EU needs far more battery storage to balance renewable power, article says

During the day, when the wind blows and the sun is shining, Germany and some other European countries often produce more electricity than they need. But limited battery storage has made it difficult to save that power for later, so gas-fired plants often have to cover the evening shortfall.

That is a problem Germany must solve if it wants to become climate neutral by 2045. Large-scale storage facilities for green power are seen as essential for keeping electricity prices stable and making a transition to 100% renewable energy possible.

The European Union, which aims to be climate neutral by 2050, currently generates around half of its electricity from renewable sources. According to data from the European Commission's Joint Research Centre, Europe already has about 14 GW of large-scale storage capacity.

Expansion is accelerating. The article says 84 GW of additional large-scale storage capacity is now in planning or under construction, a sixfold increase that is expected to come online in the next few years.

That matches a global trend, according to Bloomberg New Energy Finance. Its analysis found the fastest growth in large-scale storage is expected in Asia, especially China and India. In Europe, Germany and Italy are described as major markets because both already generate significant renewable electricity.

Falling costs are helping the market grow. Over the last few years, lithium-ion battery prices have fallen by about 20% a year. By 2030, an EU forecast expects battery costs to be half the 2022 level.

When small private systems and large-scale facilities are combined, EU storage capacity has increased tenfold since 2022. But the article says the bloc would still need another tenfold increase, to about 750 GW, to meet its climate goals.

Battery investment can also help stabilize power prices. Renewable electricity is especially cheap during the day and can even fall below zero when wind and solar output is high. That can force some renewable plants offline for a few hours and reduce profits.

When gas and coal plants come online in the evening to make up the shortfall, prices rise again, said Dirk Uwe Sauer, a professor and storage systems expert at Germany’s RWTH Aachen University. He told DW that midday electricity prices last year averaged about €0.03, compared with about €0.18 in the early evening.

Sauer said the price gap makes battery storage attractive economically, especially since natural gas prices have risen because of the wars in Ukraine and Iran. He said each additional storage unit can help moderate price spikes for both the renewables industry and consumers.

He also said Europe’s renewable expansion has been slowed by long approval processes, long planning periods and difficulty connecting battery storage to the grid.

Sauer said Europe spends about €80 billion a year importing energy from abroad, which creates dependency that renewables could reduce. He argued that battery storage and electricity grids must be planned together.

Alongside wind and photovoltaic facilities, local grids are needed to distribute power directly, and storage facilities are needed to save it for later, he said.

The article says Europe’s electricity grid is part of the problem. Many grids are more than 40 years old, and most were not designed to move large amounts of green electricity to where it is needed. Germany and other European countries need to modernize and connect grids to wind parks, solar farms and storage facilities.

The European Commission has previously said the EU would need to invest about €580 billion by 2030 to improve grids. Progress has been mixed. Germany has been planning about 16,000 kilometers of power lines for years, but only 20% is operational. The permitting process has recently been streamlined.

Even so, the €580 billion target looks unlikely. Data from the European Union Agency for the Cooperation of Energy Regulators shows about €35 billion was invested in 2024, and the amount is expected to rise to €47 billion by 2027.

Industry analysts do not expect the war in Iran to significantly affect battery-sector growth or grid expansion, despite global energy turbulence. Bloomberg BNEF says the conflict has had only a limited effect on the battery storage market, which is mostly based in China.

The war has pushed electricity prices higher because fossil-fuel shipments have been disrupted in the Strait of Hormuz, which could create short-term gains for battery operators. But Sauer said temporary crises are not a good basis for long-term investment decisions.

He said that by the time planned large-scale facilities are built and connected, the Iran war and the energy crisis will likely be over. He argued that governments need long-term goals because electricity grids are built for 40 to 50 years.

The article also says access to lithium and other metals needed for batteries is crucial for EU member states. The bloc is prioritizing raw-material strategy, supporting domestic rare-earth production, reducing dependence on China and developing secure supply chains. It also wants to promote recycling of critical raw materials such as lithium, nickel, gallium and cobalt.