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    Invested in renewables

    Cables and batteries: the next big thing?

     

    Integrating renewables into energy networks is a major challenge. Here's how the sector is tackling the issue and some innovations to expect in the coming years.

    Part of the series "Invested in renewables" 15 October 2024

    A massive balloon looms over the Italian island of Sardinia. It is full of carbon dioxide, one of the main greenhouse gasses causing dangerous changes to our climate. Energy Dome uses the balloon, which it calls “the dome”, as the key component of its “super-battery”. The Milan-based startup believes the very gas responsible for global warming could play a pivotal role in combatting it.

    “Renewables are currently taking the lead in terms of power production, but they come with a catch —the sun doesn’t always shine, and the wind is not always there,” says Paolo Cavallini, Energy Dome’s chief of staff. “At the same time, we need renewable electricity day and night. Hence, we need long-duration energy storage.”

    Energy Dome’s balloon battery exploits the fact that, unlike air, carbon dioxide can be liquified under high pressure without the need for energy-intensive cooling. It uses excess energy from the local grid during the day, normally supplied by solar power, to compress and liquify the gas, storing it in steel tanks. The heat generated as a by-product during the process is stored in special Thermal Energy Storage units.

    When there’s a need for electricity, the process is reversed. The liquid carbon dioxide is heated through the storage units, turning it back into a gas. The gas passes through a turbine, generating electricity, before going back into “the dome”.

    “The whole process is a closed loop, giving back to the grid 75% of the energy initially used during charging, making it highly efficient,” says Cavallini. “It can last 30 years without any kind of degradation, contrary to other electrochemical technologies that quickly degrade."

    The technique can store energy for up to 10 hours at about half the cost of lithium-ion batteries.

    Energy Dome’s demo plant, the first of its kind, has been in operation for two years. It's building a full-scale plant in Ottana, Sardinia, that will be capable of generating 200 megawatt hours of electricity in a single discharge. That's equivalent to 2 439 Tesla Model 3 "Long Range" batteries.

    Why do we need electricity storage?

    The European Investment Bank and Bill Gates’s Breakthrough Energy Catalyst are backing Energy Dome with €60 million in financing. That's because energy storage solutions are critical if Europe is to reach its climate goals. Emission-free energy from the sun and the wind is fickle like the weather, and we'll need to store it somewhere for use at times when nature chooses to withhold its bounty.

    To fight climate change, the European Union has an ambitious plan to transition to a carbon-neutral economy by 2050. To meet this goal, Europe will eventually have to shut down all its carbon-emitting coal and gas power stations and replace the lost generation capacity with emission-free sources, particularly renewable energies such as wind and solar. Spurred by the strategic imperative of weaning itself off Russian gas, the European Union aims to increase the share of renewables in its energy system to 42.5% by 2030, up from 23% in 2022. The European Commission estimates that this will require more than two-thirds of EU electricity generation to be from renewables.

    But simply replacing fossil-fuel power stations won’t be enough. Europe needs to produce more electricity. That's because demand is set to soar, as other industries turn towards electrification to meet their own decarbonisation goals and as combustion-engine vehicles are replaced with electric ones. All in all, the share of renewables in electricity generation will have to increase between 60% and 70% by the end of the decade, according to Bruegel, a think tank.  

    “Energy storage stabilizes prices, manages renewable energy variability, and encourages investment."
    Andrea Alessi

    European Investment Bank Renewable Energy Engineer

    Transition at a turning point

    The transition is already well underway. According to energy think tank Ember, more than 30% of the world’s energy now comes from renewables and we have reached a turning point where power from fossil fuels should start to decline. Solar and wind power are growing much faster in the European Union than in the rest or the world. In 2023 new solar and wind capacity in Europe accounted for 17% of global total and the European Union generated 44% of its energy from renewables, the think tank says.

    But to meet increasing demand for electricity and reconcile the mismatch between demand patterns and the weather, Europe has to invest massively not only in new generation capacity but in two other critical areas: energy storage and the power grid. Bruegel estimates that investment in electricity generation and storage alone may need to double to about 1% of annual European Union gross domestic product, while the European Commission puts the price tag on grid investments alone at €584 billion.

    In this article, we look at a number of innovative energy storage technologies being developed in Europe—and the challenges of upgrading power grids to serve a decarbonised electricity system.



    “With variations in the production of renewables, you need a solution to stabilise the energy production and the offer of energy to the market that has to cope with different needs. Batteries can assist in storing energy for both short and longer duration.”
    Andrea Alessi

    European Investment Bank energy storage engineer

    The power of chemistry

    To provide stable electricity whenever it’s required, regardless of the weather, an electricity system based largely on intermittent renewables like wind and solar would need to store significant amounts of energy as a back-up for windless or cloudy days.

