Of the 6,124.249MW of capacity that entered the auction, 94.42% was awarded an agreement. Battery storage projects totalling 627MW were awarded contracts in the UK's 2023-24 Capacity Market auction yesterday (14 February).
Image: Harmony Energy. Battery storage projects totalling 627MW were awarded contracts in the UK’s 2023-24 Capacity Market auction which concluded yesterday (14 February), nearly a two-thirds jump on last year’s.
For high-price scenarios, storage PPAs can generate 180 MEUR/year in 2030 in Europe We propose a contractual setup, the proxy storage power purchase agreement (PPA), to foster the deployment of energy storage technologies. We define a threshold price below which the PPA becomes financially attractive for PPA buyers.
The LCOS of PHS is predicted to range between 47 and 115 €/MWh (median: 80 €/MWh) in 2030. For LI battery storage, the lowest LCOS values reported for 2017 are about four times higher than the storage PPA threshold prices obtained for historical RE generation and electricity prices (see Table S4 of the Supplemental Information, 100% efficiency).
While arbitrage revenues could only cover a fraction of the costs of energy storage in past years, we show that proxy storage PPAs have the potential to foster unsubsidized energy storage installations in Europe within the next decade, especially when the storage is charged from the electricity grid or from co-located wind energy generation assets.
For grid-charge energy storage, threshold prices above 50 €/MWh are obtained in Spain and Denmark, and threshold prices above 60 €/MWh are obtained in Finland and Sweden. In the event that electricity prices remain as high and volatile as in 2021, proxy storage PPAs may enable a faster deployment of storage technologies.