Electrical energy storage - first report issued by the President of URE
The President of the Energy Regulatory Office (URE) has prepared a report on power storage in Poland. The transmission and distribution network operators in our country have 12 power storage facilities with a capacity of at least 50 kW in their registers. The regulator has issued five decisions recognising electric energy storage facilities as fully integrated into the grid.
Power storage technologies play a crucial role in the energy transition. Among other things, they enable consumption management as well as more efficient use of electricity generated in renewable sources. They are also play a role in stabilising the operation of the power grid and improving its flexibility, as well as an alternative to more expensive and time-consuming investments in the expansion of conventional power lines and substations.
In connection with the development of the electric energy storage market, and due to the need to assess the effectiveness of the regulations introduced in 2021 in respect of the construction and management of this type of facilities[1], the President of URE initiated work on a report presenting the current state of the power storage sector in Poland. The study presents the state of the storage market as at May 2024.
Since 3 July 2021, the storage of electricity in storage facilities with a total installed capacity exceeding 10 MW has been considered a regulated activity subject to a licence from the President of URE[2].
Storage facilities integrated into network of electricity system operators help reduce the duration of power outages, may improve the quality parameters of the delivered power, and encourage the cooperation of distribution networks with local renewable energy sources.
According to the amendment of the Act on special solutions for certain heat sources in connection with the situation on the fuel market and certain other Acts[3], an electricity system operator is not allowed to own, build, operate or manage energy storage facilities. However, the legislation indicates the prerequisites that must be met in order for an electricity system operator, after obtaining a decision from the President of URE which recognises the power storage facility as a fully integrated component of the grid, to own, build, manage or operate the storage facility in question.
After the coming into force of the legislation which provides for the incorporation of the above-mentioned regulations into the Energy Law, i.e. between 28 February 2023 and May 2024, URE received applications from six distribution system operators for decisions to recognise a total of 41 power storage facilities as fully integrated network elements, and to give approval for the electricity system operator to own, build, manage or operate such facilities[4].
Until 6 May 2024, the President of URE issued five decisions recognising DSOs’ electricity storage facilities as fully integrated network elements, and one refusal decision. Other applications are pending.
Storage facilities in the registers of network operators
According to the 2021 Act, electricity system operators are required to maintain electronic registers of electricity storage facilities connected to their network, forming part of their network or forming part of a generating unit or end-use customer installation connected to their network. Electricity storage facilities with a total installed capacity over 50 kW[5], but not exceeding 10 MW, are subject to disclosure in such a register.
Monitoring by the President of URE shows that electricity storage facilities have been identified in the registers of the five largest DSOs and the TSO. Overall, they include 12 electricity storage facilities with a total installed capacity of 1,464.5 MW.
The largest ones, in terms of installed capacity, are pumped storage plants, whose total installed capacity accounted for 85 per cent of the total capacity of the registered storage facilities. Half of the storage facilities rely on the lithium-ion battery technology.
Energy storage on the capacity market
Recently, storage facilities have played an increasingly important role on the capacity market. Their share in the main auction for 2028 was 15 per cent of the contracted capacity, compared to less than 7 per cent in previous years.
As a result of the main auctions on the capacity for 2021-2028 and the supplementary auctions for 2012-2025, contracts have been concluded for energy storage with a total capacity of 9.5 GW, of which 7.1 GW is for existing units, 0.5 GW for retrofitted units and 1.9 GW for new units to be developed as a result of contracts concluded with the market operator.
All existing and retrofitted electricity storage facilities participating in the 2021-2026 main auctions and supplementary auctions are pumped storage plants (including those with natural inflow), which operated under a generation licence from the President of URE before 2021[6]. The new units to emerge as a result of the main auctions for the years 2027-2028 are in turn power storage units based on electrochemical battery technology.
Prospects for the electric energy storage market
The dynamic growth of storage is linked to the operation of the capacity market. The support instrument in the form of standby fees payable to auction winners on the capacity market currently appears to be a key incentive for the development of storage facilities.
Given that the new balancing market rules have been in place for a very short time (the new Terms and Conditions for Balancing came into force on 14 June 2024), and only a limited number of storage facilities are in operation, their significance for the functioning of the balancing market in Poland cannot be accurately assessed. However, the storage facilities are expected to be crucial to ensuring the efficiency of flexibility services.
[1] Act of 20 May 2021 amending the Energy Law Act and certain other acts (Journal of Laws of 2021, item 1093).
[2] In accordance with Article 32(1)(2)(a) of the Energy Law Act (consolidated text: Journal of Laws 2024.0.266).
[3] Introduced by Article 3(2) of the Act of 8 February 2023 amending the Act on special solutions for certain heat sources in connection with the situation on the fuel market and certain other acts (Journal of Laws of 2023, item 295).
[4] Pursuant to Article 9d1(2) of the Energy Law Act.
[5] In accordance with Article 43g(3) of the Energy Law Act.
[6] In 2023, URE discontinued the concession process in respect of existing pumped storage plants in their electricity storage function. These large-scale storage facility have functioned as generating units for years. With the amendment of the regulations in 2021, as regards the pumped storage cycle, they fall into the definition of an electric energy storage facility, and, to continue their operation were required to obtain an electric energy storage concession from the President of URE. There are six such power plants in Poland, four of which obtained the concession in 2022 and one in 2023.