    Chemical batteries, like the lithium-ion batteries used in mobile phones and electric vehicles, are a promising option.

    In France's Gironde region, Amarenco Solar is developing large lithium-ion batteries to enhance the stability of renewable energy supply. The company is building a 105 MW lithium-ion battery that could power up to 2 490 electric cars. This battery, one of the largest in terms of power capacity in Europe, will help the French transmission system operator RTE balance the grid by storing energy from renewables when it exceeds what is needed and releasing it when demand is high. 

    The European Investment Bank is lending €16.5 million to help finance Amarenco Solar’s commercialisation and deployment of the project. The financing comes under the Bank’s European Commission-backed Innovfin Energy Demo Projects mandate, which supports innovative first-of-a-kind demonstration projects that contribute to the energy transition, when they are at the pre-commercial stage.

    Meanwhile, in Norway, a groundbreaking initiative is underway to construct a large-scale plant for the industrial production of clean lithium-ion battery cells for battery energy storage systems. Utilising innovative manufacturing processes and renewable power, Freyr Battery Norway aims to produce battery cells with the lowest carbon footprint, using sustainably sourced and traceable materials. The company benefitted from project development assistance by the European Investment Bank and then a grant from the European Commission under the Innovation Fund, a major global funding program supporting net-zero and innovative technologies. This fund aims to decarbonize European industry, support climate neutrality, and enhance competitiveness, with projects receiving Project Development Assistance and specialized advisory support from the European Investment Bank.

    And in Douai, France, AESC's gigafactory is preparing to manufacture a significant quantity of lithium-ion batteries for electric vehicles. The company has secured €449 million in financing from the European Investment Bank.

    “Right now, the presence of renewables in the European market is close to 40%. To go from 40% to 90%, we need storage of a duration in between 10 and 24 hours.”

    Paolo Cavallini
    Chief of staff, Energy Dome © Freyr

    The power of physics

    While chemical batteries are a promising solution for many situations, they have some shortcomings for large scale application. Integrating batteries into the power grid can be expensive and they only provide power for a few hours. This limitation becomes particularly problematic on days without sunshine, when the shortfall in electricity generated can last several hours. Another disadvantage of batteries is that they require raw materials such as lithium that are not abundant in Europe and whose mining and extraction process can be environmentally damaging. 

    To deal with the challenge of intermittency, electricity systems need longer lasting solutions that can provide backup power for several hours or even days.

    Energy in motion

    Mechanical storage systems are arguably the simplest, drawing on the kinetic forces of rotation or gravitation to store energy. These systems often use mechanisms like flywheels or suspended weights to harness the stored potential energy in an elevated mass.

    Gravitricity, a start-up based in Scotland, is developing a 4 to 8 megawatt mechanical energy storage project in a disused mine shaft. Its technology operates like an elevator, using excess electricity from renewables to elevate a solid, densely packed material. The denser the material, the greater the energy storage capacity. When energy release is required, the weight gradually descends under the influence of gravity. As it lowers, reinforced cables attached to the weight drive a series of motors, generating electricity.

    The ability of Gravitricity's batteries to discharge energy for up to eight hours makes them ideal for storing solar power. They can absorb surplus solar energy during daylight hours and release it during the night, effectively balancing energy supply and demand.

    Upon full implementation, Gravitricity anticipates each battery will be able to discharge between 1 megawatt and 20 megawatts at peak power, providing energy for up to eight hours. A 20MW power system could sustain 63 000 homes for each hour of discharge.

    Following the successful operation of a 250 kilowatt demonstration project in Edinburgh, the European Investment Bank provided project development assistance through the Innovation Fund.

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    “In 2023, the European Investment Bank invested €20 billion for projects in energy efficiency, renewable energy, electricity networks and storage in the European Union.”
    “In 2023, the European Investment Bank invested €20 billion for projects in energy efficiency, renewable energy, electricity networks and storage in the European Union.”

    Pumping the energy

    Pumped-hydro energy storage is one of the oldest and most widely used large scale energy storage technologies. It works like this:

    • Water is stored in two reservoirs at different elevations.
    • When there is surplus energy, water is pumped from the lower reservoir to the higher one.
    • When the stored energy is needed to meet peak demand, the water is released back down to the lower reservoir, powering turbines as it descends and generating electricity. 

    The process is simple and effective. It’s cost-effective and energy efficient, all without generating greenhouse gas emissions during operation.

