This article will focus on energy storage europe to introduce the development status, future trends, and market driving forces of the European energy storage market. It will also introduce the development situation in detail using the German energy storage market as an example.
1. Current status of energy storage europe
Energy storage europe currently mainly focuses on behind the meter battery storage and large-scale storage. In 2022, the proportion of newly installed capacity of household storage, large-scale storage, and industrial and commercial energy storage will be 48%, 46%, and 6% respectively.
According to EASE/Delat-EE data, the newly installed capacity of household storage, long duration energy storage, and industrial and commercial energy storage in 2022 will be 3.98GWh, 3.86GWh, and 0.5GWh respectively.
2. Energy storage europe driving force
(1) Energy storage europe is an urgent need for distributed resource access. Europe’s distributed photovoltaic installed capacity accounts for a high proportion and is growing rapidly, but its output is random, indirect, and volatile, which affects the safe and stable operation of the power grid, and Europe is mainly dominated by distributed photovoltaics. In addition, the promotion of charging piles will worsen the load on the distribution network, and energy storage can improve the stability and reliability of the power grid.
(2) The degree of electricity marketization is high, and the perfect market mechanism provides reasonable benefits for industrial and commercial users to configure energy storage.
(3) High subsidies on the policy side enhance the willingness of industrial and commercial users to allocate reserves.
3. Current status of household energy storage europe development
Looking at the European market, Germany is the largest country in Europe with household storage installed capacity, and Italy’s energy storage installed capacity is also growing very fast. The installed capacity of German household savings from January to October 2023 was 3.77GWh, a year-on-year growth rate of 138%; of which the installed capacity in October 2023 was 264MWh, a year-on-year growth rate of 41.9%, and the month-on-month growth rate was -32.1%.
Energy storage europehas a high proportion of new energy, and energy storage demand is growing rapidly. Countries such as Germany, the United Kingdom, and France have great potential for energy storage development. According to calculations based on solar power EU and EnergyTrend data, the compound growth rate of household storage installations in Europe from 2023 to 2025 is still expected to reach more than 50%.
Although industry destocking is still in progress, based on the relatively high year-on-year growth in installed capacity in Germany, we are optimistic about the mid- to long-term growth of the European household storage market.
Comparing the European energy storage market, according to EIA data, the scale of energy storage (>1MW) put into operation in the United States from January to September was 4.3GW, a year-on-year increase of 43%. Comparing the planned and actual installed capacity of energy storage announced by EIA every month, we believe that the delay in large storage installation in the United States is still obvious.
For example, the planned installed capacity in September 2023 was 1703MW, but the actual installed capacity in September 2023 was only 593MW. Looking forward, we believe that with the decline in interest rates, the easing of the supply chain crisis, and the advancement of policies such as IRA, the demand for large storage capacity in the United States is expected to be released.
According to data, in 2023Q1-Q2, the installed capacity of household storage in the United States was 293.2MW/769.4MWh, -1.9%/+8.5% year-on-year; the installed capacity of industrial and commercial energy storage in the United States was 101.6MW/310.3MWh, +14.3%/+53.7% year-on-year.
According to analysis, household storage installations are more dependent on the growth of household photovoltaic installations. Due to project delays in the switch from NEM2.0 to NEM3.0, the household storage market is expected to grow rapidly in 2024; the growth of industrial and commercial energy storage systems may be due to supply chain challenges and Lack of policy incentives creates impact.
4. Energy storage europe market slows down
According to statistics, the energy storage europe household market demand increased by approximately 5.1GWh in 2023H1. Q2 has basically digested the inventory at the end of 2022 (5.2GWh), and the remaining inventory is approximately 6.4GWh, which is approximately 8 months of installed capacity in the European household energy storage market.
It is predicted that the European household energy storage market will reach 9.57GWh in 2023, and inventory clearance in the second half of the year will reach approximately 4.47GWh; inventory clearance will continue until the end of 2023, and European inventory levels will return to a reasonable scale (approximately 4.5GWh) by the end of 2023. ).
