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Position Statement

Solar and Storage Policies in the EU: Good reasons to be optimistic

EuPD Research’s well established annual gathering of German industry leaders in the battery storage and solar power sectors has a new name. For the first time, it is called ‘European PV & Energy Storage Market Briefing,’ emphasizing the increasing importance of several solar and storage market in Europe.

At SolarPower Europe, the association of the European solar sector, we very much appreciate this broader scope. While the solar power market in Europe has been in a transition phase over the last few years, the combination of solar and storage is the perfect fit to lift solar power to the next growth level. And after the KFW program has helped kick-starting a first battery storage demand surge with several players in Germany, other countries on the Continent are increasingly seeing investments in solar & storage as well.

But to allow the combination of solar & storage to provide its full potential in Europe, it is important for a dynamic and adequate regulatory environment to keep pace with the quickly changing technology developments. That’s why SolarPower Europe has published policy asks we consider crucial to develop appropriate frameworks for solar and storage on European and national levels.

What solar and storage need

First of all, we need an EU-wide definition of electricity storage, which also clarifies the rights of active consumers (prosumers) regarding storage. This means that consumers who generate and consume their own energy need to be able to own and operate storage devices without discrimination, while the stored electricity must be free of specific taxes or charges.

Regarding market design, we need an appropriate reform of the intraday markets for enabling large-scale solar plants to better take on balancing responsibilities. A real market for selling and procuring flexibility services must be developed, and we need rules and circumstances under which TSOs and DSOs may operate storage solutions.

Solar and storage offers many new business models in the electricity markets. To enable this, the exchange of electricity on a community scale via collective self-consumption schemes must be possible for active consumers, while third party intermediaries should be allowed to operate active consumers’ electricity storage devices via pooling. We also need clear rules regarding data transparency and access for all stakeholders.

And finally, it’s about remuneration: Active consumers should be remunerated fairly for providing their devices to deliver services that support the electric grid. To achieve fair remuneration and service provision, tariffs must provide consumers and service providers with price signals to be able to act upon market developments and system needs. At the same time, distribution grid tariffs must be “fit for the energy transition,” incentivizing consumers to invest in technologies such as storage and advanced meters to allow the smartening of distributed solar PV.

What the European Commission offers

The good thing is that the European Commission (EC) has addressed many of our asks in its recently published ‘Clean Energy For All Europeans’ Package, which contains eight legislative proposals on energy policy that are supposed to prepare the framework for the energy transition in the EU. While several proposals need be changed (including way too low 2030 RES targets and an insufficient framework for limiting development and use of capacity mechanisms), many of those relevant for active consumers are actually quite good for solar and storage. The EC package proposes, among others, a proactive European framework for self-generation and consumption, an enabling framework for solar and storage applications, and an adaptation of markets rules (day-ahead, intraday, balancing) to make them fit for variable solar electricity.

It’s now the European Parliament’s turn to comment on the EC’s legislative package – which means for SolarPower Europe and its members the next round to first safeguard the surprisingly many proposals that are in ‘solar & storage’s’ favor while pushing for those topics to be altered that are still standing in the way between a very modest EU solar market in transition today and a solar market size that matches the European Commission’s ambition to be a global leader in renewables.

By Michael Schmela, Executive Advisor, SolarPower Europe