    In northern Portugal, Iberdrola has built three large new hydroelectric dams, including a pumped-storage plant, on the Tâmega and Torno rivers. The facility has a total capacity of 1 158 megawatts and is the largest hydroelectric power plant to be developed in Europe in the last 25 years.

    With an annual production capacity of 1 766 gigawatt hours, the Tamega complex can provide enough energy for nearby towns and cities, including Braga and Guimaraes, which have over 440 000 households. It can also store 40 million kilowatt hours, which is equivalent to the daily electricity consumed of 11 million people

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    By diversifying Portugal’s electricity generation and reducing oil imports, this project is expected to reduce carbon emissions by 1.2 million tonnes a year and cut over 160 000 tonnes of oil imports. It will also contribute to economic activity and employment in the region, with the construction phase of the project estimated to generate 3 500 direct jobs and 10 000 indirect jobs.

    Iberdrola also plans to develop two wind farms with a combined capacity of 300 megawatts, which will transform the Tamega complex into a hybrid power plant. The European Investment Bank provided a €650 million loan to Iberdrola, signed in 2018, to finance the project.



    A balancing act

    Storage capacity isn’t the only investment electricity grids need to prepare for the integration of renewables. There are  a number of other challenges for grids.

    • The intermittent and weather-dependent supply of electricity from sunshine and wind makes it difficult for grid operators to predict and manage electricity supply and demand. At times, the amount of electricity being generated may exceed demand. Without adequate storage capacity, this can force wind farms, for example, to turn off turbines to reduce their output.
    • Because wind farms and solar parks are often located far from consumers in cities or industrial sites, new transmission and distribution lines may be needed.
    • Reliance on renewables can make it more difficult for grids to maintain a stable electrical frequency. This poses a risk to their stability, as it makes the system less able to withstand sudden disturbances, like the loss of a large generator, or a sudden drop in wind.

    “We expect a massive increase in the need for renewables. The challenge is to understand where the future flows will take place and which routes will be busiest.”

    Mike Karaschinsky
    Division manager, TEAG © TEAG

    A networking event

    The distribution grid operator in Germany’s Thuringia region, TEAG, is one of many in Europe investing now to address these bumps in the road to decarbonisation. Known as “the green heart of Germany” for its dense forests, Thuringia generates more than 57% of its electricity from renewables, including 22.4% from wind.

    In April 2024, TEAG signed a €400 million loan with the European Investment Bank to help finance a €600 million investment programme to upgrade its sprawling regional network. It serves 620 municipalities, many of which are small, with only 10 000 to 20 000 inhabitants.

    “We expect a massive increase in the need for renewables,” says Mike Karaschinsky, division manager at TEAG. “Germany has gone from a very centralised system based on coal and nuclear power plants located close to consumption centres to a very decentralised system where generation takes place where the weather conditions are best. The challenge is to understand where the future flows will take place and which routes will be busiest.”

    In addition to new, durable, high-capacity cables and sub-stations, the regional distribution network operator is also investing heavily in digital technologies, including smart meters and IT security.

    “With the increase in electromobility, with car batteries and charging systems that can feed back into the network, we need to invest in a much more intelligent network,” says Karaschinsky.

    Between 2013 and 2023, the European Investment Bank has lent over €30 billion to support grid upgrades in the European Union worth more than €74 billion. But if grids are to become an enabler of the green transition rather than a bottleneck, much more needs to be done.

    In its November 2023 communication "An EU action plan for grids”, the European Commission said that permit procedures for grid reinforcements currently take 4 to 10 years and even as long as 10 years for new, high-voltage lines. This would need to be dramatically shortened to keep the green transition on track.

    In total, the Commission estimates €584 billion in investments will be necessary for electricity grids by 2030, with the majority going into local distribution networks to make them “digital, monitored in real-time, remotely controllable and cybersecure”.

    To help ease the situation, the Commission has proposed a 14-point action plan to improve the long-term planning of grids, accelerate permit procedures, and improve access to finance for grid projects – both at the transmission and distribution level.

    Better integration between national networks could also improve efficiency and potentially cut fuel use by as much as 21%, according to the Bruegel think tank.

    Legislative changes are also vital. In March 2023 the European Commission proposed a sweeping reform of the EU electricity market, which aims to reduce price volatility for consumers and create more favourable conditions for investors in low-carbon energy and energy storage solutions.



    “We expect a massive increase in the need for renewables. The challenge is to understand where the future flows will take place and which routes will be busiest.”
    Mike Karaschinsky

    Division manager, TEAG