Renewables: To store or not to store?

Do we need to invest in energy storage research and development to meet our renewable energy targets? Recent media reports suggest such investments are not necessary. However, ETH research tells a different story.

Vergrösserte Ansicht: House with solar panels and batteries
Should we invest in the research and development of storage technologies to reach our renewable energy targets? (Montage: Stuart Miles, Renjith Krishnan, freedigitalphotos)

By most accounts, renewable energy has a storage problem. Intermittent supply (think solar plus nighttime) is often touted as a limiting factor for widespread reliance on renewables. In response, governments,  industry and academia – including ETH – have spent millions to improve electric energy storage, resulting in promising developments.

However, recent stories in the media have sparked controversy by questioning the need for storage. Fueled by a recent study from German think tank externe SeiteAgora Energiewende, respectable media outlets like externe SeiteFrankfurter Allgemeine Zeitung and externe SeiteBloomberg News have released stories with tantalizing headlines, saying solar leader Germany need not invest in energy storage to meet its renewable energy targets.

So what does this mean for research at ETH, or the millions of dollars invested by the EU, Japan, US and beyond? Are we wasting resources for the development and diffusion of storage technologies? Let’s take a closer look at the facts.

Digging Deeper into Agora

Indeed, the study by the Agora think tank concludes that additional grid storage is unnecessary to meet Germany’s goal to cover 60% of its energy needs from renewable resources in 20 years. Until 2035, existing (and partly CO2 emitting) power plants can supply the energy required to cover electricity needs when renewable energy is not available.

However, there are at least three key caveats that put the study in perspective. Firstly, the 20-year target of a 60% renewable share discussed in media reports is only a preliminary target, not the final goal. Germany expects renewables to provide at least 80% of electricity by 2050 [1], while the EU aims for 97% [2]. Reaching these larger targets will require substantial diffusion of storage technology, as also stated by Agora. Second, the study assumes no restriction on the installation of additional electricity transmission lines, which seems unrealistic considering the current situation in Germany [3].

Thirdly, the Agora study focuses on grid-level storage, thereby excluding a key attribute of the German Energiewende: decentralized production and storage [4]. Germany has strongly incentivized decentralization, with over a million small-scale solar systems now in operation.

The house as power plant

Recent ETH publications [5] show that investment in electricity storage on a decentralized level could take off whether or not storage is needed at the grid level. With high retail electricity prices and low financing costs, combining a household solar PV system with batteries will become an attractive investment for German residents in the very near future, especially with the ongoing reductions in the German solar PV subsidy. Unless policymakers intervene, e.g., charging a grid connection fee for households with PV and battery systems, the return on investment could rise in the future as prices fall for both PV and batteries, fueling an expected externe Seite20-fold growth in investments in household storage technologies.

To conclude, media reports discouraging investment in grid storage only tell half the story, especially considering the expansion of decentralized power. However in regions with lower retail electricity prices like in Switzerland and/or higher financing costs, decentralized storage will not expand without further measures. Therefore, performing energy storage research that results in further cost reductions, performance improvements, and better system integration is highly important – at ETH and beyond.

This blog was co-written by Tobias Schmidt and Suzanne Greene.

Further information

[1] externe SeiteAusbauziele der erneuerbaren Energien, Umwelt Bundesamt

[2] European Commission (2012): “Energy Roadmap 2050.”

[3] See e.g. New York Times: externe SeiteGermany’s Clean-Energy Plan Faces Resistance to Power Lines

[4] Also e-mobility is deliberately excluded in the report.

[5] Battke B., Schmidt T.S., Grosspietsch D., Hoffmann V.H. (2013):"A review and probabilistic model of lifecycle costs of stationary batteries in multiple applications", Renewable and Sustainable Energy Reviews 25: 240-250. doi: externe Seite10.1016/j.rser.2013.04.023 

Hoppmann J., Volland J., Schmidt T.S., Hoffmann V.H. (2014):"The Economic Viability of Battery Storage for Residential Solar Photovoltaic Systems - A Review and a Simulation Model", Renewable and Sustainable Energy Reviews 39, 1101–1118. doi: externe Seite10.1016/j.rser.2014.07.068

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