According to predictions, major countries around the world are expected to add more than 12GWh of newly installed household storage capacity in 2023; in 2022, the global energy storage market will add 7.38GWh of newly installed capacity, of which CR5 (Germany, Italy, Japan, the United States, and Australia) account for 75.6%.
Among them, the new installed capacity of household energy storage in Germany will maintain strong growth in 2023, with the newly installed capacity reaching 3.51GWh in the first three quarters, an increase of 84% compared with the whole year of 2022;
According to the current installation speed in Germany, it is expected that new installed capacity will be added in 2023. The newly installed capacity was 4.34GWh, +136% year-on-year.
According to data from the European Energy Storage Association (EASE), Europe will achieve 4.5GW of energy storage installed capacity in 2022, a year-on-year increase of 80.9%, of which large storage and commercial and industrial energy storage will be approximately 2GW, and household storage will be approximately 2.5GW.
Among them, Germany will achieve a total of approximately 1.5GW of installed capacity in 2022, a year-on-year increase of 70.0%, of which Germany has 1.2GW of household storage capacity, 0.2GW of large storage capacity, and 0.1GW of industrial and commercial energy storage capacity. Germany is the largest energy storage market in Europe. In 2022, Germany will account for approximately 34% of Europe’s installed energy storage capacity.
The EU launched a “REPowerEU” energy plan in May 2022, which proposed increasing the renewable energy share target to 45% in 2030. In the interim agreement in 2023, the final target was set at 42.5%. Under the general framework decided by the European Union to ensure energy security and promote the development of renewable energy, European countries have actively adopted various types of policies such as government subsidies, tax exemptions, and financing support to promote the installation of new energy equipment.
Among them, distributed installed capacity is an important component, bringing additional demand for household energy storage in energy storage europe.
In terms of inventory pressure, by the end of 2022, European household storage product inventories have climbed to historic highs. Coupled with the weak demand in the first half of 2023, shipments of household savings to Europe will further decline, especially the decline in shipments to Europe from international manufacturers.
5.Energy storage europe market: German market
In 2023, as natural gas prices fall, residential electricity prices fall, and European dealers continue to destock, dragging down performance, and the market becomes worried about the actual demand in Europe. However, the actual installation rhythm of the European market in 2023 still shows a strong trend.
According to statistics from ISEA&RWTH Aachen University, Germany’s household storage installed capacity from January to August 2023 was 3.04GWh, +158.0% year-on-year. According to ANIE statistics, in the first quarter of 2023, Italy’s energy storage installed capacity was 1.09GWh, +296.0% year-on-year. We believe that the slowdown in shipments in 2023 is mainly due to the temporary impact of destocking.
As the main country in energy storage construction in Europe, Germany has taken the lead and launched a combined attack to support household savings. Germany’s support for household savings originated earlier, using a combination of financing, taxation, subsidies and other policies.
At present, Germany has two latest main support policies for household storage: First, the “German Renewable Energy Law (EEG 2023)”: for household solar energy storage, the remaining grid-connected electricity price has been increased, and the grid-connected subsidy can reach a maximum of 13.4 euros. points/kWh.
The installed capacity limit for paying taxes and fees for household energy storage has been increased from 10kW to 30kW. The second is the “2022 Tax Bill”: Germany exempts some of the income tax on the feed-in electricity price, exempts the import, purchase, and installation of small rooftop photovoltaic and energy storage systems from the 19% value-added tax, and simplifies the value-added tax exemption process.
The two policies have reduced the payback cycle of household optical storage equipment by increasing electricity sales revenue and reducing system costs, thus improving the economics of household storage in Germany.
The current rate of return on energy storage is still high. Compared with the previous two years, the current energy storage products are more diversified, the cost of raw materials such as batteries has also gradually declined, and demand is also growing. It is expected that household storage in Europe will still have high growth in the future power.
The European energy storage market is mainly driven by the demand for energy self-control and high economics. It is expected that shipments will return to rapid growth in 2024, and there is still room for improvement in the penetration rate of household storage in energy storage europe.
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