologies. The case of Spain ................................................................................................ 81 

Table 20 

Energy storage goals and targets in EU Member States.................................................. 99 

Table 21 

CPUC domains and reliability/non-reliability services of storage ............................. 124 

Table 22  

New frequency response services introduced by National Grid ESO ...................... 126 

166 

 
EnTEC – Study on Energy Storage 

Table 23 

Applicability of transmission tariffs for relevant network user groups .................... 138 

Table 24 

Applicability of distribution tariffs for relevant network user groups ...................... 141 

167 

 
EnTEC – Study on Energy Storage 

A.1 

Annex 2.1 Energy Storage Database and Use Case Matrix 

The relevant Excel file is available here.  

168 

 
EnTEC – Study on Energy Storage 

A.2 

Annex 3.1 Market Indicators Dashboard 

The relevant Excel file is available here.  

169 

 
EnTEC – Study on Energy Storage 

A.3 

Annex 3.2 Survey Results 

A.3.1 

EnTEC Energy Storage questionnaire 

Survey Details 

Survey Description 

Thank you for participating in this questionnaire, which should only take 
approximately 15 minutes of your time. This questionnaire is conducted 
by the the Energy Transition Expertise Center (EnTEC), a think tank col-
laboration of TNO, Trinomics and Fraunhofer, on behalf of the Direc-
torate-General for Energy of the European Commission. The aim of this 
questionnaire is to provide valuable input on: 
Current and future uses of energy storage. 
Current and future revenue streams for energy storage. 
Discrepancies between whole-system and private benefits of storage. 
Barriers and drivers for energy storage in the UK 
The responses to this questionnaire will be compiled into a report for the 
European Commission, helping to inform its energy storage strategy. Alt-
hough energy storage technology is advancing rapidly, high-quality evi-
dence on the current and projected future revenue streams for a wide 
range of energy storage technologies is scarce. Nevertheless, this evi-
dence is urgently needed to help the Commission formulate a strategy 
that can help the energy storage industry achieve its full potential in the 
energy transition. With this questionnaire, we aim to take a first step in 
closing this gap.  
Responses to this questionnaire are collected anonymously. You will not 
be asked for your name, company name, or any other personal details. 
Your anonymous responses will be stored securely by TNO, in compli-
ance with Dutch and EU data protection regulation (see our privacy 
statement for more information). If you have any questions or concerns, 
now or after completing the questionnaire, please contact Dr Joris 
Koornneef (joris.koornneef@tno.nl) and/or Dr Harry van der Weijde 
(harry.vanderweijde@tno.nl).  

Date of export 

5/17/2022 5:16 PM 

Number of Ques-
tions and Content 
Elements 

Survey Language 

Admin Link of this 
survey 

41 

English 

https://tno.survalyzer-eu.app/workspace/10768/survey/3489/build 

170 

 
 
EnTEC – Study on Energy Storage 

Anonymous Link 

https://survey.tno.nl/bfkgpahqfd?l=en 

Response Rate  Invited 

324 

100% 

Not responded 

In Progress 

Completed 

Screenout 

QuotaFull 

Hard Bounces 

Soft Bounces 

6
5
4
3
2
1
0

Response Rate per 
Day 

0 

289 

35 

0 

0 

0 

0 

0 % 

89 % 

11 % 

0 % 

0 % 

0 % 

0 % 

2
2
0
2
/
5
2
/
3

2
2
0
2
/
9
2
/
3

2
2
0
2
/
0
3
/
3

2
2
0
2
/
1
/
4

2
2
0
2
/
4
/
4

2
2
0
2
/
5
/
4

2
2
0
2
/
6
/
4

2
2
0
2
/
7
/
4

2
2
0
2
/
8
/
4

2
2
0
2
/
1
1
/
4

2
2
0
2
/
3
1
/
4

2
2
0
2
/
4
1
/
4

2
2
0
2
/
1
2
/
4

2
2
0
2
/
2
2
/
4

2
2
0
2
/
5
2
/
4

2
2
0
2
/
6
2
/
4

2
2
0
2
/
7
2
/
4

2
2
0
2
/
9
2
/
4

2
2
0
2
/
3
1
/
5

Rate per Day

Applied Filter 

No filter applied to this report 

171 

 
 
 
EnTEC – Study on Energy Storage 

Your affiliation - Please indicate your type of affiliation. 

Responses: 93 / Missings: 231 

40%

25%

45%

40%

35%

30%

25%

20%

15%

10%

5%

0%

Answer option 

Energy storage operator 

Utility company 

Project developer 

Equipment manufacturer 

Technology provider 

Network operator 

Consultant 

Other, please specify: 

Research institute 

Number of answers 

Number of N/A 

Number of missings 

15%

14%

12%

10%

8%

6%

2%

in % 

40% 

25% 

15% 

14% 

12% 

10% 

8% 

6% 

2% 

Absolute 

37 

23 

14 

13 

11 

9 

7 

6 

2 

93 

0 

231 

Answers

172 

 
 
 
 
 
 
 
 
EnTEC – Study on Energy Storage 

Other, please specify: 

Number of Responses: 6 

Values 

Branch organisation 

EnTec: unclear answer 

EnTec: unclear answer 

National Association 

Energy storage technology association 

Service Supplier of mobile BESS Battery Energy Storage Systems 

173 

 
 
EnTEC – Study on Energy Storage 

Please indicate from which perspective you are filling in this section 

Responses: 70 / Missings: 254 

3%

11%

For a specific energy storage
technology.

24%

50%

11%

For a specific energy storage
project.

For an energy storage portfolio.
The portfolio can include multiple
projects and multiple technologies

Answer option 

For a specific energy storage technology. 

For a specific energy storage project. 

For an energy storage portfolio. The portfolio can include multiple projects 
and multiple technologies 

Other, please specify:  

I cannot answer any questions about current energy storage technologies; 
please take me directly to the questions about future storage technologies. 

Mean 

Number of answers 

Number of N/A 

Number of missings 

Other, please specify:  

Number of Responses: 2 

Values 

Absolute  in 
% 

50% 

11% 

24% 

3% 

11% 

35 

8 

17 

2 

8 

2.1 

70 

0 

254 

Implementation so far politically not supported though ready for demonstration  

Service provider of Mobile BESS Battery Energy Storage Systems 

174 

 
 
 
 
 
 
 
 
 
 
 
 
 
EnTEC – Study on Energy Storage 

Please specify the technology or technologies. 

Responses: 62 / Missings: 262 

Electrochemical - Classic batteries

Chemical - Hydrogen

40%

34%

Mechanical - Pumped Hydro

16%

Thermal - Sensible Heat

Electrochemical - Flow batteries

11%

10%

Thermal - Latent Heat

8%

Chemical - Power to Methanol/Gasoline

Chemical - Power to Methane

Mechanical - Adiabatic Compressed Air

Chemical - Power to Ammonia

Mechanical - Liquid Air

Mechanical - Diabatic Compressed Air

Thermal - Thermochemical

Other, please specify:

Mechanical - Flywheels

Electrochemical - Hybrid Supercapacitors

Electrical - Supercapacitors

Electrochemical - Electrochemical
Recuperator

Electrical - Superconducting Magnetic
Energy Storage

6%

6%

5%

5%

3%

3%

2%

2%

2%

2%

2%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

175 

Answers

 
 
EnTEC – Study on Energy Storage 

Answer option 

Electrochemical - Classic batteries 

Chemical - Hydrogen 

Mechanical - Pumped Hydro 

Thermal - Sensible Heat 

Electrochemical - Flow batteries 

Thermal - Latent Heat 

Chemical - Power to Methanol/Gasoline 

Chemical - Power to Methane 

Mechanical - Adiabatic Compressed Air 

Chemical - Power to Ammonia 

Mechanical - Liquid Air 

Mechanical - Diabatic Compressed Air 

Thermal - Thermochemical 

Other, please specify:  

Mechanical - Flywheels 

Electrochemical - Hybrid Supercapacitors 

Electrical - Supercapacitors 

Electrochemical - Electrochemical Recuperator 

Electrical - Superconducting Magnetic Energy Storage 

Number of answers 

Number of N/A 

Number of missings 

Other, please specify:  

Number of Responses: 4 

Values 

pumped hydro storage 

Thermal Hot Water Storage 

Pit Pond Storage 

Absolute 

25 

21 

10 

7 

6 

5 

4 

4 

3 

3 

2 

2 

1 

1 

1 

1 

1 

0 

0 

62 

0 

262 

in % 

40% 

34% 

16% 

11% 

10% 

8% 

6% 

6% 

5% 

5% 

3% 

3% 

2% 

2% 

2% 

2% 

2% 

0% 

0% 

Methane Pyrolysis-Carbon Microwave-Watergas Methane-Synthesis from HFC-Water effluent 
regenerative Green Hydrogen  

176 

 
 
 
 
 
 
EnTEC – Study on Energy Storage 

Please specify the location(s) of your chosen technology, project or portfolio. 

Responses: 62 / Missings: 262 

39%

19%

18%

18%

16%

16%

16%

Answers

Germany

Spain

Netherlands

France

United Kingdom

Denmark

Belgium

Portugal

Ireland

Austria

Italy

Sweden

Greece

Czech Republic

Slovakia

Poland

Norway

Hungary

Switzerland

Slovenia

Romania

Other, please specify:

Lithuania

Finland

Cyprus

Malta

Luxembourg

Liechtenstein

Latvia

Iceland

Estonia

Croatia

Bulgaria

11%

11%

11%

10%

8%

8%

8%

6%

6%

6%

6%

5%

5%

5%

5%

5%

5%

5%

3%

3%

3%

3%

3%

3%

3%

3%

0%

5%

10% 15% 20% 25% 30% 35% 40% 45%

Answer option 

Absolute 

Germany 

Spain 

Netherlands 

24 

12 

11 

177 

in % 

39% 

19% 

18% 

 
 
 
EnTEC – Study on Energy Storage 

Answer option 

France 

United Kingdom 

Denmark 

Belgium 

Portugal 

Ireland 

Austria 

Italy 

Sweden 

Greece 

Czech Republic 

Slovakia 

Poland 

Norway 

Hungary 

Switzerland 

Slovenia 

Romania 

Other, please specify: 

Lithuania 

Finland 

Cyprus 

Malta 

Luxembourg 

Liechtenstein 

Latvia 

Iceland 

Estonia 

Croatia 

Bulgaria 

Number of answers 

Number of N/A 

Number of missings 

Other, please specify:  

Number of Responses: 3 

Values 

Global 

Turkey 

Wherever not rejected 

Absolute 

in % 

18% 

16% 

16% 

16% 

11% 

11% 

11% 

10% 

8% 

8% 

8% 

6% 

6% 

6% 

6% 

5% 

5% 

5% 

5% 

5% 

5% 

5% 

3% 

3% 

3% 

3% 

3% 

3% 

3% 

3% 

11 

10 

10 

10 

7 

7 

7 

6 

5 

5 

5 

4 

4 

4 

4 

3 

3 

3 

3 

3 

3 

3 

2 

2 

2 

2 

2 

2 

2 

2 

62 

0 

262 

178 

 
 
 
 
 
 
 
 
 
 
EnTEC – Study on Energy Storage 

Which category of product/service does your technology, project or portfolio provide? 

Responses: 51 / Missings: 273 

Generation Support Services and Bulk
Storage Services

63%

Ancillary Services

49%

Services to Support Transmission
Infrastructure

Services to Support Distribution
Infrastructure

Services to Support Behind the Meter
Customer Energy Management

35%

27%

25%

Other, namely:

6%

0%

10% 20% 30% 40% 50% 60% 70%

Answer option 

Absolute 

Generation Support Services and Bulk Storage Services 

Ancillary Services 

Services to Support Transmission Infrastructure 

Services to Support Distribution Infrastructure  

Services to Support Behind the Meter Customer Energy 
Management  

Other, namely:  

Number of answers 

Number of N/A 

Number of missings 

Other, namely:  

Number of Responses: 3 

Values 

portable electronic devices 

32 

25 

18 

14 

13 

3 

51 

0 

273 

Answers

in % 

63% 

49% 

35% 

27% 

25% 

6% 

on going candidature for local congestion management for French TSO RTE. Remuneration ba-
sed on investment deferral. 

saasf 

179 

 
 
 
 
 
 
 
 
 
 
 
EnTEC – Study on Energy Storage 

Please indicate the approximate share of the total revenue by category of prod-
uct/service provided. 

Responses: 38 / Missings: 286 

Generation Support Services and Bulk Storage Services 

Number of Responses: 25 

53,6

0,

10,

20,

30,

40,

50,

60,

% of total revenue

Generation Support Services and Bulk 
Storage Services 

Minimum 
value 

% of total revenue 

Number of answers 

0 

25 

Mean 

Median  Maximum 

53.6 

50 

value 

100 

180 

 
 
 
 
 
 
 
 
EnTEC – Study on Energy Storage 

Services to Support Transmission Infrastructure 

Number of Responses: 16 

15,3

0,

2,

4,

6,

8,

10,

12,

14,

16,

18,

% of total revenue

Services to Support Transmission In-
frastructure 

Minimum 
value 

Mean 

Median 

Maximum 
value 

% of total revenue 

Number of answers 

0 

16 

15.3 

8 

100 

Services to Support Distribution Infrastructure  

Number of Responses: 12 

26,7

0,

5,

10,

15,

20,

25,

30,

% of total revenue

181 

 
 
 
 
 
 
 
 
EnTEC – Study on Energy Storage 

Services to Support Distribution In-
frastructure  

Minimum 
value 

% of total revenue 

Number of answers 

0 

12 

Mean 

Median  Maximum 

26.7 

18 

value 

80 

Services to Support Behind the Meter Customer Energy Management  

Number of Responses: 14 

40,4

0,

5,

10,

15,

20,

25,

30,

35,

40,

45,

% of total revenue

Services to Support Behind the Meter Cus-
tomer Energy Management  

Minimum 
value 

Mean  Median  Maximum 

value 

100 

% of total revenue 

Number of answers 

0 

14 

40.4 

35 

182 

 
 
 
 
 
 
 
 
 
 
 
 
 
EnTEC – Study on Energy Storage 

Ancillary Services 

Number of Responses: 23 

45,7

0,

5,

10,

15,

20,

25,

30,

35,

40,

45,

50,

% of total revenue

Ancillary Services 

% of total revenue 

Number of answers 

Other 

Number of Responses: 9 

Minimum value 

Mean  Median 

Maximum value 

0 

23 

45.7 

50 

100 

31,

0,

5,

10,

15,

20,

25,

30,

35,

% of total revenue

183 

 
 
 
 
 
 
 
 
EnTEC – Study on Energy Storage 

Other 

Minimum value 

Mean  Median 

Maximum value 

% of total revenue 

Number of answers 

1 

9 

31 

10 

100 

Which Generation Support Services and Bulk Storage Services does your tech-
nology, project or portfolio supply? 

Responses: 30 / Missings: 294 

Arbitrage

73%

RES Curtailment Minimisation

53%

Ancillary Services RES Support

System Electric Supply Capacity

Seasonal Arbitrage

Capacity Firming

47%

43%

40%

40%

Support to Conventional Generation

33%

Other, namely:

7%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Answer option 

Arbitrage 

RES Curtailment Minimisation 

Ancillary Services RES Support 

System Electric Supply Capacity 

Seasonal Arbitrage 

Capacity Firming 

Support to Conventional Generation 

Other, namely:  

Number of answers 

Number of N/A 

Number of missings 

Absolute 

22 

16 

14 

13 

12 

12 

10 

2 

30 

0 

294 

Answers

in % 

73% 

53% 

47% 

43% 

40% 

40% 

33% 

7% 

184 

 
 
 
 
 
 
 
 
 
 
 
 
EnTEC – Study on Energy Storage 

Other, namely:  

Number of Responses: 3 

Values 

weekly arbitrage  

back up or firming of intermitent eletrolyser production 

Supporting renewable generation 

Which Services to Support Transmission Infrastructure does your technology, 
project or portfolio supply? 

Responses: 15 / Missings: 309 

Reactive Power Compensation

60%

Transmission Support

Cross Sectoral Storage

Contingency Grid Support

Transmission Grid Upgrade Deferral

Power Oscillation Damping (POD)

Participation to Angular Stability

Other, namely:

40%

40%

40%

33%

33%

33%

0%

10% 20% 30% 40% 50% 60% 70%

Answer option 

Reactive Power Compensation 

Transmission Support 

Cross Sectoral Storage 

Contingency Grid Support 

Transmission Grid Upgrade Deferral 

Power Oscillation Damping (POD) 

Participation to Angular Stability 

Other, namely:  

Number of answers 

Number of N/A 

Number of missings 

185 

Absolute 

9 

6 

6 

6 

5 

5 

5 

0 

15 

0 

309 

Answers

in % 

60% 

40% 

40% 

40% 

33% 

33% 

33% 

0% 

 
 
 
 
 
 
 
 
EnTEC – Study on Energy Storage 

Other, namely:  

Number of Responses: 1 

Values 

0 

Which Services to Support Distribution Infrastructure does your technology, 
project or portfolio supply? 

Responses: 12 / Missings: 312 

Contingency Grid Support

Reactive Power Compensation

Dynamic Local Voltage Control

Distribution Grid Upgrade Deferral

67%

58%

50%

42%

Answers

Intentional Islanding

33%

Cross Sectoral Storage

25%

Other, namely:

8%

0%

10% 20% 30% 40% 50% 60% 70%

in % 

67% 

58% 

50% 

42% 

33% 

25% 

8% 

Absolute 

8 

7 

6 

5 

4 

3 

1 

12 

0 

312 

Answer option 

Contingency Grid Support 

Reactive Power Compensation 

Dynamic Local Voltage Control 

Distribution Grid Upgrade Deferral 

Intentional Islanding 

Cross Sectoral Storage 

Other, namely:  

Number of answers 

Number of N/A 

Number of missings 

Other, namely:  

Number of Responses: 1 

Values 

Distributed energy communities 

186 

 
 
 
 
 
 
 
 
 
EnTEC – Study on Energy Storage 

Which Services to Support Behind the Meter Customer Energy Management 
does your technology, project or portfolio supply? 

Responses: 12 / Missings: 312 

End-User Peak Shaving

Continuity of Energy Supply

Time-of-Use Energy Cost Management

Maximising Self-Production & Self-
Consumption of Electricity

Electric Vehicle Integration

Particular Requirements in Power Quality

Compensation of Reactive Power

Limitation of Upstream Disturbances

25%

Other, namely:

83%

83%

67%

67%

58%

Answers

42%

42%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Absolute 

in % 

83% 

83% 

67% 

67% 

58% 

42% 

42% 

25% 

0% 

10 

10 

8 

8 

7 

5 

5 

3 

0 

12 

0 

312 

Answer option 

End-User Peak Shaving 

Continuity of Energy Supply 

Time-of-Use Energy Cost Management 

Maximising Self-Production & Self-Consumption of Electricity 

Electric Vehicle Integration 

Particular Requirements in Power Quality 

Compensation of Reactive Power 

Limitation of Upstream Disturbances 

Other, namely:  

Number of answers 

Number of N/A 

Number of missings 

Other, namely:  

Number of Responses: 0 
Values 

187 

 
 
 
 
 
 
 
 
 
EnTEC – Study on Energy Storage 

Which Ancillary Services does your technology, project or portfolio supply? 

Responses: 24 / Missings: 300 

Frequency Containment Reserve (FCR),…

Automatic Frequency Restoration Reserve…

Voltage support

Manual Frequency Restoration Reserve…

Black Start

New Ancillary Services (EFR, SIR, SI, DRR,…

Replacement Reserve (RR), prev. “Tertiary …

Frequency stability of weak grids

79%

67%

54%

54%

46%

42%

38%

33%

Answers

Load Following

25%

Other, namely:

8%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Answer option 

Absolute 

in % 

Frequency Containment Reserve (FCR), prev. "Primary Reserve" 

Automatic Frequency Restoration Reserve (aFFR), prev. "Secondary Reserve 

Voltage support  

Manual Frequency Restoration Reserve (mFRR)  

Black Start 

New Ancillary Services (EFR, SIR, SI, DRR, FFR, FPAPR, RM, etc.)  

Replacement Reserve (RR), prev. “Tertiary Reserve”  

Frequency stability of weak grids  

Load Following  

Other, namely:  

Number of answers 

Number of N/A 

Number of missings 

Other, namely:  

Number of Responses: 2 

Values 

Safety 

79% 

67% 

54% 

54% 

46% 

42% 

38% 

33% 

25% 

8% 

19 

16 

13 

13 

11 

10 

9 

8 

6 

2 

24 

0 

300 

network restoration, islanded grigs 

You have indicated that some of the revenues of your technology, project or 
portfolio are related to products and/or services in the 'Other' category, not 

188 

 
 
 
 
 
 
 
EnTEC – Study on Energy Storage 

captured by any of the other categories. Which products and/or services are 
this? 

Responses: 2 / Missings: 322 

Values 

Batteries and supercapacitors dedicated to portable electronic devices. 

on going candidature for local congestion management for French TSO RTE. Remuneration ba-
sed on investment deferral.  

Is there any service or social benefit that you believe energy storage (or a spe-
cific storage technology) can deliver, but for which there is currently no market 
and/or other incentive in your location? 

Responses: 52 / Missings: 272 

54%

46%

No

Yes, please explain:

Answer option 

No 

Yes, please explain:  

Mean 

Number of answers 

Number of N/A 

Number of missings 

in % 

46% 

54% 

Absolute 

24 

28 

1.5 

52 

0 

272 

189 

 
 
 
 
 
 
 
 
 
EnTEC – Study on Energy Storage 

Yes, please explain:  

Number of Responses: 28 

Values 

Increase of renewable energy resources in the European grip.  Storage can buffer fluctuations. 

Long duration storage is the solution to keep the grid balanced with a higher REN penetration. This is a unique value proposi-
tion which bring economic and social benefits. 

Conversion technologies between different energy infrastructure such as electricity, thermal and gas 

The benefits of ES are widely understood, and include facilitating the increase in intermittent renewable generation, peak 
shaving and times shifting. Gravity energy storage is a particular case, with advantages including fast response, high round 
trip efficiency and locational flexibility. Unlike chemical batteries, there is no degradation in perforamnce over time, a very 
long lifetime of 25 years +, no mining of rare raw materials or high end of life costs.  

Services of storage in system operation and system resilience, especially around virtual inertia, grid-following capability of 
storage 

1) Grid upgrade deferrals - redistribution of potential savings to incentivise the most optimal development storage vs. grid 
upgrades 2) Support curtailment compensation to drive incentives for avoiding renewable energy curtailment 3) Contingency 
grid support 4) Revenue stability of ancillary services  

No remuneration for reactive power compensation, grid restoration, system inertia, flexibility capacity  

Referring to Cyprus - Market and grid regulations still under development  

Storing green electricity by converting it into hydrogen is the only way so far to keep climate-neutral energy available in very 
large capacity over long periods of time. Establishing this technology is essential for the success of the energy transition and 
would combine climate protection and security of supply. Unfortunately, market readiness is still a long way off for various 
economic, political and regulatory reasons. 

The local energy storage is not valorised for end user 

Flood adjustment 

Excluding the markets where not all storage technologies are allowed to offer all the services (energy, adequacy and ancillary 
services), in all markets a specific incentive mechanism measuring the CO2 avoided for displacement of thermal generation is 
lacking. 

Current utility suppliers do not like energy democratisation by distributed energy communities 

The advantage of low noise with the use of BESS. Using storage will avoid breaking up the environment for renewal of the grid 

Benefits for future hydrogen market 

We can avoid outages and shortages of the electricity grid 

SoS 

SOS 

Decentralised generation and lower cost for distribution of electricity 

Continuous supply of renewable energy for many hours of the year 

SOS 

Ability of storage assets to avoid over-investments in other infrastructure elements, across the entire energy sector, to ensure 
the hydrogen demand can be met in a secure and efficient way. 

Security of Supply, Avoidance against Dunkelflaute, Emission Reduction (currently not directly compensated) 

Currently, there is no H2 market in the region. 

Balancing of fluctuationg renewable energy production 

Yes, VRFB sustainability! VRFB are best in class compared to other storage tech. Please see various independent LCA's. EOL 
costs are low. >95% re-usable! 

Off grid and micro grids 

Support to conventional generation. Transmission investment deferral. RES curtailment minimisation. Additional support to 
RES, i.e. enhanced business case for new RES to ensure adequate build-out.  

190 

 
 
EnTEC – Study on Energy Storage 

Please indicate from which perspective you are filling in the questionnaire for 
the year 2030. This may, but need not, be the same as the perspective you used 
when answering the questions above.  

Responses: 44 / Missings: 280 

7%

For a specific energy storage
technology.

For a specific energy storage
project.

For an energy storage portfolio.
The portfolio can include multiple
projects and multiple technologies

Other, please specify:

32%

50%

11%

Answer option 

For a specific energy storage technology. 

For a specific energy storage project. 

For an energy storage portfolio. The portfolio can include multiple 
projects and multiple technologies 

Other, please specify:  

Mean 

Number of answers 

Number of N/A 

Number of missings 

Other, please specify:  

Number of Responses: 3 

Values 

market 

in % 

50% 

11% 

32% 

7% 

Absolute 

22 

5 

14 

3 

2 

44 

0 

280 

For a game-change in energy infrastructure and its use 

Mobile BESS. In combination with Mobile Generators on alternative non fossil fuels —> hydro-
gen, methanol, biomethane etc. 

191 

 
 
 
 
 
 
 
 
 
 
43%

39%

Answers

EnTEC – Study on Energy Storage 

Please specify the technology or technologies. 

Responses: 44 / Missings: 280 

Electrochemical - Classic batteries

Chemical - Hydrogen

Mechanical - Pumped Hydro

Thermal - Sensible Heat

Other, please specify:

16%

14%

14%

Electrochemical - Flow batteries

11%

7%

7%

5%

5%

5%

2%

2%

2%

2%

2%

Thermal - Latent Heat

Chemical - Power to Methane

Mechanical - Diabatic Compressed Air

Mechanical - Adiabatic Compressed Air

Chemical - Power to Methanol/Gasoline

Thermal - Thermochemical

Mechanical - Liquid Air

Electrochemical - Hybrid Supercapacitors

Electrical - Supercapacitors

Chemical - Power to Ammonia

Mechanical - Flywheels

Electrochemical - Electrochemical
Recuperator

Electrical - Superconducting Magnetic
Energy Storage

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Answer option 

Electrochemical - Classic batteries 

Chemical - Hydrogen 

Absolute 

19 

17 

in % 

43% 

39% 

192 

 
 
 
in % 

16% 

14% 

14% 

11% 

7% 

7% 

5% 

5% 

5% 

2% 

2% 

2% 

2% 

2% 

0% 

0% 

0% 

Absolute 

7 

6 

6 

5 

3 

3 

2 

2 

2 

1 

1 

1 

1 

1 

0 

0 

0 

44 

0 

280 

EnTEC – Study on Energy Storage 

Answer option 

Mechanical - Pumped Hydro 

Thermal - Sensible Heat 

Other, please specify: 

Electrochemical - Flow batteries 

Thermal - Latent Heat 

Chemical - Power to Methane 

Mechanical - Diabatic Compressed Air 

Mechanical - Adiabatic Compressed Air 

Chemical - Power to Methanol/Gasoline 

Thermal - Thermochemical 

Mechanical - Liquid Air 

Electrochemical - Hybrid Supercapacitors 

Electrical - Supercapacitors 

Chemical - Power to Ammonia 

Mechanical - Flywheels 

Electrochemical - Electrochemical Recuperator 

Electrical - Superconducting Magnetic Energy Storage 

Number of answers 

Number of N/A 

Number of missings 

Other, please specify:  

Number of Responses: 8 

Values 

Mechanical - gravity.  

hydro pumped storage 

Compressed CO2 

Thermal Hot Water Storage 

Pit Pond storage 

all 

See answers above: Methane Pyrolysis-Carbon Microwave-Watergas Methane-Synthesis from 
HFC-Water effluent regenerative Green Hydrogen  

Geothermal power 

193 

 
 
 
 
 
EnTEC – Study on Energy Storage 

Please give your best estimate of the location(s) of your chosen technology, 
project or portfolio in 2030. 

Responses: 44 / Missings: 280 

Germany

Spain

United Kingdom

France

Netherlands

Denmark

Belgium

Switzerland

Portugal

Italy

Sweden

Poland

Austria

Finland

Czech Republic

Slovakia

Romania

Norway

Ireland

Hungary

Greece

Estonia

Luxembourg

Lithuania

Latvia

Cyprus

Slovenia

Other, please specify:

Liechtenstein

Bulgaria

Malta

Iceland

Croatia

50%

32%

27%

27%

25%

25%

23%

20%

20%

20%

18%

18%

18%

16%

16%

14%

14%

14%

14%

14%

14%

14%

11%

11%

11%

11%

9%

9%

9%

9%

7%

7%

7%

0%

10%

20%

30%

40%

50%

60%

194 

Answers

 
 
EnTEC – Study on Energy Storage 

Answer option 

Germany 

Spain 

United Kingdom 

France 

Netherlands 

Denmark 

Belgium 

Switzerland 

Portugal 

Italy 

Sweden 

Poland 

Austria 

Finland 

Czech Republic 

Slovakia 

Romania 

Norway 

Ireland 

Hungary 

Greece 

Estonia 

Luxembourg 

Lithuania 

Latvia 

Cyprus 

Slovenia 

Other, please specify: 

Liechtenstein 

Bulgaria 

Malta 

Iceland 

Croatia 

Number of answers 

Number of N/A 

Number of missings 

Absolute 

in % 

50% 

32% 

27% 

27% 

25% 

25% 

23% 

20% 

20% 

20% 

18% 

18% 

18% 

16% 

16% 

14% 

14% 

14% 

14% 

14% 

14% 

14% 

11% 

11% 

11% 

11% 

9% 

9% 

9% 

9% 

7% 

7% 

7% 

22 

14 

12 

12 

11 

11 

10 

9 

9 

9 

8 

8 

8 

7 

7 

6 

6 

6 

6 

6 

6 

6 

5 

5 

5 

5 

4 

4 

4 

4 

3 

3 

3 

44 

0 

280 

Other, please specify:  

Number of Responses: 4 

Values 

Global 

Turkey 

EU 

Please see answers above 

195 

 
 
 
 
 
 
 
 
 
 
EnTEC – Study on Energy Storage 

For your technology, project or portfolio, please indicate your assessment of 
the share of the total revenue by category of product/service provided in 2030. 

