Grid-scale batteries as a first-wave technology disruptor

Today, many countries are chasing ambitious renewable energy targets. This challenges the energy systems as more variable renewable energy (VRE), such as wind and solar, needs to be integrated. Specifically, as VRE makes up an increasingly larger share of the generation mix for electricity, less generation capacity becomes dispatchable and hence, the flexibility required to accommodate wind and solar in the grid when production exceeds or falls short of demand is going to increase drastically over the coming years.

The challenges associated with further VRE penetration in energy systems can broadly be categorised as pertaining to either the electricity market’s (lack of) transmission capacity or a lack of political will to drive the necessary investments and/or regulatory changes. In Northern Europe, the main challenge in reaching the VRE targets is the lack of transmission lines to transport electricity from production sites to the major centres of consumption. In other markets such as India, China and Brazil, the challenge is rather a lack of liberalised and efficient electricity markets that could help incentivise market actors to balance supply and demand.

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