This post is written by Aliaksei Patonia is a visiting research fellow at the Oxford Institute for Energy Studies and a ReThink.CEE fellow at the German Marshall Fund of the United States.

  • The problem: Transition to net zero carbon through supporting renewables alone will not be possible.

  • Why it matters: Some of the most promising renewable energy sources are intermittent and thus will not be able to deliver constant output, which is needed for the normal functioning of the power system. Until this challenge is addressed in a sustainable way, we will have to rely on fossil fuels.

  • The solution: Policymakers should focus on supporting sustainable energy storage since it facilitates the integration of renewables into the energy system of the future.

While the current energy crisis in Europe is yet to end, the prices for natural gas show no sign of any dramatic drop. On the contrary, with the ICE Futures Europe price per thousand cubic metres exceeding $1,000 on the 29th of September, they hit record highs. This spike has already taken its toll, as more and more energy-intensive companies such as those from the steel industry had to cease their activities due to the extreme cost of production.

Though these dramatic events owe to a number of factors, Ursula von der Leyen, the President of the European Commission, admitted that the continent, in general, is “too reliant on gas” and that “a speedy transition to clean energy would also make the bloc a more independent global player”.

While this statement is broadly right, a rapid shift to renewables alone is unlikely to bring the expected results. And this is why.

Supporting renewable energy

While the power of water and wind has been in use for centuries, it was not until 1980 and 1993 when the world’s first onshore wind farm and the first grid-supported solar system were respectively completed in the US. While Europe, at first, was slightly lagging behind, it pioneered offshore wind projects in Denmark already in 1991. Since then, these two types of renewables – solar and wind – have undergone a huge transformation when their costs gradually decreased so that they can now successfully compete with fossil fuels.

In fact, between 2009 and 2019, the price of electricity from solar declined by 89 per cent while the price of onshore wind electricity went down by 70 per cent. Apart from the obvious technological progress, the learning-by-doing process as well as the economies of scale, this price drop was possible greatly due to supportive government policies.

The official start of the EU support to renewables is normally associated with the 2009 Renewable Energy Directive (2009/28/EC), which first made renewable energy targets binding for all the EU member states. While, due to the geographical limitations, many other forms of renewable power (such as hydro and geothermal) have been paid significantly less attention, the progress in solar and wind technologies and businesses has been constantly spurred primarily by feed-in tariffs, auctions and tenders, fiscal incentives and direct subsidies. As a result of these policies, such energy transition champions as Denmark and Germany have almost transformed into renewable superpowers, as in 2020 they produced around half of their electricity from wind and solar.

When solar and wind fail

While building up wind and solar capacities is definitely the right direction to go, if the global community wants to reach net zero carbon by mid-century, these measures alone are not sufficient. In fact, since both solar and wind energy sources do not constantly produce electricity, they often tend to either under- or oversupply the energy system.

When stormy days are so windy that the power flows from wind parks overwhelm the electrical grid with excess power, grid operators are forced to pay customers to take the electricity to prevent the collapse of the power system, since the electricity grid has to be balanced at all times. In 2020 alone, Germany had 128 hours with prices in the red. This means that for more than five days the renewable electricity producers of the country were actually representing a problem, rather than a solution, to the challenge of sustainable energy management.

At the same time, with climate change accelerating weather instability, windy days are more often contrasted with periods of still air, which does not allow wind farms to generate enough power to supply the system. In the first half of 2021, Germany was not able to meet its expected wind power production targets due to the unusually still air. As a result, just like in most other countries, the system had to be balanced with conventional fossil fuels-based power plants. Unsurprisingly, in the case of Germany, those were coal-fired plants, the phase-out of which the country has been long advocating for.

Need for energy storage

As seen, operating renewables in a sustainable and balanced way often appears to be easier said than done. It is even more problematic to do, if one has to meet net zero carbon targets, as the usual way of balancing their over- or underperformance through power generation by combusting fossil fuels such as coal or natural gas will not be acceptable then. That is why, in such circumstances, applying energy storage technologies that would allow for large volumes of electricity to be preserved over a long time and, preferably, in a transportable form seems to represent the only way out.

At the moment, the only suitable storage options that would combine all these scale, time, and transportability features relate either to electrochemical (batteries) or ‘green’ chemical storage options (electrolysis-based ‘green’ hydrogen and ammonia). While both types of options are currently being developed by business pioneers, some governments have already realised their importance for the future of their energy industries. For instance, having considered their immense solar power potential, Australia announced the construction of the world’s biggest battery storage project. The EU, on the other hand, has declared intent to invest $430 billion in renewables-based ‘green’ hydrogen by 2030.

Though such initiatives are extremely important, it unlikely that, without additional policy support, both energy storage options will gain the respective scale and be fully competitive with fossil fuels within the current decade. This means that, if no supportive fiscal, regulatory, and financial assistance is provided to sustainable energy preservation projects, regions like Europe will still be very much vulnerable to the energy crises caused by fossil fuels for a long time. Policy support, in turn, will facilitate faster commercialization and build-up of large-scale long-term power storage technologies and thus make the process of balancing renewables available before 2030.

That is why, when the current energy crisis is over, policymakers in Europe should focus on supporting not only renewables but also energy storage. Of course, only if they don’t want to face any similar crisis again in the foreseeable future.

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