Responses: 33 / Missings: 291 

Generation Support Services and Bulk Storage Services 

Number of Responses: 23 

52,4

0,

10,

20,

30,

40,

50,

60,

% of total revenue

Generation Support Services and 
Bulk Storage Services 

Minimum 
value 

% of total revenue 

Number of answers 

5 

23 

Mean 

Median  Maximum 

52.4 

50 

value 

100 

196 

 
 
 
 
 
 
 
EnTEC – Study on Energy Storage 

Services to Support Transmission Infrastructure 

Number of Responses: 12 

15,1

0,

2,

4,

6,

8,

10,

12,

14,

16,

% of total revenue

Services to Support Transmission Infra-
structure 

Minimum 
value 

% of total revenue 

Number of answers 

1 

12 

Mean 

Median  Maximum 

15.1 

18 

value 

30 

Services to Support Distribution Infrastructure  

Number of Responses: 12 

26,3

0,

5,

10,

15,

20,

25,

30,

% of total revenue

197 

 
 
 
 
 
 
 
 
EnTEC – Study on Energy Storage 

Services to Support Distribution Infra-
structure 

Minimum 
value 

% of total revenue 

Number of answers 

5 

12 

Mean 

Median  Maximum 

26.3 

18 

value 

80 

Services to Support Behind the Meter Customer Energy Management  

Number of Responses: 13 

30,4

0,

5,

10,

15,

20,

25,

30,

35,

% of total revenue

Services to Support Behind the Meter Cus-
tomer Energy Management 

Minimum 
value 

Mean  Median  Maximum 

value 

100 

% of total revenue 

Number of answers 

5 

13 

30.4 

20 

198 

 
 
 
 
 
 
 
 
 
 
 
EnTEC – Study on Energy Storage 

Ancillary Services 

Number of Responses: 21 

37,3

0,

5,

10,

15,

20,

25,

30,

35,

40,

% of total revenue

Ancillary Services 

Minimum value 

Mean  Median 

Maximum value 

% of total revenue 

Number of answers 

5 

21 

37.3 

40 

100 

Other 

Number of Responses: 7 

46,4

0,

5,

10,

15,

20,

25,

30,

35,

40,

45,

50,

% of total revenue

199 

 
 
 
 
 
 
 
EnTEC – Study on Energy Storage 

Other 

Minimum value 

Mean  Median 

Maximum value 

% of total revenue 

Number of answers 

5 

7 

46.4 

20 

100 

How certain are you that the revenue streams ranked above will result in the 
technology/service/portfolio being profitable in 2030? 

Responses: 43 / Missings: 281 

16%

12%

16%

40%

16%

Not confident at all

Slightly confident

Somewhat confident

Quite confident

Extremely confident

Answer option 

Not confident at all 

Slightly confident 

Somewhat confident 

Quite confident 

Extremely confident 

Mean 

Number of answers 

Number of N/A 

Number of missings 

in % 

12% 

16% 

16% 

40% 

16% 

Absolute 

5 

7 

7 

17 

7 

3.3 

43 

0 

281 

200 

 
 
 
 
 
 
 
 
 
 
 
 
 
EnTEC – Study on Energy Storage 

What level of market growth do you expect for each group of energy storage 
technologies by 2030 in the EU? 

Responses: 42 / Missings: 282 

Mechanical

2%

31%

26%

10%

5%

26%

Electrochemical

10%

19%

26%

29%

17%

Chemical

14%

24%

19%

19%

24%

Thermal

19%

33%

19%

5%

24%

Electrical

2%

19%

21%

12%

14%

31%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

No or negative growth

Low growth

Moderate growth

High growth

Very high growth

Don't know

  No or ne-
gative 
growth 

Answer option  Absolute 

Mechanical 

Electrochemical 

Chemical 

Thermal 

Electrical 

1 

0 

0 

0 

1 

in 
% 

2% 

0% 

0% 

0% 

2% 

Low 
growth 

Moderate 
growth 

High 
growth 

Very high 
growth 

Don't 
know 

Absolute 

in %  Absolute 

in %  Absolute 

in %  Absolute 

in %  Absolute 

in % 

13  31% 

4  10% 

6  14% 

8  19% 

8  19% 

11  26% 

8  19% 

10  24% 

14  33% 

9  21% 

4  10% 

11  26% 

8  19% 

8  19% 

5  12% 

2 

5% 

12  29% 

8  19% 

2 

5% 

6  14% 

11  26% 

7  17% 

10  24% 

10  24% 

13  31% 

  Mean 

Count 

Not applicable 

Missings 

Mechanical 

Electrochemical 

Chemical 

Thermal 

Electrical 

3.6 

4.2 

4.1 

3.8 

4.1 

42 

42 

42 

42 

42 

0 

0 

0 

0 

0 

282 

282 

282 

282 

282 

201 

 
 
 
 
 
 
 
EnTEC – Study on Energy Storage 

Which country or countries are currently the best locations for investing in en-
ergy storage, from the perspective of a private investor? 

Responses: 42 / Missings: 282 

50%

45%

29%

21%

19%

19%

17%

17%

17%

17%

14%

14%

10%

10%

7%

7%

7%

5%

5%

5%

2%

2%

2%

2%

2%

Answers

Germany

United Kingdom

Netherlands

Spain

Italy

Ireland

Other (incl. outside Europe), please specify:

Denmark

Belgium

Austria

Sweden

Portugal

France

Finland

Switzerland

Slovakia

Norway

Poland

Greece

Cyprus

Malta

Luxembourg

Liechtenstein

Iceland

Czech Republic

Slovenia

Romania

Lithuania

Latvia

Hungary

Estonia

Croatia

Bulgaria

0%

10% 20% 30% 40% 50% 60%

202 

 
 
EnTEC – Study on Energy Storage 

Answer option 

Germany 

United Kingdom 

Netherlands 

Spain 

Italy 

Ireland 

Other (incl. outside Europe), please specify: 

Denmark 

Belgium 

Austria 

Sweden 

Portugal 

France 

Finland 

Switzerland 

Slovakia 

Norway 

Poland 

Greece 

Cyprus 

Malta 

Luxembourg 

Liechtenstein 

Iceland 

Czech Republic 

Slovenia 

Romania 

Lithuania 

Latvia 

Hungary 

Estonia 

Croatia 

Bulgaria 

Number of answers 

Number of N/A 

Number of missings 

Absolute 

in % 

50% 

45% 

29% 

21% 

19% 

19% 

17% 

17% 

17% 

17% 

14% 

14% 

10% 

10% 

7% 

7% 

7% 

5% 

5% 

5% 

2% 

2% 

2% 

2% 

2% 

0% 

0% 

0% 

0% 

0% 

0% 

0% 

0% 

21 

19 

12 

9 

8 

8 

7 

7 

7 

7 

6 

6 

4 

4 

3 

3 

3 

2 

2 

2 

1 

1 

1 

1 

1 

0 

0 

0 

0 

0 

0 

0 

0 

42 

0 

282 

Other (incl. outside Europe), please specify:  

Number of Responses: 7 

Values 

Every market needs storage solutions 

do not know 

Non UE countries and non interconnected areas, outermost regions 

eu 

Anywhere where there is openness for the necessary game-change, unlikely Europe 

Ukraine 

Ucraine 

203 

 
 
 
 
 
 
 
EnTEC – Study on Energy Storage 

If you would like to, please explain your answer to the previous question. 

Responses: 11 / Missings: 313 

Values 

these  countries have highly developed business model for BESS 

The need linked to the grid (weak or with high congestion) and the actual localisation of Renew-
ables and Industrial consumption 

Largely based on current ancillary services revenues  

Clear guidance on the value of energy storage and supportive environment from government 
and regulators is activating private/investor capital into those market.  

Our answer is based on current profitability and a view on the future RES integration needs driv-
ing an expectation of future profitability. 

Italy and Spain seem to have potential needs for battery storage but the current market frame-
work is not really favourable. 

More favourable support mechanisms for PHS outside europe today  

By moving away from nuclear energy and coal, Germany must invest in renewable energies. 

We have been sabotaged since 12 years and refused from Lighthouse project applications to 
not evidence our TRL, likely to be detrimental for subsidising renowned big name clients. 

Ukraine is considered to be one of the most promising nations for large-scale and high-volume 
hydrogen production on the mainland of Europe: the land areas, as well as the solar, wind and 
biogas potential are enormous. In addition, Ukraine also has sufficient water resources. 
Also of central importance is the fact that Ukraine, as a neighboring country to the EU, has ac-
cess to inter-border gas infrastructure. 

I would perfer countrys with lower bureaucracy and lower lobby of engergy provider compared 
to Germany - there I expect more innovations (e.g. time based energy price, community energy 
share etc.). 

204 

 
 
 
EnTEC – Study on Energy Storage 

In your opinion, what are currently the three most important market or regula-
tory barriers for the deployment of energy storage options in the European Un-
ion?  

Responses: 41 / Missings: 283 

Insufficient incentives to long-term energy…

Absence of long-term policy signals / strategy

52

43

30

26

Lack of a regulatory framework for local…

Double taxation / grid charging issues

Bankability and perceived risk

Lack of / inappropriate certification /…

Absent / inadequate standardization &…

Other

Non-balancing ancillary services…

Discriminatory network planning and…

14

13

13

11

11

10

Technical limitations

5

Absent / incomplete data provision by…

Wholesale market access / price formation…

Insufficient incentives to behind-the-meter…

3

2

1

Answers

If you used "Other" in the previous question, please specify here.  

0

10

20

30

40

50

60

Responses: 5 / Missings: 319 

Values 

cost of raw material of BESS still to high to make projects less profitable 

connection rules issues and market access rules for batteries are still under construction in 
Member States.  

lack of adequate national support mechanisms for long-lived assets ( approximately 75 years life 
duration for PHS)  

commercial 

Conflicting interests of powerful industry stakeholders  

205 

 
 
 
EnTEC – Study on Energy Storage 

If you would like to, please explain your ranking of the most important market 
or regulatory barriers. 

Responses: 3 / Missings: 321 

Values 

Ploicy Signal about the long-term value of storage, such as a European storage target would kick-start storage adoption in 
many market around Europe.  

- PHES have long planning horizon, thus are in need for a stable framework. This is not given in Germany due to biased focus 
on "new" technologies. Furthermore, storage regulation in Germany does not provide a level playing field, as seen in existing 
PHES planning and permitting procedures. 
- There is no proper definition of energy storages in Germany, thus storages have to pay end user levies, from which they may 
or may not be excluded by specific regulations. There are a lot of cross references in energy law, which makes it hard to follow 
and insecure for further planning/permitting. 

Prioritisation of a maximisation of the most expensive solution for consumers and furthest away from Natural principles - 
power to Gas based CO2 resurrection previously squandered most lavishly instead of taking Carbon and Water into terrestri-
ally closed loops 

In your opinion, which, if any, additional policies or other mechanisms are 
needed at the national or EU level to support energy storage?  

Responses: 23 / Missings: 301 

Values 

Refering to the NextGenerationEU plan(recovery plan), we think there should also be a sepcific plan or fund to support the 
grid infrastructure considering the boosting of green transition, so as to tackle the energy crisis which had just got worsen by 
the Russian-Ukraine war. and within the plan, these measure should be taken to better activate the market of energy storage: 
1. countries need to set higher rebate rate for pv-storage/standalone projects to boost deployment of systems. 
2. introducing low-interest financing plan for new investers based on EU level policies. 
3. allow energy storage to function as independent power plant and participating in all ancillary service, as well as allow reve-
nue stacking.  
4. publish mandatory obligation for new buildings or factories to couple with energy storage for better damand side control. 

We need a clear target and a common plan how to achieve it. 

all possible energy storage technologies are needed to be included in general frame work rather than prioritising based on 
other agendas. 

Policies ensuring greater certainty of revenues into the future  

Provision of stronger guidance on storage policy and elimination of barriers. At the moment, many rules, e.g. about double-
taxxation of energy storage are not being adopted in member states.  

Long term energy storage provides several benefits to more than one party at the same time (Generators, TSO, DSO, Govern-
ments), however most of these values are not recognised to a vialble degree in the market. An economic incentive could be a 
potential way forward, however  rewards for provision of inertia, reliability of green energy supply and flexibility would give 
very good signals and incentives to the energy storage owner or investor. 

Rather than the definition of additional policies or mechanisms dedicated to storage, first of all a full enforcement of the CEP 
provisions are required meaning removing the remaining barriers to all kind of national and EU markets. If necessary, addi-
tional policies and mechanisms should be technology neutral and competition based. 

NO price regulation - market based price formation and fluctuation would be best for the developmetn of storages  

In a world where energy generation will be dependent on fluctuating sources such as solar and wind, greater importance 
should be attached to climate-neutral energy storage in general, which can be expressed, for example, in start-up funding or 
other incentives to achieve technology maturity and thus market entry. 

reducing financal risks for long-term (> 30 years) investments in pumped hydro 

- Energy storage definition and exclusion of end user levy payments 
- level playing field for all technologies (we need them all to some extent) 
- pragmatic planning/permitting procedures 

In general, apart from capacity auctions for resource adequacy in some EU markets, long term remuneration mechanisms spe-
cifically designed for energy storage are missing.  

Tokenise recovered Carbon valorised by its re-use (as crude oil substitute) and prohibit linear water consummation for energy 
purposes 

define a clear incentive framework  
make sure that infrastructure plans include storage aspects 

More homogenous and standardised rules within the EU territory. 

206 

 
 
EnTEC – Study on Energy Storage 

Values 

Chemial Storage Solutions (i.e. Li-Ion Batteries) should be seen as "Neutral" in perspective of beeing "Consumer/Generator". 
As an extrem it could be seen as a "wire", which has just a few losses - but with the abillity to act decisively as generator or 
load (w/o consuming!!).  
We need to over-comer thinking in the old electrical scheme and open to broaden the view and accept losses fo rold incum-
bants. 

For a sustainable and secure energy supply, it would be important that GOs (Guarantees of origin ) are no longer balanced 
over the year but on an hourly basis. This will give storage facilities a very important role. 

1) substantial political, financial and economic EU support is currently needed (especially more funding for R&D of H2 tech-
nologies and scale up of TRL as well as for market and infrastructure development), 2) to facilitate the creation of a competi-
tive hydrogen market in the EU a European framework for the certification (certificates of origin) and transport of green hy-
drogen must be implemented 3) certificates of origin from third countries must be eligible for customers in the EU (e.g. from 
Ukraine) 

Standardisation (including gas quality standards) and more flexible permitting procedures. Financial support of modernisation 
of existing infrastructure. 

Level playing field 

energy storage systems supporting the stable energy supply; an asset that need to be considered as an own category for safe 
energy supply; it is wether a source nor a consumer; it is bidirectionl dynamic assest in the power grid system; supporting con-
sumer, supporting the grid, supporting the energy market; we need more profitable business modes to accelerate to become 
a decentral und decarbonised energy system in the broad range 

Improved, streamlined permitting procedures & processes to allow timely assessmwent of permitting applications. 
Improved GoO rules for clear identification of green electricity & hydrogen product as a % of total production.  

Financial guarantees as infrastructure projects, like storage, will need to be developed prior to the maturation of a renewable 
energy market 

207 

 
EnTEC – Study on Energy Storage 

Do you have any other comments you would like to share? 

Responses: 9 / Missings: 315 

Values 

no, thanks a lot for your side of effort. 

Wholesale Energy and ancillary services markets should be standardised and unified 
Policies for virtual behind the meter set up for co-located assets where the transmission grid 
(f.ex offshore export cable) is not owned by the same party. 
Prioritisation to storage and CO2 free technologies for provision of services 
Ad-hoc regulation for reliability of supply from green energy sources 
Regulation that recognize and re-distribute the benefits and cost savings related to storage 
technologies (Grid expansions deferral) 
Regulation that recognize and incentivized the provision of inertia from CO2 free/storage tech-
nologies 

Carbon circular economy can fully refinance itself within the cost spent on waste remedial and 
saves Carbon replenishing cost of 2.5bbl crude oil per squandered Tonne of CO2 

We too often forget about flexibility needs in planning future energy system, le'ts not forget en-
ergy storage this time. 

We need to act speedly and coherent to realize 100% Rewable Energy (PV, Wind, Hydro) in 
shortest time possible < 2035 across Europe. Let's assume a single massive failure in any Nu-
clear Power Station in Europe - what would happen ? Just a following on national nuclear plants 
plan's ?  
Or let's assume two consecutive years with extreme low water in major rivers, like: Rhone, Rhein, 
Donau, etc. With shutdown's of power stations alongside europe wide. 
Just black painting ? No, just statistic &/or climate crisis. 
We need to act now ! No further delays allowed. 

Uniform regulations and market rules in a market are essential. Currently, there are still different 
regulations (e.g. PCR) in the countries although there is a common market.  

It would be helpfull if there would exist some knowledge sharing among the operators.  

no 

the future is a european decentral energy grid with energy cells very locally cobined to bigger 
energy cells overlayed by an intercountry power grid; storage will be the key enabler 

--end of survey -- 

A.3.2  Annex 3.2 Survey Results in Graphics 

As part of this study an online survey was conducted on behalf of the EnTEC consortium. The aim 
of this survey was to provide complementary input on: 

  Current and future uses of energy storage; 
  Current and future revenue streams for energy storage; 
  Barriers, opportunities and drivers for energy storage. 

Detailed graphs are presented in this appendix supporting section 3.5. A full list of all questions 
and results is available as separate deliverable.  

208 

 
 
EnTEC – Study on Energy Storage 

Figure 52 

Perspective of the respondent when providing information on the current 
situation 

11%

3%

24%

11%

For a specific energy storage technology.

For a specific energy storage project.

For an energy storage portfolio. The portfolio can
include multiple projects and multiple technologies

50%

Other, please specify:

I cannot answer any questions about current
energy storage technologies; please take me
directly to the questions about future storage
technologies.

Source: ENTEC analysis 

Figure 53 

Affiliation of respondents 

15%

14%

12%

10%

8%

6%

2%

40%

25%

45%
40%
35%
30%
25%
20%
15%
10%
5%
0%

Source: ENTEC analysis 

209 

 
 
 
 
EnTEC – Study on Energy Storage 

Figure 54 

Share of revenue by service group and by technology in 2030 

Technology 
group 

Chemical 
Mechanical 
Electrochemical 
Thermal 
Mix 

Genera-
tion Sup-
port Ser-
vices and 
Bulk Stor-
age Ser-
vices 

49% 
33% 
41% 
7% 
32% 

Services to 
Support 
Transmission 
Infrastruc-
ture 

Services to 
Support Dis-
tribution In-
frastructure 

Ancil-
lary 
Services 

Any 
other 
ser-
vice 

Services to 
Support Be-
hind the 
Meter Cus-
tomer En-
ergy Man-
agement   

5% 
10% 
6% 
7% 
3% 

10% 
20% 
6% 
23% 
4% 

7% 
2% 
8% 
53% 
11% 

4% 
35% 
39% 
8% 
35% 

24% 
0% 
0% 
2% 
15% 

Note: this analysis follows the definitions and descriptions of service segmentation provided by EASE373 
Source: ENTEC analysis 

373  https://ease-storage.eu/energy-storage/applications/ 

210 

 
                                                   
EnTEC – Study on Energy Storage 

Figure 55 

Change in the share of revenue by service group between present and 2030 

100

)

%

(
E
U
N
E
V
N
E
R
F
O
E
R
A
H
S
N

I
E
G
N
A
H
C

0

-100

d
n
a

s
e
c
i
v
r
e
S
t
r
o
p
p
u
S
n
o
i
t
a
r
e
n
e
G

s
e
c
i
v
r
e
S
e
g
a
r
o
t
S

l

k
u
B

n
o
i
s
s
i

m
s
n
a
r
T

t
r
o
p
p
u
S
o
t

s
e
c
i
v
r
e
S

e
r
u
t
c
u
r
t
s
a
r
f
n

I

e
r
u
t
c
u
r
t
s
a
r
f
n

I

n
o
i
t
u
b
i
r
t
s
i
D

t
r
o
p
p
u
S

-
s
u
C
r
e
t
e
M
e
h
t
d
n
h
e
B
t
r
o
p
p
u
S

i

t
n
e
m
e
g
a
n
a
M
y
g
r
e
n
E

r
e
m
o
t

s
e
c
i
v
r
e
S

y
r
a

l
l
i
c
n
A

e
c
i
v
r
e
s

r
e
h
t
o
y
n
A

Note: a positive/negative value indicates in growth/decline in revenue expected from providing this service. The red marker indi-
cates average change in revenue for all cases included (n = 26). 
Source: ENTEC analysis 

211 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EnTEC – Study on Energy Storage 

Figure 56 

Share of revenue from various services in the present 

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

s
e
c
i
v
r
e
s

s
u
o
i
r
a
v
m
o
r
f
e
u
n
e
v
e
r

f
o
e
r
a
h
S

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36

Respondent

Any other service

Ancillary Services

Services to Support Behind the Meter Customer Energy Management 

Services to Support Distribution Infrastructure

 Services to Support Transmission Infrastructure

 Generation Support Services and Bulk Storage Services

Source: ENTEC analysis 

Figure 57 

Share of revenue from various services for 2030 

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

s
e
c
i
v
r
e
s

s
u
o
i
r
a
v
m
o
r
f
u
n
e
v
e
r

f
o
e
r
a
h
S

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

Respondent

Any other service

Ancillary Services

Services to Support Behind the Meter Customer Energy Management 

Services to Support Distribution Infrastructure

 Services to Support Transmission Infrastructure

 Generation Support Services and Bulk Storage Services

Source: ENTEC analysis 

212 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
EnTEC – Study on Energy Storage 

Figure 58 

Share of revenue from services using only chemical technologies in the pre-
sent 

100%

80%

60%

40%

20%

0%

s
e
c
i
v
r
e
s

s
u
o
i
r
a
v
m
o
r
f
u
n
e
v
e
r

f
o
e
r
a
h
S

1

2

3

4

5

6

7

8

9

Respondent

Any other service

Ancillary Services

Services to Support Behind the Meter Customer Energy Management 

Services to Support Distribution Infrastructure

 Services to Support Transmission Infrastructure

 Generation Support Services and Bulk Storage Services

Source: ENTEC analysis 

Figure 59 

Share of revenue from services using only mechanical technologies in the 
present 

100%

80%

60%

40%

20%

0%

s
e
c
r
u
o
s

s
u
o
i
r
a
v
m
o
r
f
u
n
e
v
e
r

f
o
e
r
a
h
S

Source: ENTEC analysis 

1

2

3

Respondent

4

5

Any other service

Ancillary Services

Services to Support Behind the Meter Customer Energy Management 

Services to Support Distribution Infrastructure

 Services to Support Transmission Infrastructure

 Generation Support Services and Bulk Storage Services

213 

 
 
 
 
 
 
 
 
 
 
 
 
 
EnTEC – Study on Energy Storage 

Figure 60 

Share of revenue from services using only electrochemical technologies in 
the present 

100%

80%

60%

40%

20%

0%

s
e
c
r
u
o
s

s
u
o
i
r
a
v
m
o
r
f
u
n
e
v
e
r

f
o
e
r
a
h
S

1

2

3

4

5

6

7

8

9

10

11

Respondent

Any other service

Ancillary Services

Services to Support Behind the Meter Customer Energy Management 

Services to Support Distribution Infrastructure

 Services to Support Transmission Infrastructure

 Generation Support Services and Bulk Storage Services

Source: ENTEC analysis 

Figure 61 

Share of revenue from services using only thermal technologies in the pre-
sent 

100%

80%

60%

40%

20%

0%

s
e
c
r
u
o
s

s
u
o
i
r
a
v
m
o
r
f

f
o
e
u
n
e
v
e
r

f
o
e
r
a
h
S

Source: ENTEC analysis 

1

2

3

4

Respondent

Any other service

Ancillary Services

Services to Support Behind the Meter Customer Energy Management 

Services to Support Distribution Infrastructure

 Services to Support Transmission Infrastructure

 Generation Support Services and Bulk Storage Services

214 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
EnTEC – Study on Energy Storage 

Figure 62 

Share of revenue from services using a mix of technologies in the present 

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

s
e
c
r
u
o
s

s
u
o
i
r
a
v
m
o
r
f
u
n
e
v
e
r

f
o
e
r
a
h
S

1

2

3

4

5

6

7

Respondent

Any other service

Ancillary Services

Services to Support Behind the Meter Customer Energy Management 

Services to Support Distribution Infrastructure

 Services to Support Transmission Infrastructure

 Generation Support Services and Bulk Storage Services

Source: ENTEC analysis 

215 

 
 
 
 
 
 
 
 
EnTEC – Study on Energy Storage 

A.4 

Annex 4.1 EnTEC Study on energy storage – Updated na-
tional fiches 

These  files  presented  the  updated  national  fiches  first  developed  in  the  2020  ‘Study  on  Energy 
Storage’. The fiches have been updated with the use of transversal sources (i.e. covering the EU27) 
published since 2020 and then revised by national stakeholders.  

Austria 

Topic 

Austria – Policy description 

1. Public Support 

The NECP version refers to electricity storage 
* small-scale photovoltaic and storage system programme 
* Increase the share of efficient renewable energy sources and district heating/cooling for heating, hot 
water and cooling, including component activation, active use of hot water storage tanks and buildings 
as reservoirs for load balancing and load flexibility 
Investments in storage facilities, including heat storage facilities, rewarding storage facilities for system 
capacity 
* Storage (including hydrogen technologies) is currently addressed as a high priority cross-cutting issue 
with cross-references to the mission-oriented priorities and the broad implementation initiatives 
* Increase of pumped storage capacity in Kaunertal 
* The countries of the Pentalateral Energy Forum address the impact of the implementation of flexibility 
options, including the role of demand response, PTX and hydrogen as well as the role of storage and 
electro-mobility, and analyse specific electricity-related barriers to sector coupling 
* In addition to storage and pumped storage, a particular role is played by high-efficiency combined 
heat and power (CHP) plants, which are necessary to maintain the supply of electricity (for balancing 
purpose) and heat, particularly in agglomerations. 
* Activation of components, the active use of hot water storage tanks and the use of buildings as reser-
voirs for load balancing and load flexibility increase or adapt investments in storage infrastructure (from 
short-term storage to seasonal storage) and transmission and distribution networks to increased de-
mand 
* Digital and smart energy: Ensuring system integration of new energy storage and energy supply sys-
tem flexibility technologies as basic enablers for a high proportion of renewable energy, coupled with 
security and resilience 
* particularly in the interests of the system, to establish as far as possible the control and controllability 
of decentralised small and medium-sized storage units 
* The long-term storage of electricity by hydrogen is to be made possible and encouraged. 
* The 100.000 roofs of photovoltaics and small-scale storage are intended to stimulate the increased use 
of roofs through photovoltaic modules for individuals and economic operators. There will also be im-
plicit guidance to combine photovoltaics and storage by implementing self-supply as a ranking criterion 
for investment support 
* In future, buildings should not only have high energy standards, but above all play an active role in the 
supply of energy and its storage for self-consumption 
* Photovoltaics and small-scale storage: Prolongation of support for a further three years, taking into 
account self-consumption; a total of EUR 108 million in investment support (per year PV:EUR 24 million, 
storage: EUR 12 million) ; production limits for electricity storage is 50 kWh  
* Significant investments in storage infrastructure and transmission and distribution networks, adapted 
to increased needs, will be made 
* Electrochemical energy storage is to be accelerated, as these are large-scale or small-scale storage 
units as a solution to compensate for the demand-driven production characteristics of renewable energy 
(for mobile and stationary applications) 
* As new storage technologies make a vital contribution to the transformation of the energy system, 
their flexibility in the design of network tariffs will be rewarded. Storage facilities should be exempted 
from end-use charges and benefit from support for green electricity 
* The availability of competitive energy storage facilities that can store electricity from renewable energy 
sources on a larger scale and for longer periods of time will be of great importance. Particular attention 
will therefore be given to the promotion of such applied research projects with pilot plants demonstrat-
ing the market maturity of scalable storage technologies 
* Key elements of a new electricity market law: Definition of new actors: Storage facilities, PTX facilities, 
aggregators, … 

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EnTEC – Study on Energy Storage 

Topic 

Austria – Policy description 

2. Permitting 

* Austria already has an important position in storage, which is to be developed and strengthened 
through research and development 
* Technology Roadmap374 – Energy Storage Systems in and from  Austria (2018). 

* Lithium battery storage standards are foreseen in the OVE guideline R20. Although the industry is re-
sponsible for the production, consumer safety is the responsibility of installers. The current standard 
ÖVE EN 50272 covers lead-acid batteries and nickel-cadmium storage. 
* The Electrical Engineering Ordinance sets binding standards for the construction, testing and operation 
of electrical systems. However, storage is not explicitly treated but is arguably within the ordinance 
scope. 
* The transport of batteries is subject to hazardous goods legislation and have to be labelled accord-
ingly (highly flammable), there is no specific legislation for the storage and transport of lithium batteries. 
* In the area of fire protection, the ÖVE guideline R11 must be supplemented with storage in internal 
and external environments. 

3. Energy Markets 
and Capacity 
Mechanisms 

DA/ID Markets: 
* Energy storage is able to participate in DA and ID markets" for all countries 
* Regulatory framework for active consumers to participate in ID & DA was not in place in 2020 (was 
possible only via supplier, not open for independent aggregators in 2020) 

4. Ancillary  
Services and  
Congestion  
Management 

Capacity mechanisms: 
*NA 

* In 2018, the EPEX energy exchange introduced loop block orders, where two block orders are executed 
or rejected together, representing for example the storage cycle. 
* Heat and electricity systems are integrated in several ways, e.g. in co-generation of electricity and heat, 
or when DH is produced with electric boilers or heat pumps. Heat is stored more easily than electricity, 
and thermal storages are used to improve the system balancing of variable power generation. By utilis-
ing co-generation, heat pumps and thermal storages, a DH supplier can respond to price signals on the 
electricity market. In times of high electricity prices, DH production can be adjusted to maximise the 
power generation and thermal storage used to cover heat demand, and in times of excess power, DH 
suppliers can utilise more heat pumps. These large water storage tanks in CHP and district heating will 
increase in the future. 

