EU seeks centralized energy storage solution

As part of the Save and Upgrade plan, only eight applications have been submitted thus far for the installation of home storage systems. It's important to note that these grants exclude new homes, which are expected to meet almost zero energy consumption standards.

None of the submitted applications have progressed to the installation stage. Furthermore, it remains unclear whether domestic consumers have independently adopted renewable energy storage units without seeking sponsorship.

It's worth mentioning that even if such cases exist, they are relatively rare, primarily due to the considerable cost involved for households.

To provide some context, the cost of a storage system typically ranges from 1,000 to 1,300 euros per kilowatt of storage capacity. An average Cypriot household, consuming between 800 and 1,000 kilowatt-hours biannually, can meet its energy needs by installing a 5-kilowatt photovoltaic system, which costs around 6,000 euros.

Additionally, there's an extra expense for installing the remote control mechanism and safety switch for photovoltaics, known as ripple control, which is now a mandatory requirement. This adds another 800 to 1,000 euros to the total.

Hence, the estimated cost for installing both a photovoltaic and storage system, along with ripple control, amounts to around 13,000 euros, excluding any project sponsorships. It's crucial to reiterate that the grants exclude new homes, which are expected to adhere to almost zero energy consumption standards.

Meanwhile, homeowners with photovoltaic systems still incur grid usage costs at a rate of 2.8 cents per kilowatt-hour. Photovoltaic systems generate excess electricity during sunny periods, which is stored in the EAC network, acting as a virtual storage battery with associated charges.

Additional charges, shared among all consumers, cover costs related to ancillary services, among others. However, consumers who opt for energy storage and become self-sufficient in their electricity needs are exempt from these charges.

It's worth noting that the Save and Upgrade plan represents one of the first instances where energy storage systems from photovoltaics are included in eligible expenses, yet only eight applications have been submitted so far. The announcement of the photovoltaic plan for all is expected by the end of December 2023, although it is unlikely to include home energy storage.

Based on European directive 2018/2001, consumers should not face disproportionate charges when producing, consuming, storing, and selling electricity from renewable sources.

The directive emphasizes the need to consider the contributions of self-consumers of renewable energy to climate and energy targets and to factor in the costs and benefits they bring to the broader energy system. In line with this directive, member states are generally discouraged from imposing charges on energy produced and consumed within the same location by self-consumers of renewable energy.

Furthermore, the directive highlights the importance of providing apartment residents with the same consumer rights as those in single-family homes. It's worth mentioning that a significant portion of consumers are renters, comprising approximately 30% of the population according to Eurostat data from 2021.

In such cases, the possibility of virtual net metering, which involves installing a photovoltaic system elsewhere to meet consumption needs, is an option. However, the facilitation of energy storage in such scenarios remains limited.

In July, a policy framework for energy storage systems and a public consultation on an aid plan for hybrid installations were announced. This framework includes the promotion of Central Energy Storage Systems, owned by the Electricity Authority of Cyprus (Networks Business Unit) and operated by the Transmission System Operator of Cyprus, pending approval from the European Commission.

If approved, the allocated budget for these schemes will be at least €40 million. The project's completion, subject to all necessary approvals, is expected to occur within 18 to 24 months for battery systems. In cases involving alternative storage technologies, the implementation timeline is anticipated to exceed 24 months.

[This article was translated from its Greek original]