Policy Support Promotes Market Development

1. EU-level policies

 

The EU has introduced a series of policies to promote the development of battery energy storage systems. On March 14, 2023, the European Commission released a draft of the electricity market reform, and on July 19, the European Parliament formally voted to approve the electricity market design reform plan. The focus of this reform is to improve the liquidity and reliability of the long-term electricity market, encourage renewable energy generators to sign long-term power purchase contracts (PPAs) and government-authorized contracts for difference (CFDS) to reduce short-term price fluctuations, and encourage the grid to introduce more non-fossil fuel flexibility resources (such as energy storage and demand-side response), and provide them with reasonable investment returns through capacity markets and other means, emphasizing the important role of new energy storage in building a reliable energy system from the top-level architecture level.

 

On December 14, 2022, the European Parliament voted to approve the repowereu amendment, which plans to speed up the approval of various renewable energy projects including battery energy storage, and is expected to accelerate the deployment of large-scale energy storage projects in Europe from the actual implementation level. In addition, starting in 2025, batteries sold in the EU will have to report their carbon emissions, and a battery carbon footprint grading system will be implemented in 2028, prohibiting the sale of batteries that exceed specific carbon emission thresholds. Although this policy places higher demands on battery production, it will also prompt the industry to develop in a more environmentally friendly and efficient direction.