Balancing market: 
* FCR cooperation project active, allowing for provision of FCR capacity by storage. 
*No other information identified on storage not being eligible to participate in balancing markets 
* Regulatory framework for active consumers to participate in balancing markets was not in place in 
2020 (only via supplier) 
* Design of some products not compliant to Electricity Target Model including: max delivery period of 4 
hours (mFRR:), minimum bid size energy/capacity (aFRR), validity period energy bids (aFRR, mFRR), set-
tlement rules (aFRR, mFRR) 
*min/max price limits are compliant with Electricity Target Model 
* Balancing single pricing, single position is compliant with Electricity Target Model 

* Storage not allowed in 2020 to provide transmission-level voltage control services 

New ancillary services: 
NA 

Mechanisms to value distributed flexibility sources  
NA 

* Pumped hydro participates in the provision of aFRR/mFRR services; 
* Batteries are under the same requirements (such as prequalification) as other units eligible to provide 
services  
* In distribution networks, storage will provide additional services such as voltage control, reactive 
power or used as a phase shifter 

5. Grid Aspects 

* Double charging in 2020 for pumped hydro storage 
* injection & withdrawal charges for distribution grid for storage. PHES units receive a discount on the 
withdrawal charge, called “system utilisation charge” (§ 4 Z 8 SNE-VO 2012 as amended) 

374  https://www.klimafonds.gv.at/wp-content/uploads/sites/6/Technologieroadmap_Energiespeichersysteme2018.pdf 

217 

 
 
 
 
 
 
 
                                                   
EnTEC – Study on Energy Storage 

Topic 

Austria – Policy description 

* The qualification of storage facilities as consumer and producer makes the storage operator a network 
user, who is obligated to pay system usage fees twice (according to SNE-VO 2012 as amended in ac-
cordance with § 51 ff ElWOG 2010) 
* Being considered generators, storage has the following obligations: join a balance group; comply with 
generator technical specifications of the network operators including maximum balance deviation, fault 
tolerance, frequency and voltage control (reactive power capability); pay fees for the provision of pri-
mary balancing power in proportion to their annual production quantities, provided that the generating 
plant has a capacity of over 5 MW; have a metering point; follow data exchange obligations above a cer-
tain size 
* No new grid usage fee or network loss fee is payable for new installations of pumped-storage power 
plants and plants for the conversion of electricity into hydrogen or synthetic natural gas, and for the 
purchase of electrical energy until the end of 2020 (lWOG 2010). 
* Providers of the reserve services (including storage) are exempted from paying grid usage fee 
* (battery) storages can be operated as integrated grid assets for non-frequency ancillary services 
* (battery) storage can be used at integrated grid nodes (Quartierspeicher) and at Energy Communities 
* Market-sourced (battery) storages services can/will be used for congestion management to avoid cur-
tailment of local renewable generation. Alternatively, they must undergo the procedures laid out in Art. 
36/54 of the IEM-Directive 
* no information available that state that NDP is aligned with NECP 
* PHS & other storage facilities (e.g. batteries) are not allowed in network planning process;  
* Published stakeholders’ comments in public consultations 
* Distribution level: no DSO who prepares NDP 

* No information identified on absence of double taxation for energy storage, thus assume it exists 
* Storage operators also pay renewable electricity sources support surcharges, which are paid by the 
end-users connected to the network. 
* Storage operators, with the exception of pumped hydro, pay the surcharges for the promotion of CHP 
systems, which are paid by all end-users connected to the network, according to the CHP Act. 

* There is no general definition of the term 'storage' in the electricity and heat sectors, the definition of 
the Clean Energy Package has not been transposed 
* All electricity traders and other suppliers who supply end customers in Austria are legally obligated to 
inform the end customers of the primary energy sources of the power generation (with proof of origin). 
A special provision is made in the Electricity Labelling Ordinance for those quantities of electricity that 
are delivered by pumped storage power plants (adjusted with an efficiency of 75%) 

* There is no common definition of energy storage in the regulatory framework 
* Development of regional hydraulic-thermal models for overall concepts of groundwater management 
in areas with high degree of utilisation of geothermal fields or groundwater wells as heat storage 
* (battery) storages acknowledged as grid integrated assets for (non-frequency ancillary services) system 
operation 

* A special provision is made in the Electricity Labelling Ordinance for those quantities of electricity that 
are delivered by pumped storage power plants (adjusted with an efficiency of 75%), so the impact of 
storage is considered in the guarantees of origin value chain. 
* Electricity consumption tax for PV has been abolished, according to the recently adopted government 
programme the electricity consumption tax shall be removed for all RES (previously suppliers and con-
sumers had to pay the electricity consumption tax, except for self-produced renewable electricity up to a 
limit of 25 MWh/y, following § 2 of the Electricity Supply Act (Elektrizitätsabgabegesetz)) 

6. Taxes & Levies 

7. Other &  
General 

8. Barriers 

9. Best practices 

218 

 
 
 
EnTEC – Study on Energy Storage 

Belgium 

Topic 

Belgium - Policy description 

1. Public Support 

2. Permitting 

The NECP refers to electricity storage 
* Storage will be one of the solutions in addressing need for flexibility in internal energy market 
* Greater emphasis will be placed on flexibility (including storage and demand management) and inter-
connections to ensure security of supply 
* Different levels of government will ensure the continuous development of new centralised and decen-
tralised storage systems 
* The regions are working on a clear regulatory framework, intended to place storage behind-the-meter 
or at the neighbourhood level  
* Objective to create energy storage potential as means to integrate intermittent, decentralised renewa-
ble energy into the grid 
* Residential, SME, local, electric vehicle storage methods expected to increase further by 2030  
* Legal frameworks revised to different regional contexts to allow prosumers to choose whether gener-
ated energy should be fed back into the grid at peak times, or a battery storage system should be used 
* Clear regulatory framework needed to govern installation of individual home or neighbourhood batter-
ies 
* 2018 National Investment Pact with private sector to foster public-private partnerships within six strate-
gic sectors, including 'the development of storage facilities for heat and electricity' 
* Particular area of focus for research in Wallonia (i.e., energy storage technologies): expertise developed 
in batteries, phase-change materials, compressed air storage, accumulators, hybrid batteries, storage 
management tools 
*In Flanders region, a premium for home batteries was introduced in 2019. This premium is available until 
the end of 2024. 

*According to the law (24 February 2022), not only electricity production facilities but also energy storage 
facilities are subject to the granting of an individual authorisation (according to the law of 29 April 1999 
[electricity law], art. 4). 
For CRM auctions in 2022 and as far as necessary according to the law, an authorisation request must be 
submitted to the federal authority within the 15 days following the publication of the start of an auction 
process at the latest. 
However, energy storage facilities are considered to be authorised as existing facilities and therefore do 
not require to request and be granted an authorisation if 
they have been selected through the 2021 auction and their operators have entered into a capacity con-
tract within the time limits as defined by the CRM functioning rules, or 
the main contracts regarding investment costs, financing cost, operating costs and the proceeds from 
electricity sales, which are necessary for achieving the project, have been concluded prior to 26 February 
2022 (date of entry into force of abovementioned art. 4 of the electricity law). 

3. Energy Markets 
and Capacity 
Mechanisms 

DA/ID markets: 
* Energy storage is able to participate in DA and ID markets 

Capacity mechanism: 
*delivery period is annual 
* CRM allows participation via a pool of assets; value stacking in time is possible; Provision of capacity via 
CRM is expected to be stackable with other services; aims to enable real time control of flexibility trans-
actions to facilitate dynamic pooling 

* Storage facilities in Belgium can participate in the electricity spot and balancing markets, either directly 
(with a minimum bid volume increment of only 0.1 MW), or via aggregators. 
* In 2018, the EPEX energy exchange introduced loop block orders, where two block orders are executed 
or rejected together, representing for example the storage cycle. 
* A new CRM will be implemented in 2020 (law of 22 April 2019); energy storage will be eligible for par-
ticipation, either directly (if concerned capacity > threshold) or indirectly (via aggregation). The introduc-
tion of a CRM could be positive for the development of storage. However, there are no incentives for 
low-carbon emissions flexible units 
* Despite the fact that the concept of storage has been recently defined in the electricity law, the grid 
cost exemption mechanism that is foreseen in the transmission tariffs (and the CREG tariff methodology) 
remains difficult to implement and is more constraining than in neighbouring countries. 
* Storage applications like heat storage (e.g. water as a heat storage medium, powered by cogeneration 
or electrically powered), borehole thermal energy storage (BTES), storage heater (accumulator) are al-
ready implemented in Belgium 

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EnTEC – Study on Energy Storage 

Topic 

Belgium - Policy description 

4. Ancillary Ser-
vices 

Balancing market: 
* FCR cooperation project active, allowing for provision of FCR capacity by storage. 
* Pumped hydro as well as batteries are also eligible to provide aFRR/mFRR services. 
* No other information identified on storage not being eligible to participate in balancing markets  
*max/min price limits not compliant Electricity Target Model but will be adapted when Belgium joins the 
PICASSO and MARI platforms 
* Single pricing, single position compliant with Electricity Target Model 

5. Grid Aspects 

6. Taxes & Levies 

* In 2021, a regulatory framework was created in Flanders that allows a DSO and operator of the local 
transport grid to purchase flexibility services for congestion management and non-frequency ancillary 
services for network operation. Via this framework, a DSO and operator of the local transport grid can 
make a trade-off between, on the one hand, grid investments and, on the other hand, the use of flexibil-
ity as a (temporary) alternative to a grid investment. Batteries are allowed to participate in this system. 

* Pumped hydro as well as batteries are eligible to provide voltage control services. 
* Pumped hydro as well as batteries are eligible to provide black start services subject to their technical 
ability to provide the service. 
* Pumped hydro has historically had an important role in the procurement of ancillary services. 

* Double charging is applicable for end users with an energy storage installation or energy storage instal-
lation that is (directly) connected to the low-voltage and medium-voltage distribution grid that have sep-
arate distribution tariffs for off-take and injection. This has already been addressed for the Brussels re-
gion and should be solved partly for the others with the transposition of Directive (EU) 2019/944 article 
15(5) 
* Exemption mechanism available. Art. 4. of the Electricity Law of 2017: For storage facilities connected to 
transmission or networks with a transmission function, the tariff methodology contains incentives that 
encourage the storage of electricity in a non-discriminatory and proportional manner. A separate tariff 
regime for the storage of electricity may be determined by the CREG (Federal Regulator). The first special 
transmission tariff has been implemented for storage plants commissioned 1) After 1 July 2018: exemp-
tion from network tariffs during first 10 years or 2) before 1 July 2018: can benefit from 80% reduction in 
transmission tariffs for 5 years if they increase both the energy stored volume and capacity by at least 
7.5%.  
* National/regional connection requirements and tariffs contain no specific connection tariffs for storage 
assets. For production and storage facilities with an injection capacity above 1 MW, specific technical 
connection requirements apply 
* For small scale storage connected to DSO grids, no specific grid tariff measures exist 
* Compensation of avoided transmission network losses is under consideration 
* In Flanders, the network tariff structure will change in 2022 and will be both based on kWh-use and kVA 
(peak-use). Peak shaving can provide additional incentives for storage. However, the decreased kWh 
price could worsen the home-battery business case.   
* No information available that state that NDP is aligned with NECP 
* PHS & other storage facilities (e.g. batteries) are not allowed to be included in network development 
plan 
* From the public consultations the stakeholders' comments and responses are published.  
* Each DSO prepares an NDP, data exchanges between TSO/DSO regarding scenario's and/or assump-
tions 

* Since 2022, electricity consumption by storage is exempt from federal taxes. 
* Double taxation for energy storage installation connected to the distribution grid where the energy 
storage is used as an intermediate is the general rule for all storage 
* Investors in energy storage assets are eligible for a federal tax discount; for physical persons the deduc-
tion on the taxable income amounts to 20% of the eligible investment amount, versus 13.5% for compa-
nies. 
* All consumers are obliged to submit regional green certificates (directly linked to the volume con-
sumed). In Wallonia, all storage is exempted with the order of 11/04/2019 (art 10.6°). It was previously 
the case only for pumped hydro located in Wallonia 
* No further exemptions exist for electricity storage with regard to taxes, surcharges and other obliga-
tions imposed on off-take and injections 
* An exemption from the quota obligation for green power and cogeneration certificates is introduced 
for the electricity taken from the grid and re-injected. These measures are taken to encourage stand-
alone grid-connected energy storage facilities. 

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EnTEC – Study on Energy Storage 

Topic 

Belgium - Policy description 

7. Other & Gen-
eral 

* 'Electricity storage' : any process whereby, through the same installation, electricity is withdrawn from 
the grid for the purpose to be completely re-injected into the system later on, subject to efficiency losses. 
(Electricity Law of 13th of July 2017, modifying the 29th of April 1999 Electricity Law) 

*  "electricity storage": a form of energy storage which consists in postponing the final use of electricity 
until a moment later than the moment when the electricity is generated, or converting electrical energy 
into a form of energy that can be stored, such energy on to store and then convert such energy into 
electrical energy or into another energy carrier (Flemish energy decree) 
* The Brussels Capital Region Electricity Ordinance (the Electricity Ordinance as amended by the Ordi-
nance of March 17, 2022) uses the same definition as in the European directive and provides that: 
Art 13bis, § 1: Any active client may engage in one or more of the activities listed below:  
  (...)  
  2° store self-generated electricity on its premises, by means of a storage unit; 
  (...) 

Art. 13bis, § 2: Any active customer with a storage unit  
  1° is connected to the grid within a reasonable period of time in accordance with the conditions laid 
down in the technical regulations 
  2° is allowed to provide several services simultaneously insofar as this is technically possible. 

A ban on the DSO owning, developing, managing or operating storage units, except by derogation 
granted by the Government, after approval by Brugel, for fully integrated components of the grid (articles 
5bis, § 3 and 8, § 7 of the electricity ordinance as amended by the ordinance of 17 March 2022).  

The DSO must systematically install a smart meter when a DSU stores electricity (article 26octies, § 2, par-
agraph 1, 8° of the electricity ordinance as amended by the ordinance of 17 March 2022).  

Energy communities (3 types) can - among other things - store electricity (articles 28ter, § 1, 28quinquies, 
§ 1 and 28septies, § 1 of the Electricity Ordinance as amended by the Ordinance of 17 March 2022). 

8. Barriers 

* The profitability of Belgian pumped hydro was impacted by transmission tariffs (before the recent law 
providing investment incentives) 

9. Best practices 

* 2018 National Investment Pact with private sector to foster public-private partnerships within six strate-
gic sectors, including 'the development of storage facilities for heat and electricity' 
* Notification OR permitting requirement depends on storage capacity 
* CRM design allows the participation of storage directly or through aggregation 
* Regulatory framework explicitly allows the regulator to provide specific tariffs to storage 
* Storage is exempted from some electricity taxes 
* Storage is exempted from the obligation to submit green certificates 

221 

 
 
 
 
 
 
 
 
 
EnTEC – Study on Energy Storage 

Bulgaria 

Topic 

Bulgaria - Policy description 

1. Public Support 

2. Permitting 

The NECP refers to electricity storage: 
* "Increase the electricity and natural gas storage capacity by developing the existing storage facilities 
and by building new storage facilities. Measures supporting the development of energy infrastructure, 
the integration of electricity from renewable sources in the electricity grid and the wider uptake of smart 
energy storage systems will be introduced in the period 2021—2030.” 
The National Recovery and Resilience Plan envisage more ambitious penetration of electricity storage fa-
cilities. According to the NRRP 1,4 GW renewables are planned to be support along with requirement for 
storage facility (investment 6). The storage facility should have a capacity of at least 4 hours and a capac-
ity of at least 30% of the total installed capacity of the RES facility. The total planned resource is EUR 
1026 million (EUR 342 million from the Mechanism for Reconstruction and Sustainability and EUR 684 
mln million private financing with an implementation period of 2022-2026. 
The second initiative regarding storage facilities under NRRP (investment 8) is the RESTORE project. It in-
cludes purchase, installation and commissioning of national infrastructure of electricity storage facilities 
with a total charge capacity of 6000 MWh. The facilities (consisting of batteries, inverters, transformers, 
power electronics / intelligent electronic devices and control automation) will be strategically distributed 
evenly on the territory of the Republic of Bulgaria. The total planned resource is EUR 799mln which will 
be provided by the Mechanism for Recovery and Sustainability with an implementation period of 2022-
2026.” 

* Licensed activities (generation license) are explicitly listed in the Energy Act. Those are for example pro-
duction, trading, distribution, but storage is not addressed. The production license is required for a ca-
pacity above 5 MW, and as legislation does not distinguish between technology types, any production 
above 5 MW must have a license, including e.g. pumped hydro. 
* Licensing reported by stakeholders as a costly and time-consuming process 

3. Energy Markets 
and Capacity 
Mechanisms 

DA/ID markets: 
*Energy storage is able to participate in DA and ID markets 

Capacity mechanisms: 
NA 

* There are various small projects where consumers utilise battery storage technology for domestic pur-
poses, such as reducing the demand charges of large energy users 
* There are currently three operational pumped hydro storage projects in the Republic of Bulgaria. Their 
combined capacity is around 1.4 GW, operated by the National Electricity Company EAD 

4. Ancillary Ser-
vices 

Balancing market: 
*No information identified on storage not being eligible to participate in balancing markets 
*Design of some products not compliant with Electricity Target Model because of minimum bid size en-
ergy/capacity (aFRR & mFRR), validity period, length of balancing capacity contracts, activation rule 

5. Grid Aspects 

* Storage not allowed in 2020 to provide transmission-level voltage control services 

* According to the electricity market rules, pumped hydro shall be considered as dispatchable load when 
in a pump regime 

* No double charging in 2020 for transmission-connected storage 
* no withdrawal charges for distribution grid for storage, only prosumers are charged for withdrawal 
charges 
* There are no specific rules for connection or access charges for storage facilities 
* Consumer network charges are based on energy consumption and capacity to all consumers (house-
holds only pay network charges based on consumption) . The RES pay grid taxes on injected energy, as 
well.  
* All producers network charges are based on energy injected (kWh).  
* The forecast of the 10-year NDP elaborated by ESO for the development of the generation capacities of 
Bulgaria until 2030 is based on the investment intentions expressed by the generation companies. Re-
gardless of the investment intentions of the companies, they have been aligned with the set installed ca-
pacities in the NECP. 
*No information is available about the expected decomissioning of renewable capacities 
* PHS & other energy storage facilities (e.g. batteries) allowed & included in network development plan 
* From the public consultations summary of stakeholders' comments is published 
* No alignment between TSO/DSOs NDPs.  

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Topic 

Bulgaria - Policy description 

6. Taxes & Levies 

* No specific rule identified on exemption, meaning storage charging is subject to the electricity con-
sumption tax 

7. Other & Gen-
eral 

8. Barriers 

* Energy storage is regulated under the Energy Act (of 9 December 2003). But while gas storage is specif-
ically regulated by the Energy Act, the electricity storage is not addressed in the legislative framework. 
Definition of electricity storage and some aspects of electricity storage are stipulated in the provisions of 
Trade Rules 
* NRRP envisages the legislative/regulatory amendments that have to be undertaken in order to remove 
the barriers and introduce specific regulatory and support framework for the construction, connection 
and operation of electricity storage facilities 
Due to a heavy technology accident in the beginning of the year the largest pump-storage hydro power 
plant in the country, also in South East Europe (HPP Chaira installed power in generator mode, MW: 864 
and installed power in pump mode, MW: 772 ), is expected to be out of operation for an year or even 
more 

* There is a large variation between summer and winter as well as daily electricity loads. Heating is pri-
marily based on electricity, and direct use of wood biomass with low penetration of gas for households. 
Services of district heating is available in large Bulgarian cities (15 cities). 
* Multiple regulations need to be adapted, like the Energy Act, market rules, permitting. It is of im-
portance also to introduce clear rules for service procurement, the rules for cost recognition and cost 
coverage of the grid operators in case such services are procured. 

9. Best practices 

* The PCI Bulgaria-Yadenitsa hydro-pumped storage project is considered key to balance the system 

223 

 
 
 
 
 
EnTEC – Study on Energy Storage 

Croatia 

Topic 

Croatia - Policy description 

1. Public Support 

The NECP version refers to electricity storage 
* Contains specific policies and measures section ES-2: Construction and use of energy storage facilities 
“In order to increase the energy storage capacity of the system and increase the regulatory capacity of 
the electricity system, it is planned to build additional reversible power plants with a capacity of 150 MW 
before 2030, then the development of heat storage tanks for end customers, the development of battery 
tanks, the introduction of charging stations for electric vehicles that allow energy storage, the develop-
ment of underground energy storage in the form of compressed gas, and the use of other innovative 
energy storage technologies (EU- funded)” 
* Among the national energy security objectives are, comes the increase of storage capacity of gas and 
energy in the electricity system 
* Energy storage in the EES will allow for the construction of pumping plants, thus also providing more 
flexibility for the system and greater integration of variable renewable energy sources, mainly solar and 
wind. 
* Croatia will increase (by 2030 and 2050) investment in research, development and innovation in low 
carbon technologies, among which advanced energy storage systems 
* Existing legal solutions need to be complemented by the development of a regulatory framework for 
active customers, aggregators, energy communities, renewable energy communities (participation in lo-
cal energy production, distribution, storage, supply and provision of energy and aggregation services) 
and own-account production of energy, in accordance with the provisions of the Directive on the pro-
motion of the use of energy from renewable energy sources, the electricity directive and the regulation 
on the internal market for electricity 
* In order to increase the energy storage capacity of the system and the increased control power of the 
electricity system, the development of battery tanks, the introduction of recharging points for electric 
vehicles and the use of other innovative energy storage technologies (financed by EU funds) are 
planned. 

2. Permitting 

* Behind-the-meter installations of battery storage are allowed (for self-production or hybrid storage 
and renewable energy projects). 

3. Energy Markets 
and Capacity 
Mechanisms 

DA/ID markets: 
* Energy storage is able to participate in DA and ID markets 
* Regulatory framework for active consumers to participate in ID & DA was not in place in 2020 

4. Ancillary Ser-
vices 

5. Grid Aspects 

Capacity mechanisms:  
NAP 

* Market barriers include a minimum bid capacity of 1 MW in wholesale markets, availability require-
ments, and limiting the price spread. 

Balancing market: 
* Pumped hydro can participate in provision of FRRm services; 
* Storage plants (incl. batteries) are allowed to provide ancillary services to the TSO 
* Regulatory framework for active consumers to participate in balancing markets was not in place in 
2020 
* Design of some products not compliant Electricity Target Model for min bid size energy & capacity 
(mFRR), validity period, procurement lead time 92% year ahead, length of balancing contracts, settle-
ment rule, activation rule 

* Storage not allowed in 2020 to provide transmission-level voltage control services 
* Storage plants (incl. batteries) can be used to guarantee the N-1 criterion for a limited amount of time 
to radial networks, but are not deployed in practice. 

* No double charging in 2020 for transmission-connected storage 
* no withdrawal charges for distribution grid for storage, only prosumers are charged for withdrawal 
charges 
* There is no regulatory framework for procurement of flexibility services allowing for the deferral of net-
work investments. 
* No information available that state that NDP is aligned with NECP 
* PHS & other storage facilities (e.g. batteries) are allowed to be included in the network development 
plan, however are not included.  
* From the public consultations the stakeholders' comments and responses are published.  

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Topic 

Croatia - Policy description 

* There is coordination between the TSO and DSOs NDPs, however focused on other alignment/joint ac-
tivities DSO/TSO 
* The PCI smart grid project, SINCRO.GRID, is under implementation as a cooperation between TSOs and 
DSOs from Slovenia and Croatia, with a 10MW/50MWh battery energy storage system (BESS) being 
trialled in Slovenia 

6. Taxes & Levies 

* Electricity consumption for charging is taxed like other consumers. 

7. Other & Gen-
eral 

* Energy storage is not defined in the national regulatory framework. 

8. Barriers 

* There is no common definition of energy storage in the regulatory framework 

9. Best practices 

225 

 
 
 
 
 
EnTEC – Study on Energy Storage 

Cyprus 

Topic 

Cyprus - Policy description 

1. Public Support 

2. Permitting 

The National Energy and Climate Plan (NECP) refers to electricity storage. 
* If Cyprus remains electrically isolated from other electricity networks, the penetration from RES-e will 
only be increased once RES-e, coupled with storage technologies, materialises. The need of storage sys-
tems (both behind and in front of the meter) is included in the electricity system investments, but their 
need might be limited ifCyprus will get electrically interconnected by 2026. 
* The pumped hydro storage facility was presented as an option, but its deployment is delayed until 
2027 (estimated 130MW pumped storage potential by 2030 in Cyprus), in addition to the uncertainties 
concerning project maturity and technical feasibility of the project. 
* The objective to deploy an Advanced Metering Infrastructure, including the roll-out of 400.000 smart 
meters by 2026 will enable the optimisation and control of the distribution system, increase the penetra-
tion of distributed renewable sources, enable aggregation of RES, demand response and storage and 
increase direct final customer participation in all market stages (active customers). 
* The use of Interconnector can help the RES to further penetrate earlier, while in the WEM scenario it 
seems that more RES will be introduced in the post 2030 period with technologies that using storage be-
hind the meter. These technologies, based on the existing available data, include Concentrated Solar 
Thermal (CSP) and other storage technologies like Li-Ion Batteries.A detailed overview of Storage tech-
nologies that can be deployed in Cyprus was made under an SRSS study by University of Cyprus375 and 
JRC376. 
* In its scenario modelling, several storage options play a role in the further penetration of RES due to 
the absence of Electricity Interconnector, including: pumped hydro storage; lithium-Ion battery storage; 
concentrated solar power storage (thermal Storage that is converted to electricity). 
* Enabling participation of storage is one of five objectives to promote competitively-determined elec-
tricity prices & increase system flexibility: 'revise the regulatory framework to enable the participation of 
storage in the electricity market' (the regulatory framework was revised). Ensure that generators, aggre-
gators and consumers will be allowed to own and operate storage systems, buy and sell on the day-
ahead, forward markets; also enable participation in the balancing market. 
*Storage technologies can be used also as a support for conventional power generating units and limit 
the start-up and shut-down cost. This will increase both the performance and the efficiency of the con-
ventional power generating units. 
*Pre-notified to DG Competition a state aid scheme for the installation of 130-150MW/ 2h storage sys-
tems in front of the meter.  

* According to the Law for the Regulation of the Electricity Market of 2021 (L.130(I)/2021), a licence from 
CERA is required for the installation and/or operation of an electricity storage facility, with the exception 
of electricity storage facilities operating exclusively for own use. CERA had recently launched a public 
consultation concerning the licencing regulations and currently the proposed licence regulation (which 
includes the standard licence terms of a storage facility) is being forwarded to the Council of Ministers 
through the Minister of Energy, Commerce and Industry, as provided by the Law.  Stakeholders indicate 
that once network codes are finalised regarding e.g. battery storage, special environmental requirements 
will be developed especially concerning fire hazard. 
* Ground contamination by leakages is already covered in the law for the environment, requiring appro-
priate measures. 

3. Energy Markets 
and Capacity 
Mechanisms 

* Energy storage enabling regulatory framework for storage systems in front-of-the-meter has been ap-
proved by CERA on 30/12/2023 (Transmission and Distribution Rules) and 5/1/2022 (Trade and Settle-
ment Rules) and will be put in operation on 30/9/2024 (Regulatory Decisions 386/2001, 4/2022 and 
72/2022).  

DA/ID markets: 
* Front-of-the-meter energy storage will be able to participate in DA and ID markets on 30/9/2024. 
* Regulatory framework for active consumers to participate in ID & DA was not in place in 2020 

Balancing market: 
* Energy storage in front of the meter will be eligible to participate in balancing markets on 30/9/2024. * 
Regulatory framework for active consumers to participate in balancing markets was not in place in 2020 

Capacity mechanisms: 

375  http://www.mcit.gov.cy/mcit/EnergySe.nsf/All/4CFADF62B303D228C22584D6004AAB42/$file/JRC%203-%20Storage.pdf 

376  JRC study for storage 

226 

 
 
 
 
                                                   
EnTEC – Study on Energy Storage 

Topic 

Cyprus - Policy description 

4. Ancillary Ser-
vices 

5. Grid Aspects 

* Currently, there is no capacity remuneration mechanism. 
* Regulatory framework enabling front-of-the-meter storage has been approved by CERA on 30/12/2021 
and 5/1/2022 and will be put in operation on 30/9/2024 (Regulatory Decisions 386/2021, 4/2022 and 
72/2022) 
* At present, the only service of storage for end-users is to increase self-consumption to 100% when us-
ing the net metering and net billing schemes. The time of use tariff for net billing users provides an addi-
tional signal. 

* Regulatory framework enabling front-of-the-meter storage has been approved by CERA on 30/12/2021 
and 5/1/2022 and will be put in operation on 30/9/2024 (Regulatory Decisions 386/2021, 4/2022 and 
72/2022) 

* No double charging in 2020 for in front of the meter storage 
* Only prosumers are charged for withdrawal charges at distribution level 
* There are no specific connection rules for storage, so same connection rules for other generators 
and/or loads apply. Upcoming regulatory changes should not change this. 
* According to regulatory decision by CERA 03/2019 in-storage during the charging cycle is exempt from 
network tariffs.  
*According to the Law for the Regulation of the Electricity Market of 2021, CERA shall ensure that the 10-
year transmission network development plan and the 10-year distribution network development plan are 
consistent with objectives, targets, policies and measures defined within the NECP, which is elaborated in 
accordance with the Regulation (EU) 2018/1999 and adopted by the Council of Ministers. 
* There is coordination between the TSO and DSOs NDPs. 

6. Taxes & Levies 

* No information identified on absence of double taxation for energy storage. 

