Highlights
€9bn
In 2030, the EU could avoid gas costs worth €9bn by capturing excess wind and solar.
80%
Between August 2023 and July 2024, nine EU countries saw solar alone exceeding 80% of their hourly domestic demand.
36 GWh
Germany could have avoided 36 GWh of expensive fossil power and up to €2.5mn fuel costs in June 2024 alone with 2 GW more of additional batteries.
About
This report analyses the system benefits of coupling renewables with clean flexibility, with a focus on the opportunity for pairing solar electricity generation and battery storage in the EU.
Using Ember’s dataset on hourly generation mix and power prices in the EU, the analysis demonstrates that midday solar abundance is a valuable resource. It illustrates the opportunity for clean flexibility to reduce the EU’s fossil dependance and avoid energy costs. It concludes with recommendations for next steps on clean flexibility in the EU to keep pace with ambitious decarbonisation goals, with a focus on deploying battery storage immediately.
Executive summary
More flexibility brings benefits
With faster clean flexibility rollout, the EU can get home-grown cheap renewable power around the clock.
Senior Energy and Climate Analyst, Ember
It just makes sense to capture all the low-cost renewable power we can. As solar continues to soar, batteries will help ensure that abundant power can be used at all hours. While the EU’s renewables scale-up has been rapid and ambitious, the same focus on clean flexibility is still lacking. This needs to be addressed, and quickly, for consumers and businesses to feel the benefits of reducing fossil dependence.
More flexibility brings benefits
Renewables are growing, flexibility must grow too
Within the next six years, wind and solar generation will surpass EU demand in certain hours of the year. Being able to shift that power to where and when it can be used through clean flexibility solutions is an enormous opportunity.
In this chapter:
Fossil reliance at time of peak solar production could be even lower if the power system was more agile. Even at times of abundant renewables, fossil power plants often continue generating. In some cases this leads to curtailment of renewable sources, such as in Poland. Some fossil plants are forced to maintain production as they are technically unable to ramp up and down quickly, or because network operators require them for ancillary services. In Germany for example, fossil generation very rarely drops below 10 GW, even during periods of negative electricity prices.
Progressive approaches taken by some grid operators suggest that more can be done to raise the instantaneous share of renewables that can be accepted into the system. For instance, the Irish network operator plans to raise the technical cap for wind and solar share of generation to 95%. Others such as PSE, the Polish grid operator, are more conservative, and limit solar and wind once they reach around 55-60% of the country’s electricity mix at any given time.
Pairing solar with batteries
Batteries can help capture the benefits of rising renewables
Renewables are already growing swiftly in the EU, particularly solar. Batteries will play a crucial role in keeping that momentum going.
In this chapter:
California provides a compelling example of how batteries can lower dependence on fossil fuels at times of low renewable output and high demand. Battery capacity was expanded thirteen-fold in five years, reaching 10 GW in April 2024, and has reshaped the way the grid is powered. The role of gas in the evening peak in April 2024 has been roughly halved compared to April 2021.
Europe could follow the same path to reduce its reliance on imported fossil fuels. Batteries have been growing rapidly in recent years in the EU. However, capacity is concentrated in a small number of countries.
Germany, in particular, is the EU front runner, accounting for 46% of total EU battery capacity by the end of 2023 and with 9.5 GW installed by June 2024. Germany could boost its battery capacity up to 11.4 GW by the end of 2024 under the best case scenarios of policy support and financial conditions, based on Ember’s estimations and market forecasts. If such battery capacity had already been installed this summer, Germany could have displaced 36 GWh of expensive fossil power during evening peaks in June alone. Hard coal, usually the most expensive generator in Germany, could have been completely kicked out of the mix in 12 hours, reducing prices during the most expensive hours of the day. This avoided fossil fuel electricity production could have saved € 1.3 million in hard coal imports or € 2.5 million in fossil gas imports, depending on which fuel was displaced.
Recommendations
Clean flexibility should be swiftly deployed to complement renewables
Improved policy frameworks for flexibility solutions can help capture the benefits of fast-growing wind and solar.
In this chapter:
An EU strategy for clean flexibility can guide the transition away from reliance on fossil flexibility and ensure the complementary deployment of clean flexibility solutions across the EU. The European Commission already issued guidelines for unlocking the potential of energy storage, but storage is only one tool in the flexibility toolbox.
- An EU action plan on electrification should include a strategy to unlock the potential of all clean flexibility sources. If the increase in electrified demand is managed smartly it can play a key role in providing flexibility and lower energy bills.
- Smarter solar and wind generation can also play an important role. For instance, adding panels facing west rather than south could help powering the late afternoon demand rise with solar power.
- Batteries, innovative energy storage solutions and demand-side flexibility enablers (e.g. smart heating and cooling systems, industrial processes and EV charging) should be priorities in the new Clean Industrial Deal to secure the value chain, skilled workers and circularity, ultimately benefiting the local economy and jobs.
