A Total Of 1072MW /1204MWh! By The End Of 2022, Germany Has Deployed A Total Of 149 Large-scale Battery Energy Storage Projects

According to a research report recently released by researchers at RWTH Aachen University in Germany, after several consecutive years of decline, the German utility-scale energy storage market will deploy a record 434MW/467MWh of battery energy storage systems in 2022.

The researchers found that in 2021, the residential energy storage segment continued to dominate the German energy storage market, but the underperforming large-scale battery storage segment recovered in 2022. picture

Seed and Greet battery storage systems are the only two large-scale battery storage systems used in electric vehicle charging facilities in Germany

According to Jan Figgener, a researcher at RWTH Aachen University in Germany, it was previously estimated that the scale of grid-scale battery energy storage systems deployed in Germany in 2021 would be only 36MW/32MWh, which means that the figure in 2022 will increase by 910%.

However, Germany's market share in residential energy storage still dwarfs that of grid-scale batteries: Germany deployed 145,000 residential batteries in 2021, totaling 739MW/1268MWh; by comparison, 2022 200,000 residential battery energy storage systems were deployed, totaling 1,164 MW/1,944 MWh. This represents a 52% year-on-year increase, while the capacity of residential energy storage systems, in this case below 30kWh, has increased by 60%.

Compared with other sectors in 2022, the deployment of commercial and industrial (C&I) energy storage systems with energy storage capacity of 30kWh to 1MWh is only 43MW/84MWh, and only 27MW/57MWh in 2021.

The authors of the report stated that by the end of 2022, the cumulative deployment of grid-scale energy storage systems in Germany will reach 1,072 MW / 1,204MWh, with a total of 149 large-scale energy storage systems. However, judging from publicly announced planned deployment of energy storage projects, Germany can deploy 1,123MWh/1,414MWh grid-scale energy storage systems in the next two to three years.

Compared with grid-scale battery storage markets around the world, the average size of Germany's energy storage projects is still relatively small, with about 77% of grid-scale projects having a storage capacity of less than 10MWh, although the report notes that Germany is already announcing Multiple 200MWh battery energy storage projects will be deployed in the future.

Germany's battery storage market continues to grow

The application scenarios of battery energy storage systems in Germany have begun to change. Ancillary services remain the dominant application, with around 658MW/750MWh of energy storage systems used for ancillary services to date. While almost all large-scale frequency control reserve (FCR) services were provided ad hoc until 2019, saturation of this market led to a decline in fees paid by grid operators and a corresponding slowdown in the growth of this market.

Today's energy market is characterized by high prices across the board, which means that the price of frequency control reserves (FCR) in Germany is still sufficiently attractive for energy storage systems. But this is not expected to last, with the recent introduction of the Automatic Frequency Recovery Reserve (aFRR) market increasingly becoming an attractive option. This market is estimated to be three to four times the size of Frequency Control Reserves (FCRs).

Large-scale energy storage systems for renewable energy integration in Germany are also increasing, with about 200MW/250MWh of energy storage systems currently in operation, and plans to deploy 700MWh of battery energy storage projects. This is partly due to the introduction of so-called "innovation tenders" by Germany's Federal Network Agency (Bundesnetzagentur), which awards contracts to projects combining two forms of clean energy technology. This has led to an increase in the deployment of solar-plus-storage projects.

Relatedly, Germany’s Federal Network Agency has increased the maximum feed-in tariff (FiT) that solar+storage projects can obtain through innovative tenders by 25% compared to previous auction rounds to $0.995/kWh. The previous round of auctions was woefully undersubscribed.

The research report pointed out that there are still 130MW/150MWh battery energy storage systems in multi-purpose operation in Germany. These energy storage systems combine functions such as user-side peak shaving with ancillary services.

Other use cases include 50MW/50MWh large-scale battery storage systems operating at large industrial sites, and battery storage systems deployed at electric vehicle charging stations.

The last use case highlighted by the report has generated some interest from the global energy storage industry, as it applies energy storage to German transmission system operator (TSO) Transnet’s “GridBooster” transmission project.

A 450MW/450MWh pilot storage system has been used in the transmission project, including a 250MW battery storage system awarded by Transnet to global technology provider Fluence. GridBoosters transmission lines add capacity redundancy, reducing the need for transmission system operators (TSOs) to invest in costly grid infrastructure, while battery storage systems help increase grid capacity.

These pilot energy storage projects are expected to come online within the next three years, and their sole application will be to balance grid operations.

In addition, long-term planning proposals submitted by some German transmission system operators (TSOs) to the German Federal Network Agency require approval to deploy more such projects.