* In 2020, there were four research projects on storage: StoRES, PV-ESTIA, ERIGENEIA and FLEXITRAN-
STORE, SREC. Through the R&I (with EU partners) there is willingness to diffuse best practice solutions 
for the deployment of storage in Cyprus 

7. Other & Gen-
eral 

8. Barriers 

9. Best practices 

227 

 
 
 
 
EnTEC – Study on Energy Storage 

Czech Republic 

Topic 

Czech Republic - Policy description 

1. Public Support 

2. Permitting 

The NECP refers to electricity storage 
* Electric vehicle batteries are acknowledged as potential storage option within the electricity market 
* 'Electricity storage, including the use of hydropower' is mentioned as a specific sub-area in the national 
priorities for research, experimental development and innovation 
* Energy storage can be supported in the framework of the Modernisation fund RES+ program provided 
that it is a part of a new RES installation and serves to balance its output (it cannot be used to provide 
ancillary services). 

* There is no specific licence issued by the Regulator for battery storage systems yet. The licence param-
eters are foreseen to be addressed in the market design of the Energy Act. 
* Pumped hydro is operated on the basis of a license for production, granted through the standard pro-
cess as for other power plants. 

3. Energy Markets 
and Capacity 
Mechanisms 

DA/ID markets: 
* PHS is able to participate in DA and ID markets 
* Regulatory framework for active consumers to participate in ID & DA was not in place in 2020 
* Stand-alone battery units are not allowed to participate in the energy markets according to the 
amendment to the Energy law from 2021. 

Capacity mechanisms:  
NAP 

* Storage facilities can participate in the electricity markets (including intraday and balancing) only to-
gether with the spinning reserves. Stand-alone batteries are completely forbidden for any kind of use in 
the energy markets in the Czech Republic, use with RES officially allowed 
* Storage is used primarily for active customers to avoid network charges. 
* Large boilers, usually inside of district-heating and power plants, are used for ancillary services 

4. Ancillary Ser-
vices 

* Czech TSO (CEPS) updated the network code in 2021 to allow participation of battery storage units in 
the balancing markets, including stand-alone battery units. 

Balancing market: 
* Trans-European Replacement Reserves Exchange (TERRE) in place for exchange of replacement re-
serves, and allowing the participation of storage. 
* No other information identified on storage not being eligible to participate in balancing markets 
* Regulatory framework for active consumers to participate in balancing markets was not in place in 
2020. According to the amendment to the Energy law from 2021, integrated aggregators are allowed to 
provide ancillary services from aggregated consumers and/or suppliers. 

*Not open for independent aggregators in 2020. After the update of the network codes, aggregation 
blocks including battery storage can participate in the balancing service market. 
* Design of some products not compliant with Electricity Target Model for min required capacity (FCR, 
aFRR, mFRR, RR), aggregation of load, validity period, procurement lead times, settlement prices (pay as 
bid mFRR), activation rule 
*max/min price limits not compliant with Electricity Target Model 
* Dual pricing, single position not compliant with Electricity Target Model 

* Storage not allowed in 2020 to provide transmission-level voltage control services, still relevant in 
2022.  

* Czech legislation does not allow direct connection of batteries to the grid, for storage purposes, only 
together with the generation site. 
* No double charging in 2020 for transmission-connected storage 
* Distribution network charges are applied only to consumers. 
* PHS & other storage facilities (e.g. batteries) are not allowed to be included in network planning, which 
involves specifically grid infrastructure, such as transmission lines, transformers or substations. 
* From the public consultations stakeholders' comments and responses are published.  

5. Grid Aspects 

6. Taxes & Levies 

* Support for the development of storage facilities is primarily provided in the form of investment grants. 
* No tax exemptions or rebates are applied or considered at the moment. 
* No information identified on absence of double taxation for energy storage, thus assume it exists 

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EnTEC – Study on Energy Storage 

Topic 

Czech Republic - Policy description 

7. Other & Gen-
eral 

8. Barriers 

9. Best practices 

* Works on the completely new Energy Act started and relevant stakeholders participate in its prepara-
tion, including the Association for Energy Storage & Batteries AKU-BAT. However, this new act should be 
proposed towards the end of 2022. 

* Some changes in the ancillary services are not completely addressing storage: stand-alone batteries 
still cannot provide non-frequency ancillary services, only in connection with spinning reserves. 
* Stand-alone batteries can be connected to the grid (only in testing mode), but cannot supply electricity 
to the grid, their use in hybrid installations is hence limited, except at the same site. 
* There is no common definition of energy storage in the regulatory framework, and it was removed 
from the Energy Act amendment draft. 

229 

 
 
EnTEC – Study on Energy Storage 

Denmark 

Topic 

Denmark - Policy description 

1. Public Support 

2. Permitting 

3. Energy Markets 
and Capacity 
Mechanisms 

4. Ancillary  
Services 

The NECP version refers to electricity storage: 
* Policies and measures adopted with the 2018 Energy Agreement includes, among many others, the en-
ergy storage fund of 2019, developing markets for flexibility and ancillary services,  
* Energy storage could be a useful tool to ensure sufficient supplies of energy, by levelling out demand 
peaks and by making use of surplus wind energy from times of high wind power generation to store for 
later times of shortage. Today, the technologies available for storing electricity are rather limited and ex-
pensive. Yet, the technologies will possibly continue to be developed and become profitable with time, 
as current trends in prices of storage technologies are indicating. This means that in the future it is not 
unlikely that for instance power-to-gas and the hydrogen sector could play a larger role in ensuring sup-
ply security and that batteries will become more prominent in the energy markets. 
* The flexibility of the energy system is expected to be facilitated largely by market-based solutions. 
Therefore, it is an objective to support structures that favour demand response and energy storage mar-
kets. Especially the integration with the district heating sector and its vast energy storage capacity is ex-
pected to provide a basis for increasing flexibility through increased demand response and energy stor-
ages 
* The Danish electricity market is open for participation from renewable energy, demand response and 
storage, including via aggregation 
* In order to accommodate future needs, the Danish Government has established a fund supporting de-
velopment and demonstration projects on energy storage. The fund’s size is 128 million DKK and it was 
in December 2019 granted to two Power-to-X-projects 
* Increased flexibility in energy system is crucial for the green transition and storage can contribute to 
that flexibility 
* NER (Nordic Energy Research) has identified seven key areas that could enhance joint Nordic research 
efforts, among which Energy Storage  
* While smart grids specifically address the problem of moving consumption to other times during the 
day and matching supply with demand, system integration is also a growing and very important area. In 
the future, many factors will be competing to supply this dynamic: electric cars, electric cartridges, heat 
pumps, etc. system integration also covers aspects relating to energy storage and smart energy 
* A larger share of intermittent RE leads to greater demand for energy storage solutions. In this context, 
battery storage, in particular, is expected to play a significant role (including small scale PV) 
* Furthermore, energy storage could be a useful tool to ensure sufficient supplies of energy, by levelling 
out demand peaks and by making use of surplus wind energy from times of high wind power generation 
to store for later times of shortage 
* Ambitious targets and plans to decarbonise the energy supply : more than 1 million green cars by 
2030; a new gas strategy; a roadmap for smart energy, expected to provide increasing flexibility through 
demand response and energy storage 

DA/ID markets: 
*Energy storage is able to participate in DA and ID markets 

Capacity mechanisms:  
NA 

* District heating companies own and operate large thermal storage facilities and are active in the elec-
tricity market to respond to short-term changes in electricity prices. 

Balancing market: 
* FCR cooperation project active, allowing for provision of FCR capacity by storage. 
* Pumped hydro is eligible to provide also FRR services 
* No other information identified on storage not being eligible to participate in balancing markets 
*Design of some products not compliant Electricity Target Model including, max delivery period of 4 
hours (mFRR), validity period (aFRR & mFRR) & settlement rule (pay as bid aFRR & mFRR) 
* Max/min price limits compliant with Electricity Target Model 
* Single pricing, single position compliant with Electricity Target Model 

New ancillary services: 
* SIR: Looking into solutions for falling inertia levels 

* Transmission-level voltage control provision in 2020 was mandatory and non-remunerated 

230 

 
 
 
 
 
 
 
EnTEC – Study on Energy Storage 

Topic 

Denmark - Policy description 

5. Grid Aspects 

Mechanisms to value distributed flexibility sources:  
* Local flexibility platforms & other initiatives: INTERRFACE (T/DSO) 
* Possible to stack different balancing services from committed availability windows, however dynamic 
pooling is not yet allowed 
* District heating companies own and operate large thermal storage facilities, often equipped with elec-
tric boilers. Their fast response is offered to the balancing market. 

* No double charging in 2020 for transmission-connected storage 
* Only prosumers are charged for withdrawal charges for the distribution grid 
* The TSO Energinet has published grid codes specifically for the connection and access of batteries 
* The DSO Danish Energy has recently participated in several research projects analysing the impact of 
batteries on distribution systems  
* Self-producers (companies) shall not pay the grid tariff for the part of their production covering their 
own consumption 
* Customers with their own 132 kV transformers with settlement on the 132 kV side pay a reduced grid 
tariff 
* The NECP is taken into account while developing NDP through the assumptions regarding the con-
sumption and production provided by the Danish Energy Agency 
* PHS & other storage facilities (e.g. batteries) are not allowed to be included in network development 
plan,  
* Introduced public consultations of the draft NDP; Published stakeholders' comments and responses 
* None of the DSOs prepare a NDP (from 2023 each DSO should prepare an electricity development plan 

6. Taxes & Levies 

* There is no exemption of taxation and fees, storage is considered as a normal consumer 

7. Other &  
General 

8. Barriers 

* No definition of storage in the national legislation 

* There is still an absence of technical specifications for how batteries are expected to participate in all of 
the Nordic ancillary services markets. The Danish requirements for batteries are currently being revised, 
and a new version is expected in late 2019. 

9. Best practices 

* District heating companies are actively participating in energy markets. 
* The TSO Energinet has published grid codes specifically for the connection and access of batteries 

231 

 
 
 
 
 
EnTEC – Study on Energy Storage 

Estonia 

Topic 

Estonia - Policy description 

1. Public Support  The final 2019 NECP version refers to electricity storage: 

* Hydrogen could be one of the main options for the storage of renewable energy and more favourable 
options for the storage of electricity for days, weeks or even months 
* seasonality need for temporary storage on the part of the proprietor 
* Estonia’s economy needs investment in the transition to cleaner energy and more sustainable jobs, in-
cluding the acquisition of wind farms (including national defence aerial surveillance radars), electricity 
storage solutions, cogeneration plants, transport to biofuels and electricity transfer, electricity railways and 
modern rental housing funds, renovation of apartment buildings, demolition of buildings that fall out of 
use, decarbonisation of the cement and lime industries, recycling of industrial residual gases. 
* Chapter deals with measures to increase the flexibility of the energy system to produce renewable en-
ergy, such as smart grids, aggregation, demand response, storage, distributed generation, distribution, 
redispatching and curtailment mechanisms and real-time price signals, including the introduction of intra-
day coupling and cross-border balancing markets 
* As regards independent aggregators and energy storage, the regulation will be complemented by Di-
rective 2019/944 on the EU internal electricity market 
* The trends of Estonia’s renewable energy sector in 2040 viewpoints depend heavily on the megatrends 
we can see in Europe and also in the world, where carbon-neutral energy production, energy saving and 
storage and smart consumption are the keywords 
* To ensure security of electricity supply in Estonia, a combination of renewable energy production facili-
ties and storage solutions (including seasonal storage), … may be used in the future 
* As regards energy storage, Estonia is already on the world map, with Skeleton Technologies, the leading 
European producer of super-capacitors, producing facilities in Germany and developing in Tallinn 
* on RD&I, be at the forefront of next generation renewable energy technologies, storage, smart grid and 
home solutions, smart cities, buildings neutrality, clean transport, clean carbon capture and utilisation and 
nuclear energy, building on Horizon 2020. 

2. Permitting 

* No specific permitting provisions identified. 

3. Energy Mar-
kets and Capac-
ity Mechanisms 

DA/ID markets: 
*Energy storage is able to participate in DA and ID markets 

Capacity mechanisms:  
NA 

4. Ancillary  
Services 

* The Electricity Market Act indicates that the regulator may oblige the TSO to tender new production, en-
ergy storage devices or energy efficiency/demand-side management measures if generation reserves fall 
below requirements or if this is necessary for the promotion, of new technologies 
* In April 2010 the Nord Pool power exchange started operations in Estonia. Nord Pool day ahead and in-
traday markets are open to storage. The day ahead products include hourly and block orders, while the 
intraday market offers 15-minute, 30-minute, hourly and block products. 

Balancing market: 
* In January 2018 the Baltic common balancing market came in operation, covering mFRR. Storage is al-
lowed to provide mFRR services. For mFRR the product duration is 15 min , the minimum bid size is 1MW. 
* Currently only FRR is used in the Baltic balancing market. The Russian Unified Power System (UPS) pro-
vides FCR and FRRa, while Baltic TSOs also provide RR. 
* Aggregated generation and loads can participate only in the FRRm market. They cannot provide other 
ancillary services such as black start or voltage control. 
* Loads use the same market mechanisms and activation procedures as generation to provide balancing 
services (both capacity and energy) 
*No other information identified on storage not being eligible to participate in balancing markets 
*Design of some products not compliant with Electricity Target Model including max delivery period 
(mFRR), validity period (mFRR), max price limit, no min limit implemented 
* Single pricing, single position compliant with Electricity Target Model 

* All power plants that are connected to the main grid must have voltage control capability. The service is 
partly remunerated by the TSO. 
* Black start service is provided by power plants which are included in the restoration plan as black start 
service providers. It is not a mandatory service and is remunerated by the Elering. 

232 

 
 
 
 
 
EnTEC – Study on Energy Storage 

Topic 

Estonia - Policy description 

5. Grid Aspects 

* The Electricity Market Act indicates that the regulator may oblige the TSO to tender new production, en-
ergy storage devices or energy efficiency/demand-side management measures if generation reserves fall 
below requirements or if this is necessary for the promotion of new technologies 

Mechanisms to value distributed flexibility sources: 
* Local flexibility platforms & other initiatives: INTERRFACE (T/DSO) 

*  In the Electricity Market Acts it is stated that withdrawal charges for storage apply similarly to consum-
ers (network fee + electricity excised duty + renewable energy fee). Starting from March 2022, injection of 
electricity into the network will be derogated from the distribution and transmission fee.  
* Injection charges for prosumers connected to the distribution grid, usually households, installed capacity 
>0,015 MW and withdrawal charges for prosumers.  
* According to an Elering 2015 report, a DSO was already then looking at flexibility projects such as en-
ergy storage, as it had already 'been forced to curtail the maximum output of a wind farm due to local 
network constraints. In the long term, the DSO is expecting overloaded substations in all types of distribu-
tion network areas (rural, suburban and urban).' 
* The feed-in scheme was kept for installations under 50 kW following the 2018 update of the Electricity 
Market Act. Net metering is not allowed. 
*  Several power plants will have to be closed in the future due to the NECP and this has been taken into 
account in the assessment of production adequacy. The development of the network takes into account 
additional wind farms. The adequacy of externalconnections is assessed. 
* PHS & other storage facilities (e.g. batteries) are allowed to be included in the network development 
plan, however are not included.   
* Neither public consultations nor any specific or bilateral consultation is carried out, however upcoming 
amendment of the national legislation in Estonia will also include a requirement for the NDP to be pub-
licly consulted 
* Not all DSOs prepare NDPs, other alignment/joint activities DSO/TSO 

6. Taxes & Levies 

* No specific mention of electricity storage in the tax legislation, thus assumed that storage charging pays 
the electricity consumption tax. 

7. Other &  
General 

8. Barriers 

9. Best practices 

* Storage is added in the updated Electricity Market Act (March, 2022). Network companies are obliged to 
prepare relevant network services for electricity storage.  

* The Baltic states implemented the Baltic common balancing market, with storage being able to provide 
the first product, mFRR. 
* Regulation specifically indicates TSO roles to tender for new flexibility resources including storage due 
to generation adequacy or innovation considerations 

233 

 
 
 
 
 
 
 
EnTEC – Study on Energy Storage 

Finland 

Topic 

Finland - Policy description 

1. Public Support 

2. Permitting 

3. Energy Markets 
and Capacity 
Mechanisms 

The NECP version refers to electricity storage: 
* The transition to a low-carbon economy will require additional investments, particularly in bioeconomy, 
the circular economy, clean energy solutions, energy efficiency, emissions-free forms of energy produc-
tion, energy storage solutions, carbon recovery and energy utilisation, along with research, development 
and innovation activities and measures to bring these solutions to market 
* Among the three most popular proposals of the citizens' survey:  
Promotion of decentralised energy production (electricity, heat, transport, storage) through sustainable 
and cost-effective measures  
* As for ensuring generation adequacy in the light of the renewable energy contribution, including de-
mand response and storage, the Finnish strategic reserve system plays a significant role. 
* Demand response and storage are further promoted by applying the proposals by the Smart Grid 
Working Group as discussed in Chapter 3.4.3 
* In October 2018, the Smart Grid Working Group set up by the Ministry of Economic Affairs and Em-
ployment proposed an extensive operational programme to increase the demand-side response of elec-
tricity and the opportunities for customers to participate. The working group’s key proposals were: 1/ 
clarifying the roles of actors in the market-based implementation of demand-side response (e.g. princi-
ples for the storage of electricity, discontinuation of the flexibility implemented by distribution net-
works); 2/ highlight the significance of market-based solutions for demand response and storage 
* Finland committed to doubling public innovation funding for clean energy by 2020. The baseline was 
the average of the funding granted by TEKES to projects on renewable energy sources, storage of en-
ergy, energy systems and energy networks between 2013 and 2015 
* Finland is also active in Set-Plan key action no 7. “Batteries for e-Mobility and Stationary Storage”, 
where Finland is leading the working group related to battery recycling. 
* Total use of electricity in the transport sector is not more than 1–2% of the total electricity demand 
during the assessed period. Its impact on electricity generation is small on a yearly level, but charging 
batteries and active use of them as two-way electricity storage can affect both the short-term electricity 
market and the local grid. 

* In Finland, there is no specific rules (legislation, procedures) for the storage permitting. 
* Small-scale batteries need only the city planning acceptance, but when locating battery in the existing 
industrial site, the permitting is typically only light notification. 
* Large-scale storages like pumped hydro or hot water storage (based in natural rock) need also permis-
sion according to the water body legislation when affecting water body/ground water levels or other hy-
dro-morphological issues. The permission of the large-scale projects comprises public hearings as part 
of permitting procedure. Stakeholders indicate there are also rights for contestation through courts, 
which can lead to prolonged delays if there is no social acceptance. 

DA/ID markets: 
*In 1998-1999, the Nord Pool power exchange started operations in Finland. Nord Pool day ahead and 
intraday markets are open to storage. The day ahead products include hourly and block orders, while the 
intraday market offers 15-minute, 30-minute, hourly and block products. 
*Energy storage is able to participate in DA and ID markets 
* Regulatory framework allows for all eligible customers to participate in all market places, including ac-
tive customers (not explicitly mentioned). However, due to minimum participation thresholds of the mar-
ket places aggregation is needed.  
Capacity mechanisms (strategic reserve):  
* Allows energy storage, however CM has a limited delivery period (three winter months  

* There is integration between district heating, cooling and electricity both in supply and demand, with 
extensive use of water boilers and other water heating systems as storage and an estimated 1800 MW of 
heat storage controllable through smart meters. Night-day-tariffs have been used to shift electricity con-
sumption to night hours, mainly due to water heat storages. Large heat storages especially connected 
with combined heat and power plants supplying district heating networks are common. 
* For example, in Helsinki there are underground cooling storages. 
* Heat pumps are commonly used for heating on building level (over 1 Mio units in use) and to produce 
district heating and cooling. 

4. Ancillary Ser-
vices 

Balancing market: 
* In 2022, batteries can participate in FRR and FCR services, while loads could provide FCR/FRRm. Dedi-
cated rules to batteries apply to the management of the state of charge and to the restoration of full ac-
tivation capacity in FCR.  

234 

 
 
EnTEC – Study on Energy Storage 

Topic 

Finland - Policy description 

* Regulatory framework allows for all eligible customers to participate in all market places, including ac-
tive customers (not explicitly mentioned). However, due to minimum participation thresholds of the mar-
ket places aggregation is needed. 
* Fingrid conducted a pilot from 2017 to 2019 to allow the participation of independent aggregators in 
the mFRR balancing market that was prolonged and the participation enlarged in 2020.  

* Regulatory framework for active consumers to participate in balancing markets was not in place in 
2020 
*Design of some products not compliant Electricity Target Model including max delivery period longer 
than 4 hours (mFRR), min capacity required (aFRR, mFRR), min bid size energy & capacity, validity period, 
activation rule 
* Not compliant with Electricity Target Model: Max limit, no min limit implemented 

New ancillary services: 
* SIR: Looking into solutions for falling inertia levels 

Mechanisms to value distributed flexibility sources 
* Local flexibility platforms & other initiatives: INTERRFACE, OneNet (T/DSO) 
* Portfolio bidding is allowed in all reserve products and markets, however same capacity cannot be sold 
multiple times; dynamic pooling is allowed in balancing services 
* Offering storage in non-frequency ancillary services procurement is allowed. 

* MS does not apply injection charges for storage connected to distribution grid, only injection & with-
drawal charges for prosumers.  
* There is no separate connection or access rules and/or standard terms of contract for storage. Similar 
to self-generation, storage is considered a consumer when charging and a producer when discharging. 
Grid tariff for production is in LV- and MV-networks limited to up to 0.07 €/kWh. . Most of the DSOs do 
not charge for LV injections below 100 kW. 
* Net metering within one hour will be introduced to all customers from 1.1. Self-production within a 
consumption site (behind a meter) is allowed. 
*  The NDP takes into account the future changes in system needs that are guided by the NECP 
* PHS & other storage facilities (e.g. batteries) are allowed to be included in the network development 
plan. 
* The government's proposal for legislation follows the logic that the system operators should not be 
allowed to own or operate storage unless there is no market based capacity available for the need of the 
DSO. 
* Published stakeholders' comments and responses  
* Coordination between TSO/DSO NDPs: Other alignment/joint activities DSO/TSO 

* Taxation of electricity for large batteries has been eliminated in 2019. Electricity is transferred to large 
storages without any excise duty on electricity. The excise duty is paid when electricity is transferred to 
be consumed.  
* The government programme in early 2021 foresaw that taxation on electricity storage for pumped 
storage facilities and smaller batteries will be examined.  

5. Grid Aspects 

6. Taxes & Levies 

7. Other & Gen-
eral 

* Electricity storage is defined in the law concerning electricity and fuel taxes: 'electrical storage' means a 
functional unit of equipment, machinery and buildings required for the short-term electrochemical stor-
age of electricity. 

8. Barriers 

* Double taxation for small batteries still needs to be eliminated. 

9. Best practices 

* The government formed a Smart Grids working group, addressing multiple aspects related to e.g. stor-
age, aggregation and active consumers. 
* The Finnish energy market is generally based on open market driven policies and competition on level 
playing field. This applies to electricity retail and wholesale markets as well as heating markets. 
* TSO pro-activity is seen as a positive aspect, as well as co-operation between TSO, DSOs and market 
actors. 
* Using storage in non-frequency ancillary services is allowed. 
* One of the largest virtual batteries in the EU is located in Finland. It aggregates and controls distrib-
uted energy assets (mainly water heaters) owned by customers, for grid balancing purposes. 

235 

 
 
 
 
 
 
EnTEC – Study on Energy Storage 

France 

Topic 

France - Policy description 

1. Public Support 

2. Permitting 

The NECP refers to electricity storage 
* Power systems flexibility tools including storage must be developed on the medium-term, especially 
due to the penetration of renewable energy 
* The multi-annual energy plan should anticipate the energy system change and enable the develop-
ment of energy storage377 
* Storage is identified as a specific R&I need  
* Storage is a flexibility pillar to handle fast supply and demand fluctuations 
* The 2018 Low-Carbon National Strategy reference scenario includes storage, including measures to de-
velop geothermal heat storage 
* Plan to confirm by 2023 the gas storage needs post-2026 
* Identify sites for decommissioning in the next multi-annual energy plan 
* Plan to develop in the first period of the multi-annual energy plan (by 2023) the framework to develop 
storage as an alternative to grid expansion from 2028 
* The multi-annual energy plan adopted in 2020 (programmation pluriannuelle de l’énergie, PPE) gives 
the objective to develop an additional 1,5 GW of PHS between 2030 and 2035. 
* Plan to continue R&I efforts in storage through various government mechanisms 
* Plan to study the reutilisation of salt caverns for hydrogen storage 
* Plan to review support framework to enable solar thermal heat storage 
* Additional storage needs to 2035 occur only in scenarios with faster decrease of nuclear power genera-
tion 
* “The 'Batteries and Storage action plan' intended to cover batteries, a key technology for applications 
involving electric mobility and fixed energy storage.” 
* ‘The French Ministry of Higher Education, Research and Innovation, through the ANR, and the German 
Federal Ministry of Education and Research (BMBF) launched a bilateral call for projects in 2018 with 
funding of €20 million on energy storage and distribution (expected to close in January 2019)’ 
* Adoption of a regulation to allow storage specific call for tenders to increase storage development to 
cope with flexibility needs. 

* The standard permitting rules for power generation plants apply to energy storage plants e.g. planning 
permission (which covers environmental issues), power generation licence (at the moment, electric stor-
age plants have not been submitted to power generation permit application, this question will be dis-
cussed in the next few months) and authorisation to construct. 

3. Energy Markets 
and Capacity 
Mechanisms 

DA/ID markets: 
* Energy storage is able to participate in DA and ID markets 
* In 2018 the EPEX energy exchange introduced loop block orders, where two block orders are executed 
or rejected together, representing for example the storage cycle. 

Capacity mechanisms:  
* Existing rules to take into account the specific contribution of storage to security of supply. A storage 
unit can individually participate in the CRM if its capacity is above 1MW, or through aggregation for a 
total of minimum 1MW, for lower capacities. 
* Only a few storage technologies as explicitly eligible for participation (among which batteries and 
pumped hydro storage) 
* Call for tenders complementing the CRM to incentivise the development of additional capacities: stor-
age included and awarded (batteries) in the 2019 edition covering the 2021-2028 periods. 7 year-long 
fixed premium. 

Balancing market: 
* Pumped hydro can provide a wide range of ancillary services (FCR, FRRm, FRRa and RR), while batteries 
are eligible to provide FCR and aFRR. To this end, the Frequency System Services rules are currently be-
ing reviewed in order to clarify the conditions and pre-requisites for the participation to batteries 
* FCR cooperation project active, allowing for provision of FCR capacity by storage  
* Trans European Replacement Reserves Exchange (TERRE) in place for exchange of replacement re-
serves, and allowing the participation of storage, at least pumped hydro 
* No other information identified on storage not being eligible to participate in balancing markets 

4. Ancillary Ser-
vices 

377  CRE (French regulator) has achieved a review of the regulatory issues for the development of storage. Results, including rec-

ommendations and special requests to the system operators are reported in a document available here (in French): 
https://www.cre.fr/Actualites/La-CRE-publie-sa-feuille-de-route-pour-le-stockage-de-l-electricite 

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Topic 

France - Policy description 

5. Grid Aspects 

* Some balancing products not compliant with Electricity Target Model including max delivery period 
120 minute (mFRR & RR), min capacity (mFRR, RR), min bid size energy & capacity (mFRR & RR), validity 
period, regulated prices as settlement rule (FCR & mFRR), activation rule 
* Not compliant with Electricity Target model: min/max price limit 
* Single pricing, single position compliant with Electricity Target Model 
*Full valorisation of storage assets on Balancing Mechanism is not yet possible but discussions ongoing.  

Mechanisms to value distributed flexibility sources 
* The DSO Enedis launched a call for tenders for local flexibility products in dedicated areas, including 
storage and demand response, and REFLEX project in order to introduce market mechanisms in the 
frame of grid congestion management 
* The TSO RTE has also launched a call for flexibility products from storage in dedicated areas.  
* All products and markets can be offered at pool level, and dynamic pooling is possible in wholesale 
and CM and partially for balancing. FCR contracts for example include a penalty for non-delivery but no 
exclusivity clauses 

* Storage operators must sign the same regulated contract to provide ancillary services as other provid-
ers. 

* Storage not allowed in 2020 to provide transmission-level voltage control services 

* Double charging in 2020 for pumped hydro storage 
*  injection & withdrawal charges for distribution grid for PHS, other storage (e.g. batteries) and prosum-
ers.  
* Storage operators pay 'postage stamp' transmission charges as a consumer (for their offtake) and do 
not pay injection charges. A discount on the transmission grid tariff up to 50% applies for energy storage 
plants, if their utilisation rate during off peak hours exceeds 0.53 and if their efficiency rate is higher than 
70%.  
* There are in France no locational network tariffs. 
* Rules for grid connection currently applicable for 'utility scale' batteries are considered efficient and do 
not jeopardize the development of storage. 
* Network connection procedures for small network users are currently separate for demand and pro-
duction. 
* The specific legal provisions regarding self-production also stimulate flexibility solutions including stor-
age. 
* Specific tariff exists for multi-locations customers. This tariff considers a unique virtual site, summing all 
load of the concerned sites, and calculating an annual fee proportional to the necessary length of net-
work to connect these sites. 
* Industrial customers connected to the transmission grid can benefit from a reduction of their transmis-
sion invoice from 5% to 90% depending on whether they have storage capabilities or not, their demand 
(annual consumption, annual usage duration, usage duration during peak period vs. usage duration dur-
ing off-peak period) and on the importance of electricity in their process, and the degree of international 
competition 
* NDP aligned with NECP: A central scenario is defined to reflect the French Multiannual Energy Pro-
gramme. The Programme was however not finalized at the time inducing some uncertainties on the cen-
tral scenario. In this context, alternative scenarios (‘Volt’ and ‘Ampere’ designed by the TSO) were partic-
ularly useful to assess the projects. 
* PHS & other storage facilities (e.g. batteries) are not allowed to be included in network development 
plan, discussion is ongoing.  
* A more extensive and longer consultation of the draft NDP in France; Published stakeholders' com-
ments 
* Not all DSOs prepare NDPs, other alignment/joint activities DSO/TSO 

6. Taxes & Levies 

* Storage charging needs to pay for taxes, levies and network tariffs for the electricity consumed (even in 
isolated systems, ZNI) but the electricity stored to be reinjected in the network is exempted from tax on 
final electricity consumption. 

