EU attempts to clarify energy storage position

The European Union’s position on how to define electricity storage has been revealed courtesy of a leaked draft version of the EU’s latest internal electricity market directive.

The document shows that transmission system operators and distribution system operators will be barred from ownership of energy storage technology, bar some exceptions. However as the EU is still working towards a definition there is not yet clarity on how the assets will be treated in terms of network charges.
Electricity storage
“Energy storage means, in the electricity system, deferring an amount of the electricity that was generated to the moment of use, either as final energy or converted into another energy carrier,” the draft, due to be published November 30, says.

Platts reports that the inclusion of the words “another energy carrier” brings power-to-gas concepts within the regulatory definition of energy storage. Power-to-gas turns excess power into hydrogen which is added to the gas system.

DSOs can own and operate storage where the regulatory authority has given consent, if they are used only for the efficient and secure operation of the distribution system and if other market actors have not come forward to offer services.

This is good news for DSOs as it will address situations where storage would be advantageous for system stability and security, but insufficient market incentives exist.

For example in remote sparsely-populated areas where the DSO is faced with either an expensive distribution system upgrade that serves relatively few people, or the installation of a storage device.

The directive, if passed into law in its current form, clearly positions energy storage as a service to be provided by third-parties to TSOs and DSOs wherever possible.

The TSOs and DSOs will be the market makers, deciding what services they require, but the provision of those services must be tendered for in a non-discriminatory way and supplied by third parties, such as a utility or an independent operator.

These, rather than the TSOs and DSOs, become the battery storage developers’ customers.

There is also a clear desire for “flexible” services to be incentivized and new wording says market operators shall provide products for trading in day-ahead and intraday markets with minimum bid sizes of 1 MW or less.

This is designed to encourage the participation of demand-side response, energy storage and small-scale renewables.

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