Around 2.1GWh of battery storage had been installed in Germany by the end of 2019, in households, at commercial and industrial (C&I) facilities and at large-scale in grid-connected applications.
While the home energy storage market and industrial segment both grew last year and are expected to continue growing, the large-scale segment slowed down and saw just nine projects deployed in the country during 2019, according to research gathered and analysed by academics at RWTH Aachen University, research group Forschungszentrum Jülich and battery expert group ACCURE.
Economics are challenging for large-scale projects
In 2018, 22 large-scale projects (>1MW rated output or >1MWh capacity) went online. This slowdown at grid-scale came largely as a result of the falling revenues battery project owners and investors can expect from providing frequency containment reserve (FCR). The research team pointed out that FCR is almost the sole source of financing for large-scale storage in Germany, meaning that the saturated nature of the market makes the economics more challenging.
In other words, it could be said that batteries are a victim of their own success, having been able to provide the vital grid-balancing service quickly and efficiently and subsequent competitive auctions for FCR have pushed prices down. The market rose quickly and there had been 68 projects installed by the end of 2019 cumulatively, adding up to 400MW of power and 620MWh of capacity. The nine projects added in 2019 totalled 54MW / 62MWh.
Prices declining to around €1,000 MW/week (US$1212) at the beginning of 2020 from around €1,500 the year before have made the market “increasingly unattractive to new participants”, the research paper: ‘The development of stationary battery storage systems in Germany – status 2020’, said.
However some promising developments are on the horizon in the near term. Earlier this year the German network regulator Bundesnetzagentur approved proposals by grid companies to create so-called ‘virtual transmission lines,’ in a big undertaking called GridBooster. As the paper points out, this should include two projects of 100MW / 100MWh each and another of 250MW / 250MWh providing redundancy and spare capacity to large transmission lines.
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