7. Other & Gen-
eral 

* A definition of storage exists (order of 7th of July 2016) : 'a set of stationary electricity storage equip-
ment allowing the storage of electric power in one form and its reconversion, while being connected to 
the public power grids. The technologies of these equipment are [pumped storage], hydrogen, electro-
chemical batteries […]. The facility is connected to the public power grid directly or indirectly, through 
facilities belonging to a user of the grid.' 

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8. Barriers 

9. Best practices 

* There is a lack of a connection framework for batteries conducting to the risk that new existing con-
straints for other assets (non-synchronous generation) would apply to batteries, however network opera-
tors’ technical regulation included specificities of non-synchronous storage assets. 
*Minimum size for participation on Balancing Mechanism high (10 MW) 

* NECP addresses storage extensively, including in R&I strategy, multi-annual energy plan, and industrial 
strategy. 
* Many task forces have been set up to discuss storage, one being co-chaired by the NRA and the minis-
try. 

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EnTEC – Study on Energy Storage 

Germany 

Topic 

Germany - Policy description 

1. Public Support 

2. Permitting 

3. Energy Markets 
and Capacity 
Mechanisms 

4. Ancillary Ser-
vices 

The NECP refers to electricity storage 
* Central strategy in renewable energy: expansion of funding programmes for heat storage systems  
* The Federal Government has set the goal of building a flexible electricity system consisting of well-de-
veloped electricity networks and flexible power plants and consumers. Storage facilities will be inte-
grated into this system wherever appropriate. It has also confirmed its ambition to enhance research into 
storage technologies. 
* The market incentive programme for supporting renewable energies in the heating market provides 
funding for large-scale storage facilities for heat from renewables 
* The Seventh Energy Research Programme covers five main topics, including 'System Integration,' with a 
focus on networks, storage reservoirs and sector coupling as a new area of research 
* Plans exist to set up a new Fraunhofer Institute for Storage Technologies 

* Federal Battery Act (Batteriegesetz – BattG, https://www.bmu.de/en/law/batteries-act/) is transposing 
Directive 2006/66/EC of the European Parliament and of the Council of 6 September 2006 on batteries 
and accumulators and repealing Directive 91/157/EWG.  The new Act (amendment) deals with the plac-
ing on the market of portable batteries containing cadmium and intended for use in cordless power 
tools, and of button cells with low mercury contents. 
* Regarding the installation of storage units, the applied legislation is the Federal Building Code 
(Baugesetzbuch - BauGB) and the Federal Emission Protection Act (Bundes-Imissionschutzgesetz - BIm-
SchG) 
* Transposed Directive 2013/56/EU on (waste) batteries and accumulators addresses the placing on the 
market of portable batteries and accumulators containing cadmium intended for use in cordless power 
tools, and of button cells with low mercury content 
* Permitting of pumped hydro depends on regional and local authorities with varying levels of staff and 
capacity. Processes are often done on paper, with lack of digitisation 
* Planning and permitting procedures: renewables are categorized as “overriding public interest”, explic-
itly excluding hydropower and thus PHS  

DA/ID markets: 
*Energy storage is able to participate in DA and ID markets 
* The general legal framework consists of three legislative pieces: the Energy Act (Ener-
giewirtschaftsgesetz - EnWG); the Renewable Energy Act (Erneuerbare Energien Gesetz - EEG); the 
Framework of the prequalification and the provision of the PRL: Eckpunkte Freiheitsgrade bei der Er-
bringung von Primärregelleistung 
* There is globally non-discriminatory market access (EEX/EPEX). In 2018 the EPEX energy exchange in-
troduced loop block orders, where two block orders are executed or rejected together, representing for 
example the storage cycle. 
* Electricity storage (pumped hydro and batteries) can individually or via aggregation participate in the 
electricity markets (threshold for direct participation of 1 MW) as long as storage is part of a nomination 
for which a balancing responsible party exists. 
* CHPs are using heat storage to take benefits of the electricity market price volatility; this option is in 
general economically more attractive than storing electricity 
* Network users increasingly combined PV systems with local storage, to increase self-consumption from 
30% to up to 80%, also driven by the low feed-in tariff for new PV installations  

Balancing market: 
* FCR cooperation project active, allowing for provision of FCR capacity by storage. 
(Framework of the prequalification and the provision of the PRL: Key points Degrees of freedom in the 
provision of primary balancing power). 
* Pumped hydro is eligible to provide also FRRa/FRRm services 
*No other information identified on storage not being eligible to participate in balancing markets 
*Design of some products not compliant Electricity Target Model including, max delivery period of 4 
hours (mFRR), validity period (aFRR & mFRR) & settlement rule (pay as bid aFRR & mFRR) 
* Compliant with Electricity Target model: max/min price limits & single pricing, single position 

* Transmission-level voltage control provision in 2020 was mandatory and non-remunerated 

Mechanisms to value distributed flexibility sources:  
*Local flexibility platforms & other initiatives: Small-assets to CM & aFRR (TSO & third party),  

* Pooling is allowed to fulfil prequalification requirements, The SOGL define the Requirements. Definition 
and Requirements for “Pool”, “Groupe” and Units are defined by TSO 

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Topic 

Germany - Policy description 

Value stacking of balancing products is possible; 

5. Grid Aspects 

* No double charging in 2020 for transmission-connected storage 
* Partially withdrawal charges to storage operators connected to the distribution grid.  

* The conditions for connection/access to the grids are regulated in: Technische Anschlussregel Mittel-
spannung VDE-AR-N-4110 & Technische Anschlussregel Hochspannung VDE-AR-N-4120 (Implementa-
tion Network Codes „Requirements for Generators“ (RfG)). 
* Since stored electricity taken off from the grid is considered as final consumption, in principle all final 
consumer levies must be paid for this offtake (incl. EEG surcharge, grid charges, others), and the charge 
applies a second time when the final consumer off-takes. But some exemptions apply: 
* Grid charges do not have to be paid for electricity that provides upward balancing energy in the bal-
ancing market. In this special case, there are no grid fees for withdrawal from the grid (injection fees 
don’t apply either because there are generally no injection fees in Germany. Depending on full load 
hours, the grid fee has to be at least 10, 15 or 20% of the 'normal' grid fee.  
* There are network charge reductions for customer with an exclusive usage of storage (not less than 
20% of yearly power price). 
* Grid-connected storage facilities are exempted from the grid charges for storage for 20 years after 
commissioning. This applies for pumped hydro storage plants commissioned from August 2011 (or for 
10 years when existing plants increased electrical capacity by at least 7,5% or storage capacity by at least 
5% after August 2011 (§118 (6) EnWG). 
* Hydrogen electrolysis plants, like electricity storage systems, are exempted from electricity grid charges 
for 20 years if they are connected to the grid by 4 August 2026 
* Unlike stationary electricity storage devices, storage in electric vehicles does not fall under exemption 
rules, full network charges are due. 
* There is a network tariff reduction for energy intensive customers (typically heavy industry customers) 
with energy consumption that exceeds 7 000 full load hours per year and 10 GWh. Depending on full 
load hours, the grid fee has to be at least 10, 15 or 20% of the normal grid fee 
* For industrial electricity users, the level of grid charges is largely determined by their peak load. To 
lower their peak offtake and related grid charges, electricity storage is often considered as an option. 
* A monthly instead of yearly capacity component is offered for final customers with a temporary peak 
electricity consumption 
* An individual tariff is available to final customers with a peak load not coinciding with system peak de-
mand. The individual tariff must not be lower than 20% of the published regular tariff. 
* NDP aligned with NECP: Various input parameters are defined in the scenario definition to facilitate 
goals, e.g. maximum CO2 emissions, installed renewable energy sources to meet "share of the electricity 
consumption" goals, number of electric vehicles. 
* PHS & other storage facilities (e.g. batteries) are not allowed to be included in network development 
plan.   
* From the public consultations stakeholders' comments are published 
* Not all DSOs prepare an NDP, data exchanges regarding scenario's and/or assumptions; consultation 
between the TSO and DSO 

* Storage is treated as final consumption and thus bears network charges, taxes and levies since 2009. 
The following exemptions apply: 
   * Battery electricity storage is regarded as a network component, and therefore not subject to the elec-
tricity consumption tax (StromStG §5, Abs. 4) 
   * Pumped hydro plants are considered generators. Generators are not subject to the electricity con-
sumption tax (StromStG §9, Abs. 1, Nr. 2 and StromStV §12, Abs. 1, Nr. 2) 
   * Electricity from storage fed into the network for balancing purposes (i.e. upward balancing energy) is 
exempt from the EEG surcharge, as the electricity is supplied to the balancing group. 
   * A storage facility according to the EEG is treated like an EEG installation. In order for a self-supply 
constellation to exist, there must be personal identity between the self-supply system, the storage plant 
and the consumption of the electricity 
   * Self-production plants are existing plants that have already generated electricity for self-production 
before 1 August 2014. These plants are currently exempt from the EEG surcharge. 
   * Self-consumption systems are all those installed from 1 August 2014. These plants must pay the full 
EEG surcharge, unless they are combined heat and power plants (CHP) or renewable energy plants (RE), 
or are not connected to the network. Rebates exist depending on the utilisation, use of biogas for self-
generation. E.g. Batteries and thermal storage which can prove with a costly measurement system that 
they only use renewable energy are exempted from levies for renewable energy (below 10 KWp). 

240 

6. Taxes & Levies 

 
 
 
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Topic 

Germany - Policy description 

   * The electricity consumed for the generation of green hydrogen has to pay fees, levies and taxes. The 
long-term stored hydrogen is charged again when it is used by the next end user. However, electricity 
used for power-to-gas is exempted from charges and levies if hydrogen is transformed directly into elec-
tricity again. In this case no state-imposed costs have to be paid. The difference in production costs plus 
state-imposed costs to other forms of hydrogen can exceed total investment costs. Green hydrogen 
costs about 6 Ct/KWh. If levies, fees and taxes apply the costs are increasing to 28 Ct/KWh. Hence, elec-
trolysers could be clearly defined as time buffer and facilitator for PtX in the energy law to get the state-
imposed costs down and attract investments. 
* Electricity storage is exempt from the EEG surcharge, if the storage facility fulfil §§60, 61 l EEG 2021, 
EEG-surcharge ends in 2022 in generally 
   * Electricity storage is exempt from the CHP-fee if the storage facility fulfils special restrictions of the 
KWKG 
   * Electricity storage is exempt from the offshore-wind-surcharge if the storage facility fulfils special re-
strictions of the EnWG 
   * Electricity storage is exempt from the industrial-switchable-surcharge if the storage facility fulfils spe-
cial restrictions of the AbLaV 
   * Electricity storage is exempt from the offshore-wind-surcharge if the storage facility fulfils special re-
strictions of the EnWG 

* The Electricity Tax Act defines stationary battery storage: 'a rechargeable storage for electrochemical-
based electricity that remains exclusively at its geographical location during operation, permanently con-
nected to the utility grid and not part of a vehicle. The geographic location is a point determined by ge-
ographic coordinates'. Charging of grid connected storage is free of electricity tax. 

* Network tariff exemption does not remove the obligation for storage facilities to pay some other regu-
latory charges not directly related to TSO activities. There is legal uncertainty as to whether the exemp-
tion from the network charges also applies to the concession fee and the levies that are charged. This 
concerns the CHP surcharge, the §19 surcharge and the offshore liability charge. 
* Delivery to a sister company in a corporation is not considered as self-supply according to the strict 
interpretation of § 61 EEG by the national regulator. 

7. Other & Gen-
eral 

8. Barriers 

9. Best practices 

* In the further development of the electricity market, balancing deviations will be more heavily pun-
ished, resulting in suppliers taking their customers under liability. Storage can then be part of the corpo-
rate strategy to avoid such deviations 

241 

 
 
 
 
EnTEC – Study on Energy Storage 

Greece 

Topic 

Greece - Policy description 

1. Public Support 

The NECP foresees the addition of approximately 2.7 GW of electrical storage capacity by 2030, split be-
tween around 1.4 GW in pumped hydro and 1.2 GW in batteries. Two explicitly named pump storage 
projects (one of which is a PCI project) are to be implemented by 2025. The NECP contains furthermore 
the following references to storage: 
* To achieve high levels of penetration of uncontrollable RES plants, as set out in the NECP, in an eco-
nomically rational way (sufficiently low cuts in their output), there is generally a need for energy storage. 
For several decades, pumped storage has been the most widespread international method for large-
scale storage of electricity. Today, international developments are rapid in terms of other forms of stor-
age, for large or small installations, especially for batteries of different kinds. The coupling of markets via 
interconnectors in accordance with the provisions of the new electricity market model is important for 
achieving high levels of penetration. There is also interest in power-to-gas (e.g. hydrogen) storage appli-
cations, in the context of which the interconnection of electricity and gas networks is also investigated. 
Moreover, given the international interconnections of the Greek mainland system, the investigation of 
the needs for storage and coverage thereof at a regional level may also prove efficient.  
* The full regulatory framework for the operation of storage systems in the electricity market will have 
been developed and it will be possible to develop these systems as part of generation units with simpli-
fied administrative procedures to authorise their operation by 2020. Already in the energy offsetting 
scheme, provision is made to operate storage systems exclusively for the storage of energy generated by 
self-generation RES systems and for its use by end consumers to meet their electricity needs at a later 
time. 
* As regards power generation in particular, RES will be the major domestic source of power as early as 
in the middle of the following decade, with a share exceeding 65% of the domestic power generation by 
2030, by utilising in the most cost-effective manner Greece’s high potential especially for wind and pho-
tovoltaic plants. A tool in this direction will be the full functioning of the new electricity market model, 
the simplification and speeding up of the licensing procedure, the digitisation of the energy system and 
the enhancement and expansion of energy infrastructures to allow for maximum RES penetration in 
power generation, focusing on storage systems, and in general the gradual electrification and the energy 
coupling of final consumption sectors to allow for maximum RES share in final energy consumption. An-
other priority is promoting electromobility, which will now rely heavily on RES power generation. 
* A further aim is to combine consumption sectors to the greatest and most efficient extent possible, 
placing emphasis on maximising the use of RES. The electrification of different uses in final consumption 
is an essential component in achieving this aim. A typical example is heat pumps which, together with 
the future greater use of energy storage systems and self-production schemes, will make a decisive con-
tribution in this direction. 
* At a technical level, it is also critical for the following period to develop an appropriate institutional 
framework for storage units and have them participate in the electricity market. The participation of 
these units is considered to be crucial for attaining high shares of RES in the electricity market. In this 
context, plans have to be made immediately also for making possible the deployment of storage units 
within a RES plant, using simplified procedures. 
* The main categories of flexibility sources are dispatchable power plants, storage, interconnections and 
demand response.  
* For islands that are not expected to be interconnected, a significant reduction in the use of diesel for 
power generation is also being promoted, with the setup of state-of-the-art RES plants combined with 
storage technologies  
* in RD&I, Transformation of the transport sector, to be achieved by reducing the cost of small-scale 
electricity storage technologies and of electromobility  
* the development of both centralised and decentralised storage units is expected to contribute towards 
the attainment of the goal of optimal integration of RES in electricity networks. 
* Storage systems are expected to play an important role in reducing RES cuts in the system as a whole, 
to address local congestion problems and to ensure more adequate capacity and better system flexibil-
ity. Combining RES plants with energy storage systems, i.e. where they share a common connection 
point (storage system installed behind the meter or at a point in the distribution network downstream 
the same point of connection with the high voltage system), can mitigate the impact of RES plants on 
system operation, smoothing out variations in generation, provided that there are no operating prob-
lems. 
* Both centralised and decentralised storage units require the development of a comprehensive regula-
tory and statutory framework for their operation in energy markets and their integration in electricity 
networks. 
*  The options for coupling the electricity and gas sectors (power-to-gas) through storage applications 
that include conversion of electricity into renewable gas, such as hydrogen, are equally important. The 

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Topic 

Greece - Policy description 

gas produced by using RES energy may be fed into the existing gas network and used as fuel for heating 
in buildings or in transport.  
* A key objective of centrally distributed storage systems is the development of storage units, including 
existing ones (Sfikia-Thisavros ~ 700 MW) and including projects of common interest (PCIs). The precise 
additional required power of storage systems, capacity, and technology of storage units will result from 
relevant studies that will be based on both the economic benefits they provide to the operation of the 
system and their contribution to power adequacy and flexibility of the System. 
* Policy measures to promote the installation of electricity storage systems may vary depending on the 
technology and type (centralised, dispersed) of the storage system (such as pumped storage projects in 
the area of Amfilochia and Amari, Crete). In particular, the promotion of centralised electricity storage 
systems is possible through the implementation of an appropriate purchasing mechanism, which will 
motivate the construction of storage systems over other electricity generation plants. 
* With regard to energy storage, measures will be taken to strengthen the development of new or im-
proved electricity or thermal energy storage technologies with higher efficiency, availability, durability, 
security and at the lowest cost. Support will be provided for electrochemical energy storage technolo-
gies, which relate primarily to RES applications for utilisation in non-interconnected electricity networks 
or in remote points in the electricity network. 
* The essential characteristics of the electricity generation system until 2030, in line with the objectives 
achievement scenario, the NECP indicates 1.4GW Power of new central storage systems (batteries) 

2. Permitting 

* Permitting process for hybrid facilities (cf. section 8 for hybrid facility definition) follows the same rules 
which apply for the renewable generation component of the station 

3. Energy Markets 
and Capacity 
Mechanisms 

DA/ID markets: 
*Energy storage is able to participate in DA and ID markets 
* Regulatory framework for active consumers to participate in ID & DA was not in place in 2020 

4. Ancillary Ser-
vices 

5. Grid Aspects 

Capacity mechanisms:  
*CM does not allow storage 

* The participation of front-of-the-meter storage facilities in the upcoming target model has not yet 
been announced 

Balancing market:  
* Regulatory framework for active consumers to participate in balancing markets was not in place in 
2020 
* Design of some products not compliant Electricity Target Model including aggregation of load not al-
lowed, validity period, settlement rule, activation rule 

* Storage not allowed in 2020 to provide transmission-level voltage control services 

* Electricity storage is not yet eligible to provide other ancillary services  

* No double charging in 2020 for transmission-connected storage 
* Withdrawal charges for prosumers connected to the distribution grid. 
* Stand-alone front-of-the-meter storage is not described as a specific asset in the network code and 
therefore should comply to the consumer and producer's rules. 
* Net metering for self-producers allows behind-the-meter storage. No injection to the network is al-
lowed, as defined by the regulatory framework (Law 4513/2018) and corresponding Ministry of Energy 
regulation 15084/382 (2019). 
* Content, targets and data of the NECP approved in December 2019 are taken into account. 
* PHS & other storage facilities (e.g. batteries) are allowed & included in network development plan.   
* From the public consultations stakeholders' comments and responses are published 
* Not all DSOs prepare an NDP; other alignment/joint activities DSO/TSO 

6. Taxes & Levies 

* No specific mention of electricity storage identified in the legislation, assumption is that charging is 
treated as consumption for the electricity consumption tax and levy purposes. 
* No information identified on absence of double taxation for energy storage, thus assume it exists 

7. Other & Gen-
eral 

* Storage is a necessary component in the definition of a hybrid installation. According to the national 
legislation (definition in Law 3468/2006), hybrid installation is one: 
  - Which uses at least one form of renewable energy source. 
  - Where the total energy which the hybrid installation consumed from the grid, should not exceed 30% 
of the overall energy which is stored, on a yearly basis. 
  - The maximum capacity of the renewable energy generation does not exceed 120% the storage capac-
ity. 

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8. Barriers 

9. Best practices 

* Support mechanisms for renewable electricity in islands addresses and remunerates hybrid installations 

244 

 
 
 
 
EnTEC – Study on Energy Storage 

Hungary 

Topic 

Hungary - Policy description 

1. Public Support 

2. Permitting 

The NECP refers to electricity storage 
* The construction of a new gas turbine power plant at the Mátra power plant site, which is particularly 
important for the security of supply in the Eastern part, is under investigation, is the construction of a 
new photovoltaic (PV) power plant and industrial energy storage unit, as well as the energy recovery of 
non-recoverable waste (RDF).The Mátra power plant site and/or the Northern Hungary region hosting it 
offers a good opportunity to carry out low carbon energy production and storage projects that can re-
lieve other areas of pressure 
* Short-term fluctuations in weather-dependent production can be offset today mainly by gas-fired 
power plants, but there should also be scope for the spread of new innovative solutions such as energy 
storage and demand response 
* The Energy Innovation Council (EIT) composed by the Minister for Innovation and Technology, the 
Hungarian energy and industrial companies, universities, research institutes, professional organisations, 
the Energy Regulator (MEKH) and several Ministers identified, among the options for intervention areas: 
Innovative System Balance (Flexibility Storage and Demand Management). 
* regarding the electricity market, it is essential that the domestic electricity system (including consum-
ers) has controllable capacities guaranteeing safe operation and balancing. (E.g.: generation capacities 
providing flexibility; new types of flexibility services, DSR solutions, energy storage) 
* As regards energy storage, Hungary intends to encourage the use of energy storage systems to inte-
grate renewable energy production. In order to ensure cost-effective integration of renewables, it will 
also be necessary to encourage the uptake of innovative technologies (energy storage, capacity building 
of existing network elements) and modes of operation (demand response). 
* The spread of seasonal electricity storage and battery storage, as well as grid developments and grids, 
will be supported from OPs and Modernisation Fund grants as of 2021 
* Investment in energy storage and micro-grid solutions (facilitating single-site operation of renewables 
and energy storage facilities with regulatory tools) should be encouraged. It is necessary to simplify the 
authorisation process and regulatory market accreditation of energy storages, to develop regulatory 
products making better use of the technical potential of storages (e.g. the introduction of artificial iner-
tia-type products), to promote innovative solutions in seasonal storage and to encourage the storage of 
heat by cogeneration producers. 
* In order to support the use of the necessary innovative solutions in seasonal energy storage, Hungary 
is also planning pilot projects: Converting excess electricity into heat and storing it in district heating sys-
tems using electric boilers; Development of optimal storage and use of electricity generated hydrogen 
* It is proposed to launch pilot projects on the distribution and transmission (DSO and TSO) side for en-
ergy storage systems 
* The creation of a complex pilot-sized research and development centre to test the systemic intercon-
nection of different renewable energy sources and energy storage technologies is desirable 
* The aim is to develop complex price regulation that encourages the use of innovative smart solutions 
and the market procurement of flexibility services (e.g. energy storage, demand response). 
* Sector coupling is accentuating when the processes of producing different forms of energy (electricity 
and heat as well as fuels) are interlinked. The gas market and the electricity market are already inter-
linked on a number of points. However, in the near future, sector coupling could also cover new areas, 
e.g. replacing gas-based heating/cooling with renewable-based electricity or heat pumps in regions with 
low-use infrastructure or not connected to the gas network. The convergence of energy systems is also 
facilitated by the development of energy storage technologies (e.g. battery, heat storage, power-to-gas). 
* In digitised energy systems, communication between generation, demand, storage and grid is becom-
ing faster 
* Priority is to improve innovation, with sub-focus on development of household and industrial scale en-
ergy storage technologies 
* Planned measure to develop household-scale small power plants combined with smart metering and 
electricity storage 
* The upcoming Energy Strategy will define the regulatory framework for among others electricity stor-
age in batteries 

* The regulator is the competent authority responsible for licensing of all generation facilities. In case of 
any future development e.g. pumped hydro, it would act as the licensing body. 
* The Hungarian Act 86/2007 on Electric Energy requires the authorisation for the operation of an elec-
tricity storage facility with a nominal output capacity of 0.5 MW or more 
* The Hungarian Act 86/2007 on Electric Energy indicates the provisions (including in secondary legisla-
tion) for the authorisation of power plants shall apply to electricity storage facilities, mutatis mutandis 

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Topic 

Hungary - Policy description 

3. Energy Markets 
and Capacity 
Mechanisms 

DA/ID markets: 
*Energy storage is able to participate in DA and ID markets 
* Legally, all markets are open for large and aggregated consumers, however participation is currently 
still limited. 
* Large consumers, retailers and aggregated consumers are allowed to participate in the Hungarian En-
ergy Exchange HUPX. However, in 2016 entrance was difficult, expensive and with liquidity problems. The 
combination of over-the-counter contracts and participation at the exchange was then common. 

Capacity mechanisms:  
NAP 

4. Ancillary Ser-
vices 

Balancing market: 
* Design of some products not compliant Electricity Target Model including min capacity (aFRR, mFRR), 
validity period, procurement lead time (88% month ahead), settlement rule 
* Aggregators are allowed to provide balancing services, as there is no special restriction or rules for ag-
gregation. 

5. Grid Aspects 

* Storage not allowed in 2020 to provide transmission-level voltage control services 

* Black start is remunerated by the TSO. If the gross installed capacity is more than 500 MW and the 
power plant is connected to the transmission grid, the service is mandatory. Some of the power plants 
are able to provide black start capability, but their gross installed capacities are less than 500 MW. 

* No double charging in 2020 for transmission-connected storage 
* withdrawal charges for other storage facilities (e.g. batteries) and prosumers connected to the distribu-
tion grid.  
* There is no specific legislation about tariff discounts, transformation losses, or other grid aspects. 
* The assumptions and targets of the NECP are important inputs for the NDP. 
* PHS & other storage facilities (e.g. batteries) are allowed to be included, however are not included in 
network development plan.   
* From the public consultations a summary of stakeholders' comments is published. 
* A single high voltage NDP; each DSO prepares a plan that is part of the all network development plan 
> 132 kV. 

6. Taxes & Levies 

* There is no specific taxation regulation for energy storage in Hungary. If energy storage is interpreted 
as consumption, it could be subject to electricity consumption taxes. 

7. Other & Gen-
eral 

8. Barriers 

* There is no specific electricity storage regulatory regime in Hungary 
* Hungarian Act 86/2007 on Electric Energy: ‘Electricity storage facility’ shall mean an equipment used for 
storing electricity by way of physical or chemical means, meaning that it converts and stores in-put elec-
tricity, then releases it back to the electricity system minus technical waste; 
* In essence, the current legal situation is that energy storage shares the legal role of generators and are 
handled by the regulator as such. 

* The National Energy Strategy 2030 provides negative signals as pumped hydro is deemed as not an 
adequate option. 
* All potential pumped hydro sites are located close to the River Danube and other environmentally sen-
sitive locations, which are Natura 2000 territories. On one such site the competent authority refused the 
necessary environmental license, later confirmed in court. 
* Storage is subject to double charging and to the electricity consumption tax. 
* Hungary requires the development of a regulatory regime for the participation of storage in energy, 
capacity and ancillary service markets. 
* The participation of storage in ancillary service markets is very limited, restricting the available revenue 
streams for storage projects. 

9. Best practices 

* Electrical energy act contains a definition of storage. 
* The government, regulator and system operators are actively exploring storage technologies, pilots 
and system integration. 

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EnTEC – Study on Energy Storage 

Ireland 

Topic 

Ireland - Policy description 

1. Public Support 

* The Climate Action Plan 2021 recognises the important role of electricity storage, in supporting the 
transformation of the electricity sector. Under Climate Action Plan 2021, the Department of the Environ-
ment, Climate and Communications has committed to developing a national electricity storage policy 
framework, which is due for publication in Q1 2023. 
 * To help inform this work, the Department will launch a public consultation in summer 2022. In addi-
tion, the Commission for Regulation of Utilities has committed to reviewing the regulatory treatment of 
storage in late 2023. 
* The Climate Action Plan 2021 also committed to increasing the share of renewables electricity up to 
80% by 2030.  
* In Climate Action Plan 2021, the Department committed to completing the second auction under the 
Renewable Electricity Support Scheme (RESS) in summer 2022. The final results of the auction were pub-
lished on 15th June 2022. The scheme has been adapted to support increased technological diversity, 
with provision to couple renewable generation with storage capability at project sites. Ireland also has a 
target of installing 5GW of offshore wind by 2030. The Climate Action Plan 2021 also commits to holding 
Ireland’s first ever Offshore Renewable Electricity Support Scheme auction in Q4 2022. 
 This will help to broaden the energy mix and enhance security of supply. 
* Addressing the challenges associated with the integration of large-scale storage technology will also 
be key as we move ever closer to full decarbonisation of the electricity sector. Building on our Climate 
Action Plan 2021 commitments, the Department of the Environment, Climate and Communications is 
currently finalising preparations for a public consultation on a Green Hydrogen Strategy. The strategy is 
due for delivery in Q3 this year and will outline the pathways towards the production of green hydrogen 
and its use in Ireland’s energy mix. 
* Ireland is a leader in terms of the level of BESS it is accommodating. We have 0.4 GW of BESS already 
connected to the grid, with an additional 0.5 GW contracted to connect, and a further 0.5 GW due to be 
contracted over the next 12 months. This totals 1.4 GW in comparison to our system peak of around 5.5 
GW, meaning BESS generation could meet 25% of our system peak within a few years.  
* In 2021 the Irish TSO published their roadmap for changes to the transmission network, the operation 
of the power system, and the power market, to make the grid ready to meet the 2030 targets. In their 
analysis to determine this roadmap we assumed up to 1700 MW of Battery Energy Storage would be in-
stalled in Ireland by 2030. Battery energy storage technologies are required in 2030 for reserve provision, 
capacity adequacy and to assist with congestion management. They assumed that the energy-to-power 
ratio of the battery fleet will increase over the period to 2030, with up to 550 MW of the installed battery 
storage having a long duration capability, i.e. an average duration of six hours 

Relevant references in the NECP 
* New efficient energy storage systems should be incentivised  
* R&I to focus on technologies at advanced readiness levels, prioritising energy storage technologies 
and solutions 
* Policies related to small scale battery storage should be developed to facilitate self-production; moreo-
ver a regional approach to strategically located battery storage facilities is suggested to alleviate pres-
sure on national grid 
* R&I to focus on technologies at advanced readiness levels, prioritising energy storage technologies 
and solutions 
* At the present only one large scale pumped hydro station energy storage facility is in operation (Tur-
lough Hill), however a large number of battery projects are in the process of connecting. Ireland has also 
supported the inclusion of the Silvermines Hydroelectric Pumped Storage facility on the EU’s Project of 
Common Interest List. The proposed development will provide 1.8GWh of storage with 360MW export 
capacity and 360MW of pumping load. Projects of Common Interest are key cross border infrastructure 
projects that link the energy systems of EU countries but can also include storage projects such as Silver-
mines. The project is on the 5th PCI list which was published last November. 
* "Construction of energy storage shall help the island sustainability." 