Supporting Material
Methodology
Hourly electricity generation data
For the majority of European countries, hourly generation data by fuel and hourly net flows are taken from ENTSO-E’s transparency platform. Hourly load is then calculated as the sum of total generation and net imports.
For certain countries, a different source is used. These are:
- Austria uses ENTSO-E hourly data for all fuel codes except hydro. Hydro hourly data is scaled using the ratio of aggregated monthly values to Eurostat monthly data.
- Cyprus hourly data is taken from the transmission system operator (TSOC) website. Solar and bioenergy are disaggregated from the fuel source ‘distributed’ energy by assuming the minimum hourly amount per day comes from bioenergy, and solar is the difference between the ‘distributed’ value and derived bioenergy number.
- Germany uses energy-charts for gas and solar and Agora Energiewende for all other fuel codes.
- Estonia uses ENTSO-E hourly data for all fuel codes, but a small fix is applied to correct for errors with bioenergy and other fossil fuel codes between May and September 2022.
- Finland uses ENTSO-E hourly data scaled with Eurostat monthly data for onshore wind, offshore wind, solar, gas, bioenergy and hydro fuel codes. All other fuel codes taken from ENTSO-E hourly data.
- Hungary uses ENTSO-E hourly data scaled with Eurostat monthly data for solar. All other fuel codes taken from ENTSO-E hourly data.
- Ireland data was provided by Green Collective
- Italy data comes from TERNA, the Italian grid operator.
- Netherlands data is taken from Nationaal Energie Dashboard.
- Poland data comes from ENTSO-E with the exception of solar generation pre-2021, which is estimated using insolation data and installed capacity numbers.
- Spain generation data comes from ENTSO-E. Flow data comes from ESIOS.
- Sweden solar generation comes from the system operator website, all other fuel codes are from ENTSO-E.
Estimation of excess wind and solar generation in 2030
The hourly domestic wind and solar excess across all EU countries is calculated as the difference between domestic solar and wind generation and domestic load. In this calculation, the following assumptions are made:
- The daily load profile in 2030 is based on ENTSO-E ERAA 2024 provisional input demand data. It is taken from the ‘National Trends’ scenario, which is the baseline scenario given current country policies. This scenario might underestimate the potential of demand side flexibility and smart electrification, however, this is hard to judge as ENTSO-E and grid operators do not disclose how these load profiles are generated.
- Solar and wind hourly generation is computed based on Ember’s estimation of solar, onshore and offshore wind installed capacities by 2030, multiplied by solar and wind capacity factors for 2030 using the climate year 2009. This climate year is generally considered to be conservative. Ember estimates of 2030 installed capacities are based on latest NECP figures where possible, otherwise national organisation estimates are used.
- The total EU excess is calculated as the sum of excess across each individual country. This does not take into account interconnection across the region.
Excess wind and solar generation in 2030 is translated into avoided fossil costs based on the following assumptions:
- It is assumed that domestic excess of renewables is either displacing fossil gas power at the same time in other countries (with interconnections) or fossil gas power at a later time in the same country (with battery or demand-side flexibility)
- This hypothetical shifting does not take into account interconnection constraints
- Fossil gas purchase cost in 2030 is based on settlement price for fossil gas with delivery at TTF in 2030, as traded on 5th September 2024.
- Fossil gas power plant efficiency (high calorific value) : 50%
Simulation of the benefits of additional battery storage
- A simulation of additional battery capacity in Germany in June 2024 is run using an additional 1.9 GW of batteries with 1.6 hours duration. This duration is in line with the average duration of batteries currently in operation in Germany as of July 2024. The additional battery capacity is estimated based on Solar Power Europe’s high scenario.
- The additional batteries charge during times when Germany is exporting and generating solar power, subject to constraints of the maximum charging rate per hour (1.9 GW) and maximum power storage capacity (3.04 GWh).
- The additional batteries discharge with a flat rate in the 2 evening hours of 9 pm – 10pm, when there is no solar and generally more hard coal in the mix, discharging up to 1.9 GW per hour
- Additional battery discharge displaces fossil generation in those hours. In Germany during 2024, fossil gas and hard coal have alternated as the marginal price setter, therefore two examples are given of the cost: one if the batteries had displaced fossil gas, the other hard coal.
- Fossil gas purchase cost in June 2024 is based on average settlement day ahead price for fossil gas with delivery at THE in June 2024
- Hard coal purchase cost in June 2024 based on average month ahead settlement price for API2 in June 2024.
Acknowledgements
Green Collective for providing Irish hourly data.
The authors would like to thank several Ember colleagues for their valuable contributions and comments, including Sarah Brown, Ali Candlin, Reynaldo Dizon, Dave Jones, Nicolas Fulghum, Sam Hawkins, and others.
We would also like to extend our gratitude to Solar Power Europe for insightful comments.
Header imageJT Energy Systems GmbH new energy storage facility in Bobritzsch Hilbersdorf, Germany.
Credit: dpa picture alliance / Alamy Stock Photo