This separation of upstream and downstream components is important, as von Dalwigk noted that Europe is currently reliant on overseas imports for both: “we have some cell capacity in Europe but the mid- and upstream are still lagging behind,” she said.
Von Dalwigk said that Europe is likely to need to import more “cells and cars” from China into Europe to meet its battery demands, suggesting that the future of the European battery supply chain could be described as either uncertain, or reliant on overseas imports.
In response, von Dalwigk discussed a proposal currently under development by ReCharge that is “a more holistic approach to establishing a battery industry in Europe,” which includes four components: innovating, producing buying and securing batteries
These components require greater attention in Europe and von Dalgwick noted that each component needs to be considered alongside the others, and in relation to other legislation that is currently in effect in Europe.
The potential of more local manufacturing to help Europe to achieve its BESS deployment targets in light of market uncertainty came up as a theme during the morning’s discussions.
A ‘regulatory pendulum’ ahead for Europe
The future of European BESS was linked to the swinging of a “regulatory pendulum” by Coen Hutters, energy transition specialist at RaboResearch, the research arm of Dutch bank RaboBank, who delivered a presentation after von Dalwigk.
The reference to a “pendulum” echoes a metaphor used in a discussion earlier in the summit, and Hutters suggested that the future of European BESS will include both positive and negative developments.
“What we see—and this has been a topic of the last two days—is a regulatory pendulum for BESS,” he said, arguing that inconsistent growth in the UK market could set an example for Europe as a whole to follow. “We see that European BESS has grown in waves; we saw this hockey stick going up, but year to year, if we look at how BESS is growing in the UK, we see that it grew in ups and downs and that is [reflected] across Europe.”
Hutters also argued that the uncertain future of European BESS could create opportunity; he said that RaboBank expects wind and solar generation in Europe in 2040 to be four times higher than in 2020, demonstrating a clear need for continued battery investment and deployment, which will require a range of new financial mechanisms.
“In Germany we now have the inertia market coming up,” he said, echoing an earlier panel discussion on the inertia market in Germany. “This revenue stack, and this whole business model for batteries, is changing. If we look at the fundamentals, as wind and solar grow and natural gas remains in the market, we see slowly that the dayahead spreads are increasing; in the long-term, where we expect batteries to be primarily generating revenues through arbitrage, this is a positive feature of the market.”
Strengthening manufacturing capacity key
Ultimately, according to Jennifer Karle, policy officer at the European Commission, who delivered a presentation to open the summit, Europe is currently “in the key implementation phase” as it looks to navigate this uncertain future.
“[This phase will include] scaling up European manufacturing capacity for net zero technologies, energy intensive industries and their components,” explained Karle.
“The battery booster strategy is the battery-specific strategy and one of the most recent ones we’ve put forward,” continued Karle. “It aims at strengthening the battery ecosystem, particularly in Europe, and to scale-up production here [in] the transition from the initial investment to large-scale production.”