2. Permitting 

* The standard permitting rules for power generation plants apply to energy storage plants e.g. planning 
permission (which covers environmental issues), power generation licence and authorisation to con-
struct. The legislation does not differentiate between generation and storage technologies. 

3. Energy Markets 
and Capacity 
Mechanisms 

DA/ID markets: 
*Energy storage is able to participate in DA and ID markets 
Capacity mechanisms:  
* Multi-year capacity contracts in place, annual delivery period 

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Topic 

Ireland - Policy description 

4. Ancillary Ser-
vices 

5. Grid Aspects 

* Energy storage are allowed to participate in the Irish Capacity Remuneration Mechanism; the derating 
factors depend on the duration of storage being provided. The CRM offers additional revenues, which 
may have to be partly reimbursed if the market price exceeds the strike price in the contract 
(€500/MWh). 
* Developments in the area of sector coupling are at an early stage. Some companies provide a solution 
combining heating, cooling, electricity and energy storage 

Balancing market: 
*BESS can participate in the balancing market to some extent, and work is being undertaken to fully inte-
grate them.  
*Design of some products not compliant with Electricity Target Model for settlement rule (hybrid = sys-
tem services are regulated and balancing services marginal prices) (FCR, aFRR, mFRR, RR) 
* Max/min price limits not compliant with Electricity Target Model 
* Storage technologies can qualify to provide voltage support (the SSRP service), as listed in the DS3-
System-Services-Proven-Technology-Types.pdf (eirgridgroup.com). The SSRP service can be provided on 
either transmission or distribution level. This has been the case since the inception of the system services 
arrangements. 

New ancillary services: 
* FFR: Ireland & Northern Ireland by using conventional generators, CH, biomass, windfarms, batteries, 
flywheels, PHES, CAES, HVDC, AGU, DSUs, full activation time is 2s, required duration 8 s. Ireland (Eirgrid) 
& Northern Ireland (SONI) defined and procured inertial response products. Ireland & Northern Ireland 
use fast ramping products (1, 3 and 8 hours time horizon), sustained for durations of 2, 5 and 8 hours 
respectively.  

* Some ancillary services are currently a grid code requirement in terms of capability.  Units can also con-
tract under the DS3 System Service programme for availability payments for provision of these services, 
and also for the provision of non-obligatory services. The DS3 programme led by EirGrid (TSO) includes 
the development of an enhanced market for system services, System Services exist which cover both fre-
quency and voltage services, and are open to all technology providers. A separate DS3 fixed 6 years con-
tract for provision of 5 services (fast reserves with response provision within 300ms for a duration of 20 
mins) is also in place with a limited number of providers (110MW). The fixed 6 year contracts require a 
response within 300 ms and there is an incentive to respond within 150 ms. 

* Current DS3 arrangements are due to end in April 2024. The high level design decision for System Ser-
vices Future Arrangements (SSFA) was published by the SEM Committee in April 2022. 

* An Enduring Connection Policy (ECP) was published under which generators (including storage) can 
apply for a connection through annual batches (for all types of applications).  
* In addition, successful participation in the CRM has entitled BESS projects to a grid connection in spe-
cific circumstances. 
* Through ECP and the CRM, 0.9 GW of BESS capacity has been contracted for a grid connection, with 
0.4 GW already connected. An additional 0.5 GW is expected to be contracted over the next 12 months. 

* Currently, storage only pays ToU tariffs associated with its demand(MIC)/imported energy and not its 
export/MEC.Some of the transmission-connected pumped hydro storages are fully or partially exempted 
from withdrawal charges. Also, the Public Service Obligation charge (applied to all energy consumers in 
Ireland) which is based on Maximum Import Capacity (MIC) will only apply to the portion of the MIC re-
lated to house load when it is offline (i.e. neither importing or exporting) and not to the full MIC related 
to energy injection and absorption to/from the grid.  
* withdrawal charges for other storage facilities (e.g. batteries) and prosumers connected to the distribu-
tion grid.  
* PHS & other storage facilities (e.g. batteries) are allowed & included in network development plan.   
* The aspect of the network codes which currently applies to energy storage is a generic Power Park 
Module (PPM) code which was originally elaborated for wind generators. As with any new technology 
being incorporated onto the transmission system, it takes some time to gain operational experience, to 
enable understanding of the capability of the technology to comply with Grid Code and exactly what 
system services this new technology can offer, for the benefit of all users. With this in mind the TSO 
(EirGrid) has published a number of versions of the Battery Implementation Note; Grid Code modifica-
tions are expected to follow before the end of 2022. In the interim storage can seek temporary deroga-
tions from Grid Code, if required.   
* There is no net metering 

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Topic 

Ireland - Policy description 

6. Taxes & Levies 

* Public service obligation levies are charged only based on the house load consumption. The levy is cal-
culated on the basis of the Maximum Import Capacity (MIC). The Commission for Regulation of Utilities 
(CRU) determined in 2019 that the MIC for calculation of the PSO for energy storage plants was based 
on the MIC when importing at 'house load' (i.e. when neither importing or exporting).  

7. Other & Gen-
eral 

8. Barriers 

* Energy Storage has recently been defined in Irish legislation under statutory instrument 76 of 2022.  

“energy storage” means, in the electricity system, deferring the final use of electricity to a moment later 
than when it was generated, or the conversion of electrical energy into a form of energy which can be 
stored, the storing of such energy, and the subsequent reconversion of such energy into electrical en-
ergy or use as another energy carrier;”  

* Currently Energy Storage providers that are over 0.5MW are required to pay Demand Transmission use 
of system charges (D-TUoS). In addition, plants connected at distribution level will be subject to Distribu-
tion use of system charges (DUoS 
* The Use of System Charges rule places energy storage plants at competitive disadvantage to genera-
tion or distribution technologies. 
* As with any new technology being incorporated onto the transmission system, it takes some time to 
gain operational experience, to enable understanding of the capability of the technology to comply with 
Grid Code and exactly what system services this new technology can offer, for the benefit of all users. 
With this in mind the TSO (EirGrid) has published a number of versions of the Battery Implementation 
Note; Grid Code modifications are expected to follow before the end of 2022. In the interim storage can 
seek temporary derogations from Grid Code, if required 
* There is currently no market mechanism– on utilisation of storage devices to assist in congestion man-
agement/grid investment deferral. Congestion management is being considered for the future in the 
context of all technologies.  

9. Best practices 

* Public service obligation levy applies only to on-site consumption for storage. 

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EnTEC – Study on Energy Storage 

Italy 

Topic  Italy - Policy description 

1. Public Support  The NECP refers to electricity storage 

* With regard to the safety and flexibility of the electricity system, the promotion of a broad participation 
of all available resources — including accumulations, renewables and demand — will need to be taken 
into account for the transformation of the system induced by the increasing role of renewables and dis-
tributed generation, testing new architectures and management modes, including with the active role of 
TSOs. Similarly, it is necessary to take account of the essential need for storage systems, to avoid over-
generation from installations for the production of electricity from renewable sources 
* Support to the deployment of distributed storage systems 
* Bundling of generating facilities including together with storage systems, and demand units for access 
to services markets 
* It also aims to promote the deployment and use of energy storage systems, including electric vehicles, 
including long-term accumulation, and the integration of the electricity system with gas and water sys-
tems 
* Among the most stressed topics in the sections on electric RES include positions expressed in favour of 
self-consumption, including in a collective form by enabling multi-user configurations within energy 
communities; the main arguments highlighted are the promotion of demand and supply aggregators in 
the PPPs and the development of an enabling environment for the full development of storage technol-
ogies, especially through pumped storage and batteries, but without neglecting the new borders of 
power to gas 
* The realisation of a large storage capacity, and storage solutions involving the use of alternative energy 
carriers (synthetic hydrogen/methane), is concentrated in the service of the network, is also indispensa-
ble in order to mitigate some problems and have appropriate flexibility resources 
* A further objective relates to the important development of the storage capacity, which will be gradu-
ally but increasingly addressed to “energy intensive” solutions, in order to limit the phenomenon of 
overgeneration and to support the achievement of the targets for the consumption of renewable energy. 
In this regard, Italy adopted a new legal framework through the legislative n. 210/2021, transposing the 
directive UE 2019/944, in order to promote, according to a specific market mechanism, investments in 
new storage capacity to be allocated to market operators. 
* For the coming years, it is also necessary to pursue a significant development of electrochemical stor-
age 
* it has been estimated that in the medium term (around 2023) new storage systems for almost 
1.000 MW in production are in production, between hydro and electrochemical 
* It is of particular interest to be the synthesis of hydrogen from excess renewable electricity to be used 
for the purposes of storage or entry in gas networks 
* The potential for thermal energy storage technologies, especially high-efficiency cogeneration systems 
and district heating networks, will also be considered 
* In summary, the objectives for the energy security of the electricity system and its quantification are: 
new storage systems installed for at least 6 GW by 2030 
* Increasing the flexibility of the system is certainly one of the national targets for the internal energy 
market. It will be pursued both by making the existing thermoelectric power park more flexible and, 
above all, by extending market participation to new, flexible resources. These identify aggregation and 
demand response, the better involvement of distributed and renewable generation not programmable 
to services markets and the development of new storage systems 
* Development of storage systems, including thermal, electrochemical and power to gas, and their inter-
faces with networks, to ensure high levels of penetration of non-programmable renewables 
* Where self-consumed energy exceeds 40% of output, a specific premium is provided, which can also 
drive the deployment of storage systems 
* Legislative Decree No 102/2014 introduced the possibility to create aggregates of demand response, 
generating installations, including together with storage systems and vehicle-to-grids applications, al-
lowed to participate to ancillary services markets; to this regards several pilot projects have been imple-
mented so far with the aim to establish a more organic regulatory framework. 
* The sector on which Italy was relatively more active in electrical power in 2016, from an innovative per-
spective, is energy storage (one fifth of the total), but also photovoltaics and wind, which together at-
tract 37% of the innovations produced in Italy, mainly from Lombardy and Lazio. 

2. Permitting  * Specific permitting rules for electrochemical storage have been introduced in 2020 (as from the Law 
Decree No. 76/2020), also providing for significant simplification. Storage systems are subject to differ-
ent authorisation procedures depending on the location of the storage system (e.g., non-industrial area 
or quarry areas), the power and type of plants to which the storage is connected. For pumped hydro 
storage permitting rule as for RES are applicable. 

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Topic  Italy - Policy description 

3. Energy Markets 
and Capacity 
Mechanisms 

DA/ID markets: 
* Energy storage is able to participate in DA and ID markets 
* The Italian energy markets do not specify the system actors which are able to participate, thus not 
blocking storage. However, the Italian wholesale energy markets do not have specific linked or loop 
block orders to allow tailored bids by storage. 

Capacity mechanisms:  
* The Italian Capacity Market (CM) is open to all technologies (Thermal Plants, RES, DSR, storage sys-
tems). Both existing and new capacity can take part to the auctions: contracted capacity will receive an 
annual premium (€/MW/year) and it will have to be offered to the market (either spot energy markets or 
ancillary service markets).  
However, whilst existing capacity can only sign a 1-year contract, new capacity (i.e. new or heavily-refur-
bished facilities) can opt for a 15-year contract, provided that investment costs are above a threshold 
defined by the NRA.  

* The legislative decree n. 210/2021 has called for the Regulator to strengthen and promote the devel-
opment of aggregations, including ones independent from the suppliers. 

* As previously stated, storage systems can participate in the Italian CM. In the latest auction (delivery 
period 2024), 1.12GW of available capacity (i.e. Capacità Disponibile in Probabilità, CDP) was provided by 
new storage systems, with an average duration (i.e. an energy-to-power ratio) of around 4 hours. 

* The legislative decree n. 199/2021, transposing the directive EU 2018/2001, introduced a process for 
the phase out of the « scambio sul posto » mechanism and to promote the development of storage sys-
tems in combination with the RES plants 
* Most behind-the-meter storage installed in Italy (and concentrated in the Lombardy region) is for in-
creasing self-consumption of renewables. 

Scheduling phase and Balancing market: 
* Storage units of at least 10 MW and with specified technical performances are required to participate 
in the Italian Ancillary Services Market (both scheduling phase and balancing market) as single produc-
tion unit 
*Storage units participating in the Ancillary Services Market participate also in the RR Platform as re-
ferred to in Trans European Replacement Reserves Exchange (TERRE) in place for exchange of balancing 
energy from replacement reserves. 
* Storage units participate in the ancillary services market (secondary reserve, tertiary reserve, relief of 
intra-zonal congestions, real-time balancing) as UVAM (mixed aggregated virtual power plants) if they 
are smaller than 10 MW.  
* The Fast Reserve project for the procurement of rapid FCR (under 1 s) by production and non-conven-
tional resources was approved in 2020, with a first delivery period for 2023-2027. The size of each FRU 
must be over 5 MW. 
* The UPI project has been implemented by the TSO Terna, allowing the procurement of primary fre-
quency regulation services from power plants above 10 MW with storage systems. 
* Max price limit compliant with Electricity Target Model 

4. Ancillary Ser-
vices 

Mechanisms to value distributed flexibility sources: 
*UVAM 
*Local flexibility platforms & other initiatives: EQUIGY ; Platone 

5. Grid Aspects  * No double charging in 2020 for transmission-connected storage 

* Withdrawal charges applied to prosumers connected to the distribution grid, however, not to other 
storage providers.   
* ARERA regulation 574/2014/R/eel updated the connection and access rules to include  
energy storage. Tariff discounts for withdrawal from pumped hydro are extended to all electricity stor-
age technologies, as long as energy is not intended for final consumption. This means that hybrid con-
figurations of storage system also combining consumption assets are not eligible for the discount. Hy-
brid generation + storage assets are classified as generation, and energy offtakes by these hybrid assets 
are differentiated between withdrawals intended for powering storage (treated as negative energy input) 
and withdrawal intended for powering the auxiliary generation (treated as withdrawals). In either case, 
consumption by hybrid generation + storage assets for ultimately providing system services is exempt 
from grid charges. 
* ARERA regulation 109/2021/R eel defines the rules for the extension of the exemption on transmission 
and distribution grid charges to complex configurations such as the combination of consumption and 

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Topic  Italy - Policy description 

storage. The ARERA scheme is that all electricity drawn from the grid and intended to power the storage 
systems for subsequent re-injection in the network and / or the auxiliary generation services should be 
treated as negative electricity input for determining tariffs. This would apply also to cases such as aggre-
gated assets or vehicle-to-grid. 
* ARERA, on August 4, 2021, issued a further resolution 352/2021/R/eel proposing the launch of pilot 
projects for the procurement and remuneration of local ancillary services, with the aim of assessing the 
most appropriate negotiating solutions for all Italian DSOs. The services could be provided by any kind 
of DER, including energy storage facility operators and aggregators, on the basis of non-discriminatory 
clauses allowing the widest possible participation, with a view to technological neutrality. The resolution 
was then confirmed by new legal provisions with the legislative decree n. 210/2021 providing for new 
functions and responsibilities by the DSOs that comprise procedures in cooperation with the TSO  to fa-
cilitate the participation to the ancillary service markets of all resources connected to the distribution 
grid and to procure local services for the security of their networks.  
* According to art. 38-ter of the connection network code (TICA), when storage has the same economic 
conditions and procedures as for high efficiency combined-heat-and-power plants, it still has to pay the 
connection charge. 
* The Italian NECP was partly taken into account when preparing the draft NDP 2020. One scenario was 
developed (although only for the study years 2025 and 2030, not 2040) with assumptions coming from 
the NECP. 
* PHS not allowed to be included in network development plan & other energy storage facilities (e.g. 
batteries) are allowed, however are not included.  
* Introduction of additional public consultations in the process of scenario 
preparation in Italy and introduction of two additional public consultations (which are completed) re-
garding the infrastructure needs assessment (target capacity methodology and target capacity report); 
Published stakeholders' comments and responses 
* Currently, not all DSOs prepare an NDP, data exchanges regarding scenario's and/or assumptions. In 
this regard, the legislative decree n. 210/2019, transposing the directive (UE) 2019/944, introduced an 
obligation on DSOs to prepare a specific NDP also accounting for the flexibility needs of its network. 

6. Taxes & Levies  * The Italian tax authority confirms the installation of a storage system with residential PV does allow de-
ducting the appropriate costs for tax purposes, irrespective of whether the storage system was installed 
together or after the PV system (Circular Letter No. 7/E of 2018). In addition, in the 2019 the Italian tax 
authority published the circular n. 13/E which forbids the detaxation for residential storage device if PV 
plant receives subsidies in the Conto Energia. 
* The 2020 Italian Budget Law 160/2019 includes tax credits for new high-tech assets, qualifying under 
the Industry 4.0 Plan. Credits amount to 40% for investments up to €2.5 million and 20% for investments 
from €2.5 to €10 million.  
* Self-consumed stored energy is exempt from taxes. No other specific mention of electricity storage 
identified in the legislation, thus other storage is treated as consumption for the electricity consumption 
tax and other levy purposes. 

7. Other & Gen-
eral 

* Regulatory decision 574/2014/R/eel: A storage system is a set of devices able to absorb and release 
electric energy, foreseen to work continuously in parallel to the grid or able to modify the energy ex-
change with the electricity grid. The storage system may or may not be integrated with a generating 
plant. Systems that enter into function only in emergency conditions like during a black out are not con-
sidered to be a storage system. 

8. Barriers  * Further information is needed on ancillary services are needed to develop a storage business plan 

based not only on the energy market. 

9. Best practices  * The Italian tax authority clarified tax rules, confirming the installation of a storage system with residen-
tial PV does allow deducting the appropriate costs for tax purposes, if the residential PV plant does not 
receive subsidies in Conto Energia. 
* GSE (the authority managing the payment of incentives) confirmed and regulated the installation of a 
storage system in an existing PV power plant receiving subsidies, in order to remove uncertainties. 

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EnTEC – Study on Energy Storage 

Latvia 

Topic 

Latvia - Policy description 

1. Public Support 

The NECP refers to electricity storage 
* The NECP indicates the Latvian Innovation Fund should cover a wide range of projects beginning in 
2020, including innovative renewable energy and energy storage technology projects. 

2. Permitting 

* There are no specific requirements for permitting of storage facilities in national policies. Access per-
mits are issued by the Ministry of Economics, while access to the grid is subject to technical regulations 
issued by TSOs or DSOs. Requirements in regulations are the same as for other infrastructure. 

3. Energy Markets 
and Capacity 
Mechanisms 

DA/ID markets: 
*Energy storage is able to participate in DA and ID markets 
* Regulatory framework for active consumers to participate in ID & DA was not in place in 2020 

4. Ancillary Ser-
vices 

5. Grid Aspects 

Capacity mechanisms:  
*NAP 

* In 2013, the Nord Pool power exchange started operations in Latvia. Nord Pool day ahead and intraday 
markets are open to storage. The day ahead products include hourly and block orders, while the intraday 
market offers 15-minute, 30-minute, hourly and block products.  
* Storage for consumer energy management (e.g. peak shaving) and from electric vehicle integration is 
not developed in Latvia. 
* Planned heat storage within Riga CHP-2 plant will increase flexibility provision significantly. 

Balancing market: 
* The Latvian Regulatory Authority approved amendments to the National Network Code in line with EU 
Regulation 2017/2195, stating that energy storage companies may participate in the provision of a bal-
ancing service. 
* In 2018, the Baltic common balancing market came in operation, covering mFRR. Storage is allowed to 
provide mFRR services. For mFRR the product duration is 15 min, the minimum bid size is 1MW. 
* Currently, only FRR is used in the Baltic balancing market. The Russian Unified Power System (UPS) pro-
vides FCR and FRRa, while Baltic TSOs also provide RR 
* Regulatory framework for active consumers to participate in balancing markets was not in place in 
2020 
* Not open for independent aggregators in 2020 
* Design of some products not compliant with Electricity Target Model including:  max delivery period 
(mFRR), validity period, length of balancing contracts 
* Not compliant with Electricity Target Model: max price limit, no min price limit implemented 
* Single pricing, single position compliant with Electricity Target model 

* Storage not allowed in 2020 to provide transmission-level voltage control services 

Mechanisms to value distributed flexibility sources: 
*Local flexibility platforms & other initiatives: INTERRFACE (T/DSO) 

* No double charging in 2020 for transmission-connected storage 
* Withdrawal charges for prosumers connected to the distribution grid.  
* Net metering for renewable energy installations with a small-scale connection (under 3*16A amperage) 
was instituted in 2017 in the Electricity Market Law. 
* There are no specific rules for energy storage facilities to connect and access electricity grid. Storage 
facilities are considered as generators when supplying power to the grid and as consumers when con-
suming power from the grid. 
* The NDP was set taking into account the NECP. In addition to the assessment of the progress in the 
implementation of the plan, twice during the planning period (in 2024 and 2028), an environmental 
monitoring report will be prepared and submitted to the State Environmental Monitoring Bureau. 
* PHS not allowed to be included in network development plan, other energy storage facilities (e.g. bat-
teries) are allowed & included.  
* From the public consultations the stakeholders' comments and responses are published. 

6. Taxes & Levies 

* No specific mention of electricity storage identified in the legislation, assumption is that charging is 
treated as consumption for the electricity consumption tax and levy purposes. 

7. Other & Gen-
eral 

* Energy storage is not defined in the national regulatory framework. 

8. Barriers 

* There is no regulatory framework for storage in Latvia. 

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Topic 

Latvia - Policy description 

* Grid and taxation aspects (double charging of network tariffs, net metering for renewable energy pro-
ducers with small connections) limit the business case for storage, front- and behind-the-meter. 

9. Best practices 

* The Baltic states implemented the Baltic common balancing market, with storage being able to provide 
the first product, mFRR. 

Lithuania 

Topic 

Lithuania - Policy description 

1. Public Support 

The NECP refers to electricity storage: 
* Lithuania plans to reach by 2030 45%.RES target in final energy consumption. Therefore, investments in 
smart energy systems, including transmission, distribution and storage infrastructure, and in increasing 
the required balancing capacity are envisaged in order to successfully integrate larger volumes of renew-
able energy and a large number of electricity-generating customers 
* In addition, Lithuania’s 2021-2027 operational programme for investments from the European Union 
funds is directly linked to the implementation of the Commission’s recommendations, with a view to al-
locating EU funds investments to such tasks, such as: developing smart energy systems and grids, as well 
as local energy storage solutions 
* The planned capacity mechanism will be technologically neutral, as it will be open not only to electric-
ity generation but also to existing and future electricity installations to be installed (built) by the partici-
pants in the capacity auction before the start of the capacity delivery period, but also to installations 
managed by storage and independent electricity demand aggregators. 
* Objectives set out in the National Energy Independence Strategy, with, among the priority axes for en-
ergy research and experimental development: Development and integration into the grid of new tech-
nologies for low greenhouse gas emissions and ambient air pollutants that are resilient to climate 
change changes in energy production and storage; and integration into the EU’s strategic value chains 
* Promote the production of electricity storage technologies by attracting investment in the production 
of these technologies in Lithuania 
* Financing the deployment and storage of RES energy generation solutions 
* The generating customer shall be given the opportunity to ‘store’ the electricity produced by him and 
not consumed by him for his own use in the electricity networks between 1 April of the current year and 
31 March of the following year. The producer shall pay a network access charge for the amount of elec-
tricity that he has ‘stored’ and recovered from the electricity networks378. The amount of electricity sup-
plied to the electricity grid in excess of the electricity consumed by the customer during the storage pe-
riod shall not be carried forward to the next storage period 
* It is envisaged that the ‘prosumer’ scheme will continue until April 2040 by granting the right to “stor-
age” electricity produced and not consumed by the economy in the electricity networks 
* In addition to the smart meter, it is also planned to introduce a smart metering system for meter man-
agement; reliable data collection, storage and analysis 
* Financing of energy security projects (with CEF): Field and infrastructure studies for the Kruonis 
pumped storage plant (Kruoni HAE) 
* Litgrid is currently carrying out a pilot battery project to check the availability of battery storage sys-
tems under realistic operating conditions of the Lithuanian electricity system. Battery storage systems 
can contribute to maintaining the required level of inertia (synthetic inertia function) and to ensuring 
very rapid reserves of regulatory powers, which would contribute to improving system adequacy in prep-
aration for synchronous work with continental European networks 
* Promote the integration of electricity storage facilities and services into the electricity market 
* Consumers will be able to consume, store and sell self-generated electricity to the market and partici-
pate in all electricity markets and contribute to increasing the flexibility of the electricity system through 
energy storage. 
* The Action Plan for the implementation of the National Energy Independence Strategy includes policy 
measures in the research, innovation and competitiveness sector up to 2030: Develop and implement a 
common data storage and exchange platform 
* The funds allocated to Lithuania in the Modernisation Fund would be used for the modernisation of 
energy systems, the deployment of energy storage solutions in both district heating and electricity trans-
mission and distribution networks in order to integrate the planned ambitious RES levels 

378  https://www.vert.lt/atsinaujinantys-istekliai/Puslapiai/elektros-energija-gaminanciu-vartotoju-naudojimosi-elektros-tinklais- 

Service-prices.aspx  

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EnTEC – Study on Energy Storage 

Topic 

Lithuania - Policy description 

* Planned policy measures for RES in the electricity sector up to 2030: AEI8. Financing of RES energy de-
ployment and storage solutions, including prosumers, RES Communities (EU support) ; AEI19. Promote 
the use of RES for CHP heat generation by assessing the potential of solar technologies, heat pumps and 
heat storage in CHP systems;  
* Planned market integration policies up to 2030: ERC26. Promote market integration of energy storage 
facilities and services; ERC28. Kruoni pump-storage plants (KHAE) implementation of the construction 
project for Unit 5 
* The Ministry of energy actions on 'improvement of power generation infrastructure, energy distribution 
networks and energy storage' forecast as a cross-cutting adaptation policy for 2021-2030 with EU funds, 
but no budget is indicated. 

2. Permitting 

* No specific measures or requirements for permitting of storage facilities identified in national legisla-
tion. 

3. Energy Markets 
and Capacity 
Mechanisms 

DA/ID markets: 
*Energy storage is able to participate in DA and ID markets 
* Regulatory framework for active consumers to participate in ID & DA was not in place in 2020 

4. Ancillary Ser-
vices 

5. Grid Aspects 

Capacity mechanisms:  
*NAP 

* In 2012-2013, the Nord Pool power exchange started operations in Lithuania. Nord Pool day ahead and 
intraday markets are open to storage. The day ahead products include hourly and block orders, while the 
intraday market offers 15-minute, 30-minute, hourly and block products.  
* The 2017 Law on Necessary Measures against the Threats Posed by Unsafe Nuclear Power Plants in 
Third Countries stipulates that the Lithuanian electricity storage facilities (Kruonis Pumped Storage Hy-
droelectric Plant) cannot be used for storing electricity generated by unsafe nuclear power plants in third 
countries. 
* The Lithuanian CRM is technology-neutral and thus allows for the participation of storage and DSM. A 
consultation was closed in February 2019 and the first auction is forecasted to take place by March 2020. 
* The Kruonis pumped hydro plant has a significant role in the Lithuanian power system. 

Balancing market: 
* In January 2018, the Baltic common balancing market came in operation, covering mFRR. Storage is 
allowed to provide mFRR services. For mFRR the product duration is 15 min, the minimum bid size is 
1MW. The ENTSO-E ancillary systems survey of 2018 however indicates only pumped hydro is eligible to 
provide FRRm to TSOs, while batteries are not yet eligible to provide AS. 
* Currently only FRR is used in the Baltic balancing market. The Russian Unified Power System (UPS) pro-
vides FCR and FRRa, while Baltic TSOs also provide RR. 
* Energy Cells (a publicly-owned subsidiary) contracted 200 MW of battery storage to provide islanded 
operation in phase I of the project (until 2025) until the Baltic countries are synchronised with the Conti-
nental Europe Area and also balancing and synthetic inertia in phase II (post-2025). 
* Regulatory framework for active consumers to participate in balancing markets was not in place in 
2020 
* Design of some products not compliant with Electricity Target Model including max delivery period 60 
minutes (mFRR), validity period, length balancing contract, max/min price limits 
* Single pricing, single position compliant with Electricity Target Model 
* Storage not allowed in 2020 to provide transmission-level voltage control services 

* No double charging in 2020 for transmission-connected storage 
* injection & withdrawal charges for prosumers connected to the distribution grid.  
* Baltic synchronisation project 
   * The political roadmap on the synchronisation of the Baltic States to the Continental Europe electricity 
network is from 2019. Studies performed by the Baltic and Polish TSOs decide on how to provide regu-
lating power from HVDC links, where battery systems were identified as a viable alternative to frequency 
regulation by HVDC systems. Final investment decisions are not due in the next years while the technical 
capabilities of large battery systems are not proven, but preparatory steps are being taken. 
   * The Connection Agreement foresees additional studies with battery system suppliers regarding sev-
eral technical and economic analysis on such a battery system. 
* The NDP took into account the NECP. For example, it considered future development of renewable en-
ergy resources. The TSO also planned to introduce new environmentally friendly technologies and 
equipment, leading to energy savings. 
* PHS and energy storage facilities (e.g. batteries) are allowed to be included in the network develop-
ment plan, however are not included.  

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Topic 

Lithuania - Policy description 

6. Taxes & Levies 

* No specific mention of electricity storage identified in the legislation, assumption is that charging is 
treated as consumption for the electricity consumption tax and levy purposes. 

7. Other & Gen-
eral 

8. Barriers 

9. Best practices 

* The Baltic states implemented the Baltic common balancing market, with storage being able to provide 
the first product, mFRR. 

