Wood Mackenzie has forecast the long-term outlook for European energy storage, stating that it is on track to take over new-build flexibility by 2030.
In analysis released on 3 June, it explained that a combination of wind and solar power, otherwise known as Variable Renewable Energy (VRE), could make up the largest share of power capacity through Europe’s major markets – Great Britain, Germany, France, Italy and Spain – as early as 2023. By the end of the decade, owed to strong government auction programmes pushing costs down as deployments increase, those technologies will have completely taken over.
However, an additional 169GW of wind and 172GW of solar connected to the grid between now and 2040 will place unprecedented constraints on current system assets and market mechanisms, the analysis warned, meaning flexibility assets will be vital.
Interconnectors, gas peakers and energy storage capacity is collectively forecast to increase from 122GW in 2020 to 202GW by 2030, before reaching 260GW by 2040. Energy storage will be the “winning flexible asset”, however, owed to decreasing costs and the domination of VRE. Wood Mackenzie outlined how it will hit 26GW by 2030 – up from 3GW today – before rising to 89GW by 2040. This would mean that there could be 320GWh of energy storage available to balance the grid across the five major markets by 2040.