Europe is working hard to increase the share of renewables in the continental energy mix. European Union nations have been working to add wind and solar capacity as quickly as possible against the backdrop of oil price shocks and supply chain volatility, and have made considerable progress in indigenous renewable installations. However, all of that additional capacity has outpaced the addition of supportive infrastructure like energy storage systems, leading to wasted surplus energy at peak production hours and increasing incidence of negative energy prices, causing turmoil in the region’s markets and potentially deterring much-needed future investment.
Last month, EU energy ministers took steps toward solving this issue by signing a historic agreement to triple the bloc’s energy storage capacity. It is estimated that the EU will need 200 gigawatt-hours (GW) of storage capacity by 2030. At present, the bloc has just 55 GW. Under the new agreement, member states pledged to add approximately 30-35 GW of new capacity by 2028.
“For the first time, the EU has established a clear political direction, turning storage from enabling technology to a delivery priority”, Walburga Hemetsberger, CEO of SolarPowerEurope, was recently quoted by Euronews.
Europe is currently experiencing its third energy crisis in just four years, and long-term solutions like energy storage are critical to ensuring that it doesn’t keep happening. And now, Europe isn’t just struggling with oil price shocks thanks to the wars in Ukraine and Iran; it’s also dealing with intense heat waves that drive up energy utilization as well as the looming spectre of AI data center energy demand. All of that round-the-clock energy demand will require a steady stream of energy, and Europe doesn’t want to have to rely on energy imports to get it.
PV magazine warns that “Europe’s electricity markets could face greater volatility in the third quarter of 2026 as weather conditions, high solar output, and limited flexibility resources widen the gap between midday renewable generation and evening demand peaks.”
Wind and solar energy are variable, meaning that their production is reliant on uncontrollable factors like the weather, the time of day, and the season. Unfortunately for us, these production patterns are often at odds with demand patterns. Energy storage can help to synchronize demand and supply by capturing surplus energy at peak production hours and feeding it back into the grid when demand outpaces supply.
Ramping up the amount of available energy storage serves two primary functions: it provides greater energy security and utilization of intermittent renewable energies, and as a function of that security, it allows the EU to use fewer fossil fuels. By storing renewable energy to use when the sun is no longer shining at the wind has stopped blowing, the EU can avoid relying on fossil fuels to fill those supply gaps.
“Without optimised storage, the EU remains dependent on imported fossil gas to fill gaps when the sun sets or winds fade,” explains Euronews. “Despite renewables supplying 44 per cent of EU electricity, the bloc still imports around 55 per cent of its total energy, including oil and gas.”
Moreover, a failure to install adequate energy storage has led to major market volatility, with unneeded clean energy flooding the grid at peak production hours and even driving prices below zero. Last year, Europe experienced a record number of hours of negative energy prices, resulting in utilities effectively paying consumers to take energy off their hands for as much as €20 per megawatt hour. While this is great for consumers, it’s terrible for utilities and for the renewable energy sector overall, which may fail to attract investors if solar and wind expansion isn’t paying off.
By Haley Zaremba for Oilprice.com