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EnTEC – Study on Energy Storage 

Luxembourg 

Topic 

Luxembourg - Policy description 

1. Public Support 

There are mentions to storage in the NECP: 
* Luxembourg intends to become a pioneer for the successful implementation of a large-scale nation-
wide energy transition. Sustainable and energy efficient buildings with local flexibility options and/or en-
ergy storage capacity, as well as sustainable mobility components (smart grids) will form the main pillars 
of this system 
* Lists decentralised storage and flexibility options as cornerstone for future developments. 

2. Permitting 

* There are currently no specific permitting rules applied to storage devices. The draft revision of the law 
on the organisation of the electricity market authorises all end users to own and operate energy storage 
devices within certain technical limits. 

3. Energy Markets 
and Capacity 
Mechanisms 

DA/ID markets: 
*Energy storage is able to participate in DA and ID markets 
* Regulatory framework for active consumers to participate in ID & DA was not in place in 2020 

Capacity mechanisms:  
*NAP 

* For the time being, the role of energy storage in consumer energy management is negligible. The new 
legal provisions on self-consumption and energy communities might lead to an accelerated develop-
ment. 
* The “Vianden Pumped Storage Plant”, one of the largest in its kind in Europe, is located in the Grand-
Duchy of Luxembourg with a capacity of 1,3 GW and approx. 5.000 MWh. Owned and operated by the 
Société Electrique de l'Our S.A., it contributes significantly to the flexibility and reliability of the electricity 
system in the greater region. 
* Heat storage capacities used for the operation e.g. district heating systems do not play an important 
role in Luxembourg and none of those contributes to the flexibility needs in the electricity sector. 

Balancing market: 
* Ancillary services for the Luxembourg grid area are procured by the German TSO Amprion on behalf of 
the Luxembourg TSO Creos due to the fact that they are in the same LFC area. Conditions are settled in a 
service contract. Mechanisms were being developed to fully enable assets in Luxembourg to participate 
in these procurement processes. 
* No information identified on storage not being eligible to participate in balancing markets 
* Regulatory framework for active consumers to participate in balancing markets was not in place in 
2020 
* Design of some products not compliant with Electricity Target Model including aggregation of load not 
allowed, procurement lead times 
* Compliant with Electricity Target Model: max/min price limits 

* No double charging in 2020 for transmission-connected storage 
* injection & withdrawal charges for other storage facilities (e.g. batteries) & prosumers connected to the 
distribution grid.  
* There are no specific provisions that apply to the grid connection and access rules of energy storage 
facilities. 
* Consumption of self-produced electricity from renewable energies involving storage devices is exempt 
from the variable grid tariff, however, a fixed capacity fee is still due 
* The NDP takes into account the NECP. 
* PHS and other energy storage facilities (e.g. batteries) are not allowed to be included in network devel-
opment plan.  
* Regarding public consultations; only the scenario development part of the NDP is consulted by the 
TSO 
* Regarding TSO/DSO coordination NDPs: other alignment/joint activities DSO/TSO 

* According to the legislative framework, 'the energy consumption used for storage purposes' and 'the 
energy consumption used to produce electricity or used to maintain the capacity to produce electricity' 
is exempt of the electricity consumption tax. 
* Self-consumption - with or without storage devices - is exempt from the renewable levies 

4. Ancillary Ser-
vices 

5. Grid Aspects 

6. Taxes & Levies 

7. Other & Gen-
eral 

8. Barriers 

* Full market access of assets to all ancillary service procurements, also see 4. 

9. Best practices 

257 

 
 
 
 
 
EnTEC – Study on Energy Storage 

Malta 

Topic 

Malta - Policy description 

1. Public Support 

The NECP refers to electricity storage: 
* key policies and measures regarding Energy Security in the context of the long-term objective of de-
carbonisation of the energy system and increased deployment of RES, will address Energy storage solu-
tions and demand management  
* The importance of utility battery storage systems for security of supply reasons was also raised during 
the public consultation process 
* Ensuring system stability will either require significant spinning capacity, utility scale battery storage or 
flexible balancing services over the electricity interconnector with Sicily. However, the latter is limited to 
200MW (the capacity of the interconnector) and would in practice be lower if already meeting part of 
the load 
* Currently, Malta has no utility scale battery storage facilities, and keeping large spinning capacity is 
highly inefficient and may not be technically viable at all times 
* Increasing the flexibility of the national energy system, including through the roll-out of cost-effective, 
innovative solutions such as storage  
* The Government will continue to assess innovative, viable and cost-effective solutions tailored to the 
specificities of Malta’s energy system, such as the deployment of energy storage solutions, which would 
incorporate aspects related to increased RES generation  
* RES electricity in Malta is almost exclusively generated from photovoltaic systems with no storage ca-
pability and significant intermittency caused by highly variable and localized cloud cover. 
* Support for additional PV capacity shall also be aligned with the exigencies of a stable grid and shall 
consider options which facilitate the integration of battery storage. This promises to provide several ben-
efits, including mitigation of overvoltage on the LV network, peak shaving, increased self-consumption 
and demand management. However, this depends significantly on the availability of storage solutions at 
an appropriate price point, such that any Government intervention can yield the desired results. 
* Battery storage. As of 2020, a pilot scheme supporting the integration of battery storage with PV sys-
tems will be launched. Early adopters of solar PVs whose feed-in-tariff has expired will be eligible to re-
ceive a 25% grant (capped at €1,000) against the purchase of a battery system for the storage of renew-
able energy and therefore increase the share of self-consumption. A preliminary study was conducted in 
2019 to assess the feasibility of such a measure; the pilot project will feed into this continuing assess-
ment. It is likely that a large-scale roll-out of battery storage systems for households, PV-integrated or 
stand-alone, would require a significantly higher level of support or lower cost of storage than at pre-
sent. In this regards Malta shall be seeking EU funds (including Cohesion funds) to bridge the gap 
* The Government is closely monitoring the development of the energy storage market considered es-
sential for further deployment of photovoltaic capacity and for optimisation of the power system by 
providing for demand management and peak demand shaving 
* It’s important to note that the range of storage solutions which could be successfully implemented in 
Malta is also limited. For instance, the predominant large-scale energy storage solutions, such as 
pumped-storage hydropower are not available in the Maltese context 
* Enemalta is required to apply economic dispatch which would also include aggregation, demand re-
sponse and storage subject to technical requirements 
* Utility scale battery storage is being studied not only for security of supply reasons, but also with re-
spect to grid stability considerations, which is currently one of the barriers limiting Malta’s renewable en-
ergy potential post-2020. Investments in storage infrastructure will facilitate further deployment of re-
newable energy  
* Enemalta will monitor the development of the energy storage market. 

2. Permitting 

* There are no specific permitting requirements for storage nor clarity on whether it would be consid-
ered as generation. This was one of the reasons for a project not to connect to the grid while testing. In 
terms of the Electricity Regulations (S.L.545.34) which transpose Directive 2019/944, energy storage must 
be notified to the Regulator. The notification of storage is required after connection to the grid. 

3. Energy Markets 
and Capacity 
Mechanisms 

DA/ID markets: 
* There is no liquid wholesale market in Malta. 

Capacity mechanisms:  
*NAP 

4. Ancillary Ser-
vices 

5. Grid Aspects 

Balancing market: 
* Balancing in Malta is conducted by the DSO in coordination with the Italian TSO. Only the DSO has bal-
ancing responsibility in Malta 

* no injection charges for prosumers connected to the distribution grid, however, MS does apply with-
drawal charges for prosumers.  

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Topic 

Malta - Policy description 

* Since 2010 there is no net metering scheme in Malta, as it was substituted by a feed-in tariff. 
*Network tariffs are partly covered through all inclusive retail tariffs which are charged only on units con-
sumed from the grid. Consumers pay a fixed charge as consumption point and not related to existence 
of storage or otherwise 

6. Taxes & Levies 

* No specific mention of electricity storage identified in the legislation, and thus charging from the grid 
is treated as consumption for the electricity consumption tax and levy purposes. 

7. Other & Gen-
eral 

8. Barriers 

 * Energy storage is defined in the Electricity Regulation (S.L.545.34) 

* There is currently no regulatory framework for electricity storage in Malta, which overall represents an 
important barrier and requires a case-by-case approach, resulting in significant uncertainty. 
*  The absence of a liquid wholesale market in Malta generally forecloses the participation of storage in 
energy markets. 
* Technical requirements to connect storage to the grid are catered for by the Electrical Installations 
Regulations (S.L.545.24) 

9. Best practices 

* R&I policies already address energy storage projects/technologies. 

259 

 
 
 
EnTEC – Study on Energy Storage 

Netherlands 

Topic 

Netherlands - Policy description 

1. Public Support 

2. Permitting 

The NECP provides insights about the order of magnitude of needed controllable capacity, an estimated 
15-17 GW in 2030 and 17-27TWh a year. It furthermore refers to electricity storage as follows: 
* Typical issues that may arise at regional or local level include, for example, the spatial integration of 
renewable energy options, as well as the storage and infrastructure of heat and electricity 
* The Netherlands already has a lot of flexibility to deal with the loss of supply or demand in line with 
market conditions. The Netherlands does not have separate targets for increasing the flexibility in the 
system. Flexibility in the form of demand response, storage or controllability is interconnected in the 
electricity market and is traded through the different markets without the precise identifiable element of 
flexibility 
* The growth of the number of smart meters will also enable consumers, if they so wish, to react to real 
time prices, with or without aggregators. In addition, any barriers to storage will be removed. The transi-
tion to electric driving can contribute to this. 
* New opportunities such as the deployment of flexibility, energy storage, demand and orientation and 
congestion management will also look at how to maximise the available space on the grid with the low-
est social costs 
* Flexibility is further unlocked by [further] introducing dynamic tariffs in the retail market. There is a 
great deal of flexibility in the system, such as large scale users, which are flexible and responsive to real 
time prices by switching up, up- or down, and parties with storage assets dealing with different markets. 
Where necessary, barriers to storage will be removed 
* In general, the Dutch authorities pursue electricity market frameworks that promote fair competition 
between market players and therefore do not discriminate against any party. These include those provid-
ing renewable energy, demand response and storage, including aggregation. No separate national tar-
gets have been set for this purpose 
* Energy tax and energy bill: There are a number of changes in energy taxation and in the Sustainable 
Energy Storage (ODE) with an impact on energy bills. The gas tax is increased. Additional funds raised in 
this way will be refunded by a higher tax reduction and a lower taxation of electricity 
* The Netherlands has great potential for producing renewable electricity. An important part of energy 
security for the Netherlands is the potential for large-scale and long-term storage of renewable electric-
ity. The development of power to gas is crucial to continue to supply a large part of its own energy 
needs and the storage of renewable electricity in the form of a gas entails flexibility for the electricity 
tourism system and a renewable energy carrier for the sustainability of transport and mobility, the indus-
try and the built environment the Netherlands do not do so 
* Dynamic tariffs are also more and more entering the retail market. There is a great deal of flexibility in 
the system, such as large scale users, which are flexible and responsive to real time prices by ramping 
ups, up- or downstream storage, and parties with storage assets dealing with the different markets. In 
the area of Energy (TSE), systems integration and flexibility are becoming increasingly common and fi-
nancial support for research (innovation).In addition, the TSO also runs several pilots with pooled/aggre-
gated storage of small-scale storage devices such as home and electric cars 

* No specific permitting rules are defined, and storage characteristics are not suited for the current per-
mitting regulations. This gives municipalities autonomy to determine their own requirements, which in-
creases the permitting complexity. 
* For aquifer thermal energy storage (ATES) specifically, multiple legislation addresses the use of under-
ground resources, environmental protection, permitting and monitoring, as well as accompanying manu-
als and other tools. 
* Businesses indicate the lack of standards (regarding storage safety such as prevention of fire and heat 
dissipation) is a reason to be reluctant to invest on a large scale in lines for products and services based 
on storage, and that it will be necessary especially for underground energy storage to obtain social ac-
ceptance. 

3. Energy Markets 
and Capacity 
Mechanisms 

DA/ID markets: 
*Energy storage is able to participate in DA and ID markets 
* Regulatory framework for active consumers to participate in ID & DA was not in place in 2020 

Capacity mechanisms:  
* There is no Dutch capacity mechanism.  

* The National Energy and Climate Plan indicates dynamic retail rates will be further expanded, beyond 
current practices. Several electricity suppliers already provide dynamic (hourly) retail prices. 
* In 2018 the EPEX energy exchange introduced loop block orders, where two block orders are executed 
or rejected together, representing for example the storage cycle. 

260 

 
 
 
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Topic 

Netherlands - Policy description 

4. Ancillary  
Services 

5. Grid Aspects 

6. Taxes & Levies 

7. Other &  
General 

8. Barriers 

* There are over 2500 aquifer thermal energy storage systems in the Netherlands, with a total capacity 
above 1 GW and reducing both total and peak energy demand. Strong growth is  forecasted to 2020. In 
August 2018 the total battery capacity of EVs was 2532 MW. 

Balancing market: 
* FCR cooperation project active, allowing for provision of FCR capacity by storage. Storage balance ser-
vice providers in the FCR market are considered generation, but there is a differentiation made between 
energy-limited sources (e.g. batteries) and unconstrained sources (large gas or coal-fired production 
units). It is also possible to pool various storage assets under a single balancing service provider (BSP), 
facilitating the satisfy the FCR market requirements. 
* Batteries could provide also FRRa services. There is no pumped hydro in the Netherlands. 
* No other information identified on storage not being eligible to participate in balancing markets 
* Regulatory framework for active consumers to participate in balancing markets was not in place in 
2020  
* Not open for independent aggregators in 2020 
* Design of some products not compliant with Electricity Target Model including min delivery period 
(mFRR), min capacity required (mFRR), min bid size capacity (mFRR) 
* For all balancing products pooling is allowed; dynamic pooling for mFRR and aFRR is allowed 

* Storage not allowed in 2020 to provide transmission-level voltage control services 

Mechanisms to value distributed flexibility sources 
* Local flexibility platforms & other initiatives: Enervalis (DSO & third party), ETPA (power exchange, 
TSO/DSO); main driver of flexibility is HV congestion (Source: Accenture); GOPACS (T/DSO); Dynamo 
flexmarkt Nijmegen-Noord 
* The National Energy and Climate Plan indicates several pilot projects offering on flexible markets re-
sources from bundled/aggregate storage, and small-scale storage equipment (including home batteries 
and electric cars) 

* No double charging in 2020 for transmission-connected storage 
* injection & withdrawal charges for prosumers connected to the distribution grid.  
* Transmission access tariffs in the Netherlands are mostly capacity-based, thus avoiding double charg-
ing of access tariffs for storage.  
* Storage systems providing ancillary services do not benefit from grid tariff exemptions. 
* There are no temporal signals for network tariffs. Experiments and discussions are ongoing for more 
dynamic network tariffs. 
* The net metering will be phased out, starting in 2023. It is expected that with this phase out it will make 
it increasingly attractive to develop storage. 
* TenneT identifies the need to further develop the market model and processes for congestion manage-
ment in cooperation between TSO and DSOs. The GOPACS platform is launched were grid operators, 
both TSO and DSOs, can prevent congestion by redispatching generation/consumption to areas outside 
the possible congested area.   
* The NDP 2020 has explicitly taken into account the Dutch Climate Agreement which is the basis for the 
CO2 reduction plans of the Dutch government and which also forms the basis of the NECP. It had one 
scenario based on the Climate Agreement that is used by 
the TSO and all DSOs. The NDP 2020 scenarios data-freeze happened before the adoption of the NECP. 
The NRA is currently not certain how the 2022 scenarios will relate to the NECP. 
* PHS and other energy storage facilities (e.g. batteries) are not allowed to be included in network devel-
opment plan.  
* Introduced public consultations of the draft NDP. 
* Data exchanges regarding scenario's and/or assumptions and other alignment TSO/DSOs NDPs 

* Since 2022, double taxation of energy storage has been eliminated 
* A tax advantage can be obtained by companies that invest in storage systems. The Energy Investment 
Allowance (EIA) fiscal scheme provides fiscal advantages  by allowing deduction of up to 45% of the in-
vestment costs from the taxable profit. 

* The lack of guidelines on permitting of storage leaves the responsibility for municipalities to determine 
the requirements. This can lead to incoherent requirements in the Netherlands. A stakeholder indicates 
guidelines are necessary to orient municipalities in the permitting of storage. 
* The lack of temporal signals in network tariffs reduces the incentives for load management by users. 

261 

 
 
 
 
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Topic 

Netherlands - Policy description 

9. Best practices 

* There is advanced participation of storage and aggregators in balancing markets, recognized by stud-
ies. 
* Capacity-based access tariffs eliminate the possibility of double charging of access fees to storage. 
* Local governments (e.g. municipalities and provinces) need to create a Regional Energy Strategy (RES) 
as defined in the National Climate Agreement, with attention also to energy infrastructure (and thus 
storage) aspects. 
* A policy instrument facilitates experiments allowing a specified exemption under the Electricity Act, for 
example for experimentation with energy storage. Within 4 years the government evaluates the outcome 
and lessons learned, to see whether a legislative change is warranted. 
* During the last years a number of (de facto, international) standards have been developed with the in-
put from Dutch parties, such as USEF (Universal Smart Energy Framework, USEF foundation) for flexibility 
on the marketplace, the OCPP protocol for flexibility from electric vehicles (Open Charge Alliance) and 
the protocol EFI to connect flexibility devices virtually to a marketplace (Foundation Flexiblepower Alli-
ance Network, FAN). Other projects worked on a basis for a standard for smart distribution stations and 
the employment of direct current (DC).   

262 

 
 
 
EnTEC – Study on Energy Storage 

Poland 

Topic 

Poland - Policy description 

1. Public Support 

2. Permitting 

The NECP refers to electricity storage: 
* it is important to develop technologies for energy storage, the roll-out of smart grids, the development 
of electromobility, the introduction of energy-efficient and highly efficient technologies 
* Technological progress will have a significant impact on the scale of RES use, both in terms of the cur-
rent generation of energy and in radically new technologies, but also in energy storage technologies 
* The small elasticity of the Polish energy market (on the supply side and the supply side) is mainly due 
to the fact that there are practically no regulatory sources (except for pumped storage) which would be 
in a state 
* Investments in gas generation and transmission infrastructure are a key element in ensuring the flexi-
bility of the system in view of the increasing role of RES. The participation of active audiences and aggre-
gators, also through the deployment of smart grids, will be able to respond to situations of scarcity. In 
the long term, the development of demand side management (DSR), energy storage, as well as energy 
clusters, which should have the potential to be self-balanced can also be taken into account in the long 
term 
* The existing potential for the offshore wind sector (offshore sector) in the Baltic, in view of the need to 
ensure adequate storage capacity and the transmission of such energy generated after 2025, offers op-
portunities for the development and use of this technology beyond 
* In the context of R & D & I, it will be important to support the area of innovation in infrastructure (in-
cluding technologies) for generation, storage and use of hydrogen, … 
* The development of storage technologies is a prerequisite for the development of RES and for the de-
velopment of storage technologies 
* The capacity market is technologically neutral, thereby creating a level playing field for all electricity, 
electricity storage and DSR (Demand Side Response) technologies of, taking into account the degree to 
which individual technologies contribute to security of supply and provided that the requirements of the 
Power Market Act of 8 December 2017 are met 
* Particular attention should be paid to the capacity market that allows DSR auctions and energy storage 
facilities. In the auctions held in 2018 and 2019, strong contracts were awarded to close to 3 200 MW of 
DSR units and to energy storage facilities 
* Measures will be taken to increase the flexibility of the energy system in relation to the generation of 
energy from renewable sources, e.g. smart grids, aggregation, DSR, storage, distributed generation, 
mechanisms control, re-dispatching and curtailment as well as real-time price signals, including the in-
troduction of intraday coupling 
* Energy storage facilities, including cells and batteries for electric vehicles: the development of electro-
mobility is in line with the EU’s strategic direction 
* Another way is production based on hydrogen (P2L), which can be CO2 neutral and can contribute to a 
significant reduction in greenhouse gas emissions while maintaining the liquid form. The maintenance of 
a liquid form is greatly facilitated by the transport and storage of energy 

* The 2021 Energy Law amendment require facilities above 10 MW requiring licensing by the NRA, while 
facilities above 50 kW need to register with the respective TSO or DSO. Time limits are established for  
* In April 2022 an important amendment to the small prosumers energy market was introduced, with a 
transition from net-metering to the net-billing type 
* In 2024, it is planned to transit into dynamic prices even for small prosumers. 

3. Energy Markets 
and Capacity 
Mechanisms 

DA/ID markets: 
*Energy storage is able to participate in DA and ID markets 
* Regulatory framework for active consumers to participate in ID & DA was not in place in 2020 

Capacity mechanisms:  
* Multi-year capacity contracts in place, annual delivery period 
* The capacity market design in the Capacity Market Act of 2017 prioritizes low-emission technologies, 
including storage, with the minimum required provision period being shortened to 4 hours. 

4. Ancillary Ser-
vices 

* Storage may contribute to ancillary services.  

Balancing market: 
* No information identified on storage not being eligible to participate in balancing markets 
* Regulatory framework for active consumers to participate in balancing markets was not in place in 
2020 
* Design of some products not compliant with Electricity Target Model for aggregation of load not al-
lowed, validity period, asymmetrical balancing products 
* Not compliant with Electricity Target Model: max/min price limits 

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Topic 

Poland - Policy description 

5. Grid Aspects 

* Single pricing, single position compliant with Electricity Target Model 

* Storage not allowed in 2020 to provide transmission-level voltage control services 

* Double charging has been eliminated with the 2021 Energy Law amendment 
* The 2021 Energy Law amendment introduced a discount of 50% of connection costs 
* March 2022 net metering was changed to net billing. 
* The state energy policy contains guidelines in the field of CO2 emissions through goals to be achieved 
for each year. In this way, it determines the future structure of the generation system (depending on the 
amount of power demand and the allowed level of CO2 emissions). This influences the reconstruction of 
the energy system and sets tasks for the TSO in terms of ensuring continuity and stability of the energy 
supply to industry and customers. 
* "Energy storage facilities shall be included in network development plan under special conditions". 
Pursuant to Article 16/7/8 of Energy Law: 
"7. The plan referred to in paragraph 1, includes in particular: 
8) projects related to the use of electricity storage facilities, as far as the distribution, transmission or in-
terconnected system operator deems it technically justified to ensure electricity supply, and it will show 
in a cost-benefit analysis that the use of electricity storage will be beneficial, and it will not be associated 
with disproportionately high costs - in the case of plans prepared by energy companies involved in 
transmission or distribution of electricity. " 

6. Taxes & Levies 

* There is no exemption to other surcharges such as for RES or cogeneration support. 
* There is no exemption for the electricity consumption tax in Poland. 

7. Other &  
General 

8. Barriers 

* The 2021 Energy Law amendment introduced harmonised definitions on energy storage and energy 
storage facilities 

* Due to huge popularity of small PV installations, before the rules changed in April 2022, there are 
household areas with a problem of overvoltage due to the high small PV density in some area 

9. Best practices 

* The capacity market design in the Capacity Market Act of 2017 prioritizes low-emission technologies, 
including storage, with the minimum required provision period being shortened to 4 hours. 

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Portugal 

Topic 

Portugal - Policy description 

1. Public Support 

The NECP refers to electricity storage. 
* It forecasts an increase in storage capacity, first through pumped hydro and, closer to 2030, with a 
more relevant contribution of hydrogen and batteries. A large part of this capacity should be related 
with solar and wind renewable generation, and the remaining with stand-alone storage. The NECP also 
considers that, to increase the role of demand response in the electricity sector and incentives to be-
hind-the-meter storage in buildings and industry will be very relevant, along with the increase of smart 
charging in EVs. 
* Smart grids, management support systems, producer and/or consumer aggregators, smart meters, 
storage systems, local energy generation, active consumers, flexibility of offer/demand, electric vehicle, 
among others, are the variables to be taken into account in constructing the grid model of the future 
* The development of new technologies and the improvement of existing low carbon technologies re-
quires a significant effort in research and innovation that will be achieved through the adoption of an 
ambitious and comprehensive agenda covering all stages of the technological development until their 
commercialisation. This will greatly contribute to national support frameworks that will be oriented to-
wards research and technological development in line with the country’s priorities, such as hydrogen, 
storage, smart grids, advanced biofuels, deep geothermal, concentration thermal, energy from the 
oceans, energy integration, energy conversion and storage, low carbon processes, circular economy, pre-
cision farming, among others 
* For the electricity sector, a strong impulse is given to the electrification of the consumption associated 
with the decarbonisation of production by enhancing the exploitation of the renewable energy potential 
with a particular focus on onshore/offshore wind and solar technologies, in parallel with the promotion 
of distributed generation, promotion of storage, strengthening and optimisation of the transmission and 
distribution networks and by promoting pilot projects 
* Pilot projects based on Concentrated Solar Thermal Technologies will be promoted as a technology 
enabling energy storage 
* National objectives with regard to increasing the flexibility of the national energy system, in particular 
by means of deploying domestic energy sources, demand response and energy storage 
* A significant part of the new storage capacity should be directly linked to the renewable electricity gen-
erating centres 
* By 2030, storage capacity is expected to increase, mainly via reversible pumping hydro, and at a later 
stage of the decade a contribution of batteries and hydrogen technologies. A significant part of this ca-
pacity should be linked to the production sites themselves via wind and solar technologies, with the re-
maining dedicated storage 
* In the electricity sector, industrial installations and storage incentives behind-the- meter in the building 
and industry sectors, so as to make changes in the daily load profile in the public service electricity grid 
less marked, as well as the generalisation of “smart” charging strategies on electric vehicles 
* new hydroelectric plants with storage and reversibility (pumping operation) that are expected to be 
placed in service until 2026 (reversibility, Daivões, already commissioned – 2nd quarter of 2022, and Alto 
Tâmega, expected commissioning date by the beginning of 2024) ensure an important contribution to 
increasing the flexibility of the system 
* Hydrogen has a huge potential as an energy carrier, which could serve as energy storage or fuel for the 
various sectors of the economy 
* Ensuring security of supply should be ensured by adopting appropriate measures addressing an imbal-
ance between supply and demand, including those related to the overall technical management of the 
system, which encourage the diversification of supply sources and which contribute to the planning, 
construction and maintenance of the necessary infrastructure. The increase in interconnection capacity, 
storage systems (key in an essentially renewable energy system), the adoption of new network planning 
mechanisms, the dissemination of smart grids, etc 
* To promote storage systems, the following action measures are envisaged: 1/ Create the legal frame-
work for the implementation of storage systems 2/ Promote the implementation of storage projects as-
sociated with renewable electricity generation centres; 3/ Promote storage on islands. 
* The demand aggregator will aim to bring together different actors/entities, such as final consumers, 
small producers, storage, recharging points for electric vehicles, or any combination of them, and act as 
a single entity and participate in the electricity market and provide system services. 
* The development of activities associated with renewable energy, storage, hydrogen, advanced biofuels 
and other 100% renewable fuels will require the provision of specialised training needs covering various 
levels of training 
* The Innovation Fund is one of the largest funding programmes for low-carbon innovative technology 
demonstration projects and focuses on, among others, energy storage. 

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Topic 

Portugal - Policy description 

* InnovFin Energy Demo Projects: This financing arrangement consists of loans, loan guarantees or fi-
nancing of property type, normally between EUR 7,5 and EUR 75 million for innovative energy system 
transformation projects, including but not limited to: renewable energy technologies, smart energy sys-
tems, energy storage, carbon capture and storage or carbon capture and use. This financing mechanism 
is complemented by the European Investment Bank 
* The challenge of the adequacy of network infrastructure enabling an effective energy transition arises 
in particular to the Low Voltage Network (LV) that will no longer be a passive network to integrate a 
whole set of new concepts, from network intelligence, management support systems, smart meters, stor-
age, energy management, local production, energy communities, electric vehicles, among others, are 
variable to be taken into account in the construction of the future network 
Portugal has made a bet on capacity auction processes. In particular, the auctions that took place in 
2020 (solar), in 2021 for the attribution of the connection capacity of the Pego coal plant, which ceased 
operations in the last quarter of 2021 and, more recently, the floating solar auction. 
These auctions include the possibility of associating the production of electricity with the installation of 
storage solutions, making it possible to maximise the potential of grid connection capacity in hourly 
terms, as well as increasing the contribution of renewable energy to grid stability. 
The RMSA-E 2021 (Security of Supply Monitoring Report for the national electricity system), assumes in 
the ambition scenario a target of 200 MW of installed storage capacity in PT for 2030 (taking into ac-
count the results of the 2020’s Solar auction). 
Regarding transport sector, in particular electric vehicles, the RMSA-E 2021, in line with NECP modelling 
for transport sector (“ambition scenario”), it is assumed, for 2030 (considering smart-charging): 1.250.000 
BEV light vehicles; 2.147 BEV Heavy vehicles for passages and 690 BEV vehicles for goods. 

* Legislation indicates the generation and storage license shall include the conditions for storage (not 
impacting storage for self-production). 
* Autonomous storage units require a license, depending on the installed capacity. Above 1 MW a pro-
duction and operation license are needed. Autonomous storage below 1 MW requires prior registration 
and operating certificate. Rules are set in the new Decree-Law no. 15/2022 (which repealed the Decree-
law no. 76/2019). Permitting rules apply equally to generation and storage units.   
* Decree-Law no. 15/2022 also introduces the Technological Free Zones (art. 216), which can be used for 
the development of solutions associated with renewable energies. Its operation, in terms of licensing, is 
simplified, enabling the creation of pilot projects that may be scaled up. 
* Decree-law no. 30-A/2022 provides exceptional measures to ensure the simplification of procedures 
for the production of electricity from renewable sources. 

2. Permitting 

3. Energy Markets 
and Capacity 
Mechanisms 

DA/ID markets: 
*Energy storage is able to participate in DA and ID markets 

4. Ancillary  
Services 

* In the 2nd semester of 2021, Portugal established a Regulation Reserve Band Market, with the objec-
tive of complementing the operational reserve of the electricity system with a regulation reserve band. 
This market is open to very high, high and medium voltage consumers, and is carried out through a 
competitive auction. The consumers which have been contracted, following the auction, are obliged to 
provide the Regulatory Reserve Band that has been awarded to them, with a corresponding consump-
tion decrease potential. storage not being eligible to participate in this mechanism. 

