Germany to support battery storage as next move in renewables
Germany has been a leader in Europe’s push toward more renewable energy generation, helping to make solar more affordable to consumers and keeping red tape to a minimum. With its record of making renewables more affordable, Germany is also taking the next step and investing heavily into battery storage technologies for their renewables.
Over the past five years, Germany has been largely responsible for priming an 80 per cent fall in the price of solar modules. Now it is looking at bringing down the cost of the next piece in the puzzle of its energy transition – battery storage.
At its disposal is the giant state-owned but independently run development bank KfW. It performs in the clean energy space a similar function to Australia’s recently created and imminently doomed Clean Energy Finance Corp, but at such a scale that is not contemplated in most countries, possibly with the exception of China.
It has assets of more than €500 billion, and lent €73 billion last year – with one-third of that targeted at renewables and climate investments. Over the past three years it provided €24 billion in loans for energy efficiency investment in homes, leveraging a total investment of €58 billion, helping insulate and seal more than 2 million homes, employing 200,000 people a year and saving more than 150 million tonnes of carbon.
Even though Germany is helping to mitigate the costs of implementing, they are taking a more conservative approach this time around.
Unlike the subsidised uptake of solar PV enabled by the deployment of generous feed-in tariffs, the support mechanism for energy storage is more cautious. Indeed, KfW is looking for investors who are willing to take a loss on their investment.
“The market for energy storage systems is very young … batteries are still very expensive … and the economics don’t yet work,” program manager Dr Holger Papenfuss, told RenewEconomy in an interview in KfW’s sprawling headquarters in Germany’s financial centre of Frankfurt this week.
In fact, even with the assistance of the loans and grants, it is still not economically viable. Which is why KfW has stepped in to ensure that the commercial banks provide the funds for development.
The program is relying on “early adopters” and “renewable pioneers” – the same profile that were the first to get into electric vehicles, or solar panels a decade ago – who have the money and are willing to accept a negative return on their investment. Right now, Papenfuss says, people would be better off selling power to the grid.
While Germany and KfW are being more conservative with their investments this time around, they are still working to bring down the price of storage for renewable energy.
Read more at RenewEconomy.