Balancing market: 
* Trans European Replacement Reserves Exchange (TERRE) in place for exchange of replacement re-
serves, and allowing the participation of storage 
* No other information identified on storage not being eligible to participate in balancing markets 
*Design of some products not compliant with Electricity Target Model for min delivery period (mFRR), 
max delivery period (mFRR), aggregation of load not allowed, validity period 
* Compliant with Electricity Target Model: max/min price limits  
* Dual pricing, dual position not compliant with Electricity Target Model, recently addresses in public 
consultation from the NRA, yet to be resolved.  

* Storage is clarified in the new Decree-Law (DL) 15/2022, 14th January 2022, but needs to be imple-
mented through further regulation by the TSO and NRA. 
The DL includes the possibility foreseen in the article 36 and 54 of the IEM directive for grid operators to 
own and operate storage facilities upon the NRA approval.  

* The RES self-production and energy communities framework in the Decree-Law 162/2019, repealed by 
Decree-law no. 15/2022 requires storage units to have a meter it those are directly connected to the 
public grid as an electric facility apart from the consumption and generation units. EVs are considered 
storage only if they have bidirectional chargers. 

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Portugal - Policy description 

5. Grid Aspects 

* Only conventional generators provide (mandatory and non-remunerated) voltage control in Portugal. 
* Black-start is not mandatory. A CCGT and a hydro plant provide the service in Portugal. 

* No double charging in 2020 for transmission-connected storage 
* no withdrawal charges for PHS connected to the transmission and distribution grid, however does ap-
ply withdrawal charges to prosumers connected to the distribution grid.  
* Self-consumers and small producers (including with storage) must pay the connection costs to the grid. 
In what concerns self-consumed energy, they only pay for grid charges concerning the connection volt-
age level (and not for the costs of higher voltage networks). When there is reverse flows to higher volt-
age levels, the exemption is partial following a methodology set by the national regulator. 
* A governmental entity aided by the TSO shall issue a Monitoring Report on Security of Supply and take 
into consideration the NECP and the new ERAA by ENTSO-E. When preparing the NDP, the TSO shall 
take into consideration the NECP and the Security of Supply report (e.g. new renewable 
generation capacity expected in the next 10 years) and propose or schedule investments accordingly. 
* PHS and other energy storage facilities (e.g. batteries) are allowed to be included in the network devel-
opment plan, PHS, batteries & hydrogen included as well. * The DSO for High Voltage and Medium Volt-
age networks are obliged to prepare a NDP (for 5 years planning). No obligation to prepare NDP for Low 
Voltage operators. Consultation between TSO and the DSO regarding DSO/TSO coordination NDPs. 

6. Taxes & Levies 

* There is no exemption for storage from the electricity consumption tax set by the Law-Decree n.º 
73/2010. 
* No other indications of tax & levy exemptions for storage in Portugal. 

7. Other & General  * The regulatory framework for the electric mobility is defined in Decree-Law no. 39/2010, as amended 

by Decree-Law no. 90/2014. 
In 2016, Resolution of the Council of Ministers No. 49/2016 of 1st of September, was published and ap-
proved the end of the first phase of the MOBI.E pilot network and launch the second phase of the pilot 
network, in order to cover municipalities not served in the first phase.  
In 2017, the National Action Framework for the creation of an infrastructure for alternative fuels (QAN) 
was approved, through Resolution of the Council of Ministers no. 88/2017 of 26 of June, complying with 
Directive 2014/94/EU, of the European Parliament and of the Council of 22 October, transposed to the 
internal order by Decree-Law no. 60/2017, of 9 June. 
This framework established objectives and targets, as well as measures to promote the use of alternative 
fuels and the development of their supply infrastructure, having established, for the charging infrastruc-
ture of electric road vehicles, a public network, in 2020, composed of a minimum number 2,394 charging 
points, including the pilot network points. 

8. Barriers 

* The prohibition for renewable energy generators with storage from withdrawing energy impedes the 
use of the storage assets for multiple applications.   

9. Best practices 

* Regulation on permitting requirements for autonomous storage forecasted in legislation. 
* Permitting of batteries in generation facilities are considered retrofitting and went well in the past. 

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EnTEC – Study on Energy Storage 

Romania 

Topic 

Romania - Policy description 

1. Public Support 

2. Permitting 

The NECP refers to electricity storage: 
* "The storage capacities will contribute to the reduction of gaps between the demand and offer of elec-
tricity in the decarbonisation process and energy security" 
* "the area Energy storage is represented in the research group C4 of the National Electricity Transmis-
sion Operator" 
* "plans to clearly define the concept of energy storage in the primary law and to lay down the condi-
tions for release of energy storage licences and for connection to the network" 
* The government plans to integrate over 400 MW of battery storage capacity to flatten the load curve 
and provide balancing reserves. 
* The development of small storage capacities to foster the integration of RES is one of the main policies 
of the operational objective 'Ensure energy storage and backup systems capacities'. This comprises the 
development of pumped hydro, including the construction of the Tarnita-Lapustesti station. 
* Hybrid technologies for the storage of energy is a main research direction of the National Hydrogen 
and Fuel Cell Centre, in the form of the Lithium-Ion program. 
* The possibilities for storage and aggregated production of multiple consumers/producers should be 
considered. 

* There are no specific permitting rules for storage in Romania 
* For small scale, the active consumer permitting rules will be applied. 
* Permitting duration is long (2-5 years for greenfield storage projects) , but is not seen as a central bar-
rier. 

3. Energy Markets 
and Capacity 
Mechanisms 

DA/ID markets: 
*Energy storage is able to participate in DA and ID markets 

Capacity mechanisms:  
* NAP 

4. Ancillary  
Services 

5. Grid Aspects 

* As of 2016 demand response was already allowed in the Romanian electricity wholesale market, but 
was not active. The legal framework is well-established, but due to a number of key barriers, is has not 
taken off the ground due to the lack of secondary legislation, the lack of smart meters and the electricity 
system is supply-driven. 

Balancing market: 
* No information identified on storage not being eligible to participate in balancing markets  
* Design of some products not compliant with Electricity Target Model for several aspects, including 
maximum delivery period (RR & mFRR), minimum capacity (FCR, aFRR, mFRR &RR) and minimum bid 
size (FCR, aFRR, mFRR &RR), no load aggregation allowed, validity period, symmetric balancing capacity 
products (aFRR) 
* Compliant with Electricity Target Model: max/min price limits 
* Single pricing, single position compliant with Electricity Target Model 
* Storage not allowed in 2020 to provide transmission-level voltage control services 

* Double charging in 2020 for pumped hydro storage 
*  withdrawal charges for PHS, other storage facilities (e.g. batteries) & prosumers connected to the dis-
tribution grid.   
* Law 121/2014 on energy efficiency lists energy storage services as one of the criteria for assessing en-
ergy efficiency for network operators. 
* Further Government Emergency Ordinance (GEO) 143/2021 for the full transposition of the contents of 
the Electricity Directive 2019/944 issuing the need for the NRA (ANRE) to adjust secondary legislation, if 
necessary, within 6 months of the effective date of this Emergency Order to include the development of 
the regulatory framework through which DSOs are encouraged to purchase energy storage and other 
flexibility services. 
* Net metering for renewable energy installations of up to 100 kW was introduced in 2018 through an 
amendment to Law 220/2008. 
* A feed-in support scheme for renewables is in place where the price is set to the last year's average 
from the day-ahead market. The price that the consumer is buying energy from the grid is almost dou-
ble due to fees (distribution fee, transmission fee, extraction fee). 
* The NDP contains scenarios that include the assumptions and targets set out in the NECP. 
* PHS and other energy storage facilities (e.g. batteries) are allowed to be included in the network devel-
opment plan, however are not included 
* Regarding DSO/TSO coordination NDPs: other alignment/joint activities DSO/TSO 

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6. Taxes & Levies 

* No specific mention of electricity storage identified in the legislation, assumption is that charging is 
treated as consumption for the electricity consumption tax and levy purposes. 

7. Other &  
General 

8. Barriers 

* The high hydropower installed capacity in Romania (6.4 GW) including pumped hydro (200 MW) may 
act as a disincentive to further development of energy storage and related policies 
* In practice demand response is not active in the Romanian electricity and balancing markets. 

9. Best practices 

* The NECP provides a target to integrate over 400 MW of battery storage capacity 
* EDPR has inaugurated in 2018 a 1MW battery system in its Cobadin wind farm 
* Research laboratories specialising in the development of energy storage technologies are forecasted. 

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EnTEC – Study on Energy Storage 

Slovakia 

Topic 

Slovakia - Policy description 

1. Public Support 

2. Permitting 

* Notified construction of battery storage facilities in the Slovak Republic: 
-ELSEA - Energy storage facility of a cumulative installed capacity of 384 MW; The ELSEA project is a can-
didate for the PCI list 
-SE Integrator 70 MW; SE integrator project is a candidate for the PCI list 
* The amendment to Act 251/2012 contains legal regulation of new participants in electricity market and 
gas market with positive impact on flexibility provision, which include in particular active customer, en-
ergy community, operator of the electricity storage facility and aggregator. It also contains legal regula-
tion of electricity sharing and storage. 
* In the new energy law No 251 (to take effect on 1.10.2022) and the Market Rules Decree (to enter into 
force by 31.3.2023), the energy storage specified in the energy law as the equipment, which allows the 
postponement of electricity consumption or the conversion into a form of energy that can be stored, in 
the form of controlled charging and discharging processes of such equipment. The energy storage will 
have the right to be connected to TSO/DSO system, to participate on ancillary services, to provide flexi-
bility and to provide flexibility for aggregation. 
* The recovery and resilience plan includes energy storage as an important part of managing energy sys-
tem flexibility after increasing penetration of renewable sources. 

The NECP refers to electricity storage 
* The deployment of intelligent energy systems and electricity storage systems is particularly important. 
* In line with the overarching European legislation, to create conditions for the provision of support ser-
vices allowing the aggregation of demand facilities, energy storage facilities and power generation facili-
ties for the purpose of offering balancing services 
* The development of energy storage will ensure the integration of variable RES into the grid 
* The integration of the local storage of energy in storage appliances, energy storage devices and elec-
tric vehicles or in the gas distribution network with their storage capacities is therefore an important ele-
ment of the smart grid. 
* The maintenance and support of the existing capacity and operation of pumped storage power plants 
and, where appropriate, to assess the potential increase in storage capacity by building a new pumped-
storage hydroelectric power plant 
* State R&I programme (SRDP) Energy Security includes storage 
* Conditions for the provision of support services from among others storage, including balancing ser-
vices should be created 
* Indicates support to shortening of the currently used trading intervals on daily, intraday and balancing 
markets. 
* Conditions are currently being created for the provision of support services from storage (LER, BESS), 
effective from 1.9.2022. 
* Highlights the Ipeľ Pumped Hydropower Project (proposed capacity of 560 MW), which depends how-
ever on the development of the EU electricity market and interest from a strategic investor 

* Energy storage units go through the standard permitting process (environmental, construction, access 
and connection to the power system location, others), and there are no specific rules for energy storage. 
* Large scale energy storage (pumped hydro) has to fulfil standard technical specification of TSO/ DSO 
for connection. The specific permitting rules for other types of energy storage (LER e.g. batteries) are in-
cluded in the technical conditions of the power system. 

3. Energy Markets 
and Capacity 
Mechanisms 

DA/ID markets: 
*Energy storage is able to participate in DA and ID markets 
* Regulatory framework for active consumers to participate in ID & DA was not in place in 2020 

Capacity mechanisms:  
*The adequacy issues have not been identified in Slovakia so the Capacity mechanism is not needed to 
be implemented in the Slovak Power System at this point. 

* Due to competitiveness, the typical utilisation of storage is limited to back-up power supply, provision 
of ancillary services (pumped hydro) or peak shaving. 
* Limited battery energy storages are installed in behind the meter installation combined with PV instal-
lation. In small business for 'peak shaving', to a limited extent. 
* There are some applications of CHP systems storing heat to provide electricity system products to the 
markets but mainly balancing services to the TSO. 
* CZT allows for the provision of support balancing services in electricity systems and the storage of en-
ergy in the form of heat. 

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Slovakia - Policy description 

4. Ancillary  
Services 

5. Grid Aspects 

Balancing market: 
* Under the Slovak rules, pumped hydro is eligible to provide specific products (Tertiary 3 min+/-) and 
also standard products of aFRR, mFRR+/- services 
* Batteries are eligible to provide only FCR. 
* Regulatory framework for aggregators, active consumers and operator of the electricity storage facility 
to allow their participation in balancing markets is being prepared 
* Design of all the products is compliant with Electricity Target Model for max delivery period (mFRR), 
min capacity required (mFRR), min bid size energy & capacity (aFRR, mFRR), procurement lead times, but 
not compliant with settlement rules (pay as bid aFRR, mFRR) and 15 min time of purchase availability. 
These inconsistencies will be resolved before accession to the PICASSO and MARI platforms in 2024.  
* Not compliant with Electricity Target Model: max/min price limits 
* Single pricing, single position compliant with Electricity Target Model  

* No double charging in 2020 for transmission-connected storage 
* No injection charges for PHS connected to the distribution grid, but applies withdrawal charges for 
PHS & prosumers connected to the distribution grid. Prosumers in case their injection capacity is higher 
than their withdrawal capacity are charged for injection charges.   
* The TSO takes the NECP into account when designing the generation mix. 
* PHS and other energy storage facilities (e.g. batteries) are allowed to be included in the network devel-
opment plan. NDP includes new storage technologies.  
* Regarding DSO/TSO coordination NDPs: other alignment/joint activities DSO/TSO 

6. Taxes & Levies 

* Charging for storage is treated as consumption for the electricity consumption tax and levy purposes 

7. Other &  
General 

8. Barriers 

* Regulatory: Energy storage (except hydro pumps) is burdened by capacity and injection fee that over-
charges its usage. 

9. Best practices 

* National R&I programme includes storage in the energy security category 
* Second life energy storage is one of the IPCEI project 

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EnTEC – Study on Energy Storage 

Slovenia 

Topic 

Slovenia - Policy description 

1. Public Support 

The NECP refers to electricity storage 
* "Development of energy storage technologies, infrastructure and services as energy security and inter-
nal energy market target for 2030" 
* "Providing conditions for further integration of markets and construction of necessary infrastructure as 
an economic instrument to reinforce participation in European research projects in the area of energy 
storage (p. 108), increase R&D funding to the transition to a low-carbon society and other low carbon 
technologies" (p.117) 
* Part of the NEPN Scenario 
* Technological development and commercial breakthrough of storage technologies is listed as a key 
challenge for Slovenia. 
* Slovenia’s Smart Specialisation Strategy (S4) includes a pillar on mobility including related energy stor-
age systems. 

2. Permitting 

* Depending on the technology (for example pumped storage) storage of electricity might be consid-
ered as production, so construction of such projects of more than 1 MW connected to public grid re-
quires a permission issued by the Minister for Infrastructure. 

3. Energy Markets 
and Capacity 
Mechanisms 

DA/ID markets: 
*Energy storage is able to participate in DA and ID markets 

Capacity mechanisms:  
* NAP 

4. Ancillary  
Services 

5. Grid Aspects 

* Behind-the-meter storage is already allowed. Besides larger projects, there have been some smaller 
projects including the vanadium-flow batteries installed at a restaurant in the Slovenian Alps. 

Balancing market: 
* FCR cooperation project active, allowing for provision of FCR capacity by storage. 
* No other information identified on storage not being eligible to participate in balancing markets  
* Design of some products not compliant with Electricity Target Model for max delivery period (mFRR), 
min capacity required (aFRR), min bid size capacity (mFRR), validity period, procurement lead time, 
length of balancing contracts (FCR, aFRR, mFRR), settlement rule (pay as bid, aFRR, mFRR) 
*Not compliant with Electricity Target Model: max/min price limits & dual pricing, single position 

* The Slovenian regulator has launched in July 2019 a public consultation regarding the establishment of 
a flexibility market in Slovenia, that deals with the role of storage as well. It explores the possible roles of 
storage in providing flexibility services and seeks input from stakeholders regarding dynamic tariffs and 
possible flexibility products. It identifies several barriers on market design, measurement, validation, sup-
port systems and technical solutions. 
* There is also a reference in the Energy Act regarding facilitating the inclusion of advanced technologies 
for the provision of ancillary services. 

* Storage facilities are exempt from the network charges under certain conditions as defined by the 'Act 
determining the methodology for setting the network charge, the criteria for establishing eligible costs 
for electricity networks, and the methodology for charging for the network charge' adopted every 3 
years by the regulator, which poses regulatory uncertainty (exemptions not determined by law). 
- Between April and June regulator opened a public consultation on the new Act. Under the new pro-
posal, storage facilities are no longer exempt from network charges, except for the time they provide an-
cillary services. The new Act should enter into force in 2023 for the period of 3 years. New proposal 
poses risks to viable economic operation of existing pumped storage hydro power plants, as well as to 
new investments. 

* In Slovenia, specific incentives for smart grid investments exist: If the network operator realizes invest-
ments in smart grids that meet the requirements set out in the methodology, a one-off incentive is 
acknowledged amounting to 3% of the current value of the asset in the year in which the asset was put 
into service. Yet, these incentives were considered to be too low and will be increased in the next regula-
tory period. 
* The PCI smart grid project, SINCRO.GRID, is under implementation as a cooperation between TSOs and 
DSOs from Slovenia and Croatia, with a 10MW/50MWh battery energy storage system (BESS) being 
trialled in Slovenia 
* To access the network, storage facilities must contract with the TSO (ELES) or the DSO SODO and/or 
the sub-contracted distribution companies 
* Slovenia applies net metering for small consumers 

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* Scenarios of development NDP must be in line with the NECP. 
* No public consultations are carried out by other entities, however TSO has specific (bilateral) consulta-
tions 
* Regarding DSO/TSO coordination NDPs: other alignment/joint activities DSO/TSO 

6. Taxes & Levies 

* No specific mention of electricity storage identified in the legislation, storage facilities are a separate 
category and they do not pay consumption taxes and levies in charging mode. 

7. Other &  
General 

8. Barriers 

9. Best practices 

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Spain 

Topic 

Spain - Policy description 

1. Public Support 

2. Permitting 

The NECP refers to electricity storage 
* Listed in the measure of Demand management, storage and flexibility (p.83) 
* "It is necessary to determine the technical requirements for participants offering energy from renewa-
ble sources, energy storage managers and those providing demand response services, to participate in 
existing and developing markets" (p.84) 
*Listed in the measure of Plan for the technological upgrading of existing electricity generation projects 
with renewable energies (p.97) 
* Listed in the measure of Planning for safe operation of a decarbonised energy system (p.172) 
*Listed in the measure of Adaptation of electricity grids to integrate renewables (p.86) 
*Listed in the measure of Unique projects and strategy for sustainable energy on the islands (p.101) 
*Listed in the measure of Local energy communities (p. 102) 
* Listed in the measure of Integration of the electricity market (p.180); funding of research (pp. 280)  

* The Storage Strategy was adopted in 2021 and contains varied measures for incentivising and promot-
ing a level playing field for storage. 
* Component 8 of RRP (Resilience and Recovery Plan) for Spain, includes a specific investment, C8.I1 
amounting to 654M€ of support, that comprises both BTM and FTM storage. Additionally, the regulated 
retribution scheme of the RD 960/2020 introduces a premium coefficient of market exposure for hybrid 
facilities including energy storage. In line with C8.I1, two grants were developed : 1) RD 447/2021 and RD 
377/2022 to support BTM energy storage. 2) Ministerial Order 1447/2021 to support FTM projects for 
FTM energy storage in R&D. 

* Permitted behind-the-meter storage is explicitly allowed to consume electricity. 
* The Royal Decree 1183/2020 exempts self-consumption installations with a power under 15 kW 
* Batteries co-located with renewable energy plants supported by the support scheme “régimen 
económico” may store only the on-site generated electricity and not withdraw energy from the grid for 
storage. 
* The RD-Law 6/2022 equates energy storage to generators in regards of permits, authorisation and reg-
istry, in order to provide regulatory certainty for stakeholders. Several regulation schemes have been de-
veloped during the last years, RD-law 23/2020, RD 1183/2020 and RD-Law 6/2022 to facilitate the devel-
opment, deployment and authorisation of stand-alone and hybrid storage installations. * A stakeholder 
indicates the permitting process is lengthy with different administrations involved. 
* Climate Change and Energy Transition Law indicates new hydropower concessions in the public do-
main will have as a priority to support the integration of renewable energy in the electricity system, pro-
moting in particular pumped hydro storage when this is compatible with environmental objectives. It 
also foresees the regulation of the pumping, storage and generation for the objective of maximising the 
integration of renewables. 

3. Energy Markets 
and Capacity 
Mechanisms 

DA/ID markets: 
*Energy storage is able to participate in DA and ID markets 
* Regulatory framework for active consumers to participate in ID & DA was not in place in 2020 

Capacity mechanisms:  
* Draft proposal for CM has been published and includes energy storage, both in stand-alone installa-
tions and as part of hybrid installations.  

* There is no capacity remuneration mechanism in Spain, central actors are studying the matter. 
* There is no specific regulation adapted to allow vehicle-to-grid applications. 

4. Ancillary  
Services 

Mechanisms to value distributed flexibility sources 
*Local flexibility platforms & other initiatives: SmartNet Spain (DSO) 

Balancing market: 
* NRA resolution of 10 December 2020 updating the operating procedures regulates, among others, the 
non-discriminatory access of storage to balancing markets 
* Trans European Replacement Reserves Exchange (TERRE) in place for exchange of replacement re-
serves, and allowing the participation of storage 
* Not open for independent aggregators in 2020. However, the Storage Strategy foresaw the creation of 
the independent aggregator figure. 
* Not compliant with Electricity Target Model including: minimum delivery period (mFRR &RR), max de-
livery period (mFRR), min bid size energy (RR), validity period, length balancing contracts (FCR) 
* Compliant with Electricity Target Model: min/max price limits 

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Topic 

Spain - Policy description 

* Dual pricing, single position not compliant with Electricity Target Model 

* Resolution of 10 December 2020 (Circular Informativa 8/2021) regulated the participation of energy 
storage facilities in the provision of ancillary services 
* MITECO call for proposals issued in March 2022, through opening of a public consultation for the es-
tablishment of rules for regulatory sandboxes (in addition to the one opened in July 2021). Decision pro-
cess ongoing. 
* IDAE and the market operator OMIE are exploring local electricity market models, with possible pilots 
starting. 
* Black start and voltage control services are regulated, without remuneration. Currently, voltage control 
and non-frequency services are in the regulatory pipeline of the System Operator (REE). Some operating 
procedures have included the participation of energy storage in the provision of this services.  

* No withdrawal toll charges (peajes) for PHS & batteries connected to the transmission or distribution 
grid, as specified in NRA CNMC decision 3/2020. Also no policy-related charges (cargos) for all storage 
according to Royal Decree 148/2021, from 9 of March.  
* The Royal Decree 1183/2020 regulated access to the grid for storage facilities, and Circular 1/2021 by 
the NRA established the methodology and conditions for access to and connection to the transmission 
and distribution networks of electricity generation facilities 

* Net metering is simplified for active consumers with less than 100 kW in law-decree 15/2018. 
* Self-consumed energy from renewables, co-generation or waste is exempt from network tariffs and 
other tariffs in law-decree 15/2018. 
* No information available that state that NDP is aligned with NECP. 

*Royal Decree-Law 29/2021 of 22 December, sets storage as a component that can be fully integrated 
into the electricity grid, so that it contributes to guaranteeing the safe operation of the transmission grid. 
The 2021-2026 planning of the transmission grid includes actions to guarantee the connection of stor-
age systems, as well as drawing relevance to the importance of integrated storage or synchronous com-
pensators. 

* Regarding public consultations: summary of stakeholders' comments are published. 
* Regarding DSO/TSO coordination NDPs: other alignment/joint activities DSO/TSO 

* There is no specific mention of electricity storage in the taxation legislation, thus storage discharge is 
subject to the electricity production tax (Impuesto sobre el valor de la producción de la energía eléctrica, 
IVPEE). Self-consumption installations under 100 kW are exempt. 
* The Energy Strategy indicates the government aims to develop time-differentiated network tariffs 
* The government aims to recover renewable support costs from the general budget instead from net-
work users 

* The Law-decree 23/2020 defines the figure of the holder of storage installations 

* While specific rules for RES+storage are in place for RES tenders in Spain, this does not necessarily 
value the greater dispatchability of the projects, as greater market exposure may increase the risks to the 
project 
* The lack of markets for the provision of black start and voltage control services and the impossibility 
for TSOs to procure ancillary services reduces the revenue streams available for storage. 

* Indicative development of storage to 2030 in the NECP, separated between pumped hydro and batter-
ies. 
* In the support auction for renewable generation in the Balearic Islands, generation facilities with batter-
ies received extra points versus facilities without batteries.  
* Potential inclusion of renewables combined with storage in the next support auctions, intended for 
thermal solar but open to all technologies due to technology-neutral approach. Inclusion of energy stor-
age as a priority in the Resilience and Recovery Plan, specifically in Component 8, which includes several 
reforms and investments related to energy storage.  

5. Grid Aspects 

6. Taxes & Levies 

7. Other &  
General 

8. Barriers 

9. Best practices 

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EnTEC – Study on Energy Storage 

Sweden 

Topic 

Sweden - Policy description 

1. Public Support 

The NECP refers to electricity storage 
* In the Government Budget Bill for 2020 (prop.2019/20: 1(21) The Government notes that a future elec-
tricity system with a higher proportion of variable wind and solar production increases the need for flexi-
bility in programmable generation, demand response in user sectors, energy storage and system services 
to support and stabilise the electricity system 
* In the direction of the Energy Policy Bill379, the Government considers that the network owner’s role 
may need to be given a broader content to fully exploit the benefits of smart grids, energy storage and 
demand response to the electricity system 

2. Permitting 

* in Sweden, permits for water utilisation (incl hydro storage plants) will be revised according to new leg-
islation incorporated in the Swedish Environmental Code so that no permit is older than 40 years or 
other time frame stated in the revised permit.  

3. Energy Markets 
and Capacity 
Mechanisms 

DA/ID markets: 
*Energy storage is able to participate in DA and ID markets 
* Regulatory framework for active consumers to participate in ID & DA was not in place in 2020 

Capacity mechanisms:  
*CM does not allow storage, min bid size > 5 MW 

* Heat and electricity systems are integrated in several ways, e.g. in co-generation of electricity and heat, 
or when DH is produced with electric boilers or heat pumps. Heat can also be stored more easily than 
electricity, and thermal storages are used to improve the system balancing of variable power generation. 
By utilising co-generation, heat pumps and thermal storages, a DH supplier can respond to price signals 
on the electricity market. In times of high electricity prices, DH production can be adjusted to maximise 
the power generation and thermal storage used to cover heat demand, and in times of excess power, DH 
suppliers can utilise more heat pumps. There is a number of heat storage projects ongoing based on 
storage on the DH systems. 

Balancing market: 
* No information identified on storage not being eligible to participate in balancing markets  
* Regulatory framework for active consumers to participate in balancing markets was not in place in 
2020 
*Design of some products not compliant with Electricity Target Model for max delivery period, min ca-
pacity required (aFRR, mFRR), min bid size capacity (aFRR, mFRR), aggregation of load not allowed, valid-
ity period, settlement rule (pay as bid FCR), activation rule. 
* Not compliant with Electricity Target Model: max price limit, no min price limit implemented 

* Storage not allowed in 2020 to provide transmission-level voltage control services 

New ancillary services: 
* The Swedish TSO, Svenska Kraftnät, states that the requirements on ancillary services will generally in-
crease and will much more clearly reflect and be adapted to the system’s needs. In 2019, Svenska Kraft-
nät started to establish a market for FFR (Fast Frequency Reserve), where electricity storage could be an 
important part. 
*SIR: Looking into solutions for falling inertia levels 

Mechanisms to value distributed flexibility sources 
*Local flexibility platforms & other initiatives: INTERRFACE (T/DSO) 

* injection & withdrawal charges for PHS, other storage facilities (e.g. batteries) & prosumers connected 
to the distribution grid. Only prosumers with installed capacity > 0.0435 MW are charged for injection 
charges.   
* An owner of a grid connected electricity storage is obliged to pay a grid tariffs and tax for electricity 
supplies to the storage from the grid. Storage owners are also formally obliged to pay a feed-in-tariff for 
electricity feed into the grid from the storage, however storage units with a capacity less than 1500 kW 
are excepted.  
* No information available that state that NDP is aligned with NECP. 

4. Ancillary  
Services 

5. Grid Aspects 

379  prop.2017/18: 228 The direction of energy policy. 

276 

 
 
 
 
 
 
                                                   
EnTEC – Study on Energy Storage 

Topic 

Sweden - Policy description 

* PHS and other energy storage facilities (e.g. batteries) are allowed to be included in the network devel-
opment plan, however are not included.  
* Regarding public consultations: neither public consultations nor any specific or bilateral consultation is 
carried out 
* Regarding DSO/TSO coordination NDPs: no alignment DSO/TSO NDPs.  

* There is tax deduction for the excess electricity injected into electricity network from renewable energy 
(residential solar PV, wind etc.), equal to SEK 0.60/kWh 
* Recovery of energy tax on electricity after storage of batteries: as of 1 January 2019, Chapter 11, Sec-
tion 13 of the Energy Tax Act (1994: 1776) provides for the possibility to apply for a refund of energy tax 
on electricity consumed from a network subject to a concession, stored and then fed back to the same 
electricity network subject to a concession. This is to avoid unintended double taxation 

The Swedish Energy regulator conducts an annual investigation on the Swedish flexibility market. The 
2019 investigation showed that there are not technical or legal barriers for flexibility measures, such as 
electricity storage. A general problem though is the lack of access to metering data of sufficient resolu-
tion for creating more real-time markets for flexibility and the time for the market actors to access such 
data. The main obstacle for electricity storage in Sweden is the lack of economic incentives due to the 
lack of price volatility on the Nordic electricity market.  

6. Taxes & Levies 

7. Other &  
General 

8. Barriers 

9. Best practices 

277 

 
 
 
 
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