The head of power company VPI, which is supported by Vitol, the biggest energy trader in the world, said to Reuters that the company will invest up to 450 million euros ($496 million) in battery projects in Germany over the course of the next three to five years.
By 2030, renewable energy will supply 80% of Germany’s electricity, up from 40% currently. This rapid expansion of renewable power production will necessitate an increase in energy storage to help balance the system’s supply and demand.
The battery joint venture with German energy storage company Quantitas Energy will be VPI’s first investment in the nation; the company currently owns electricity assets in Britain and Ireland.
High quantities of solar power can cause excessive intra-day price volatility in the German power market since they produce more electricity during sunny mid-day peaks. Businesses that own batteries can then profit from charging during periods of low or even negative price and selling electricity during periods of strong demand.
Jorge Pikunic, the chief executive of VPI, stated in an interview that “a lot of the opportunity (for batteries) is on the wholesale market… and that is because a lot of the renewable base is solar which produces pricing differentials within the day.”
Over the next three to five years, the joint venture hopes to construct up to 500 MW of battery storage capacity. The majority of the projects it plans to build will be headquartered in northeast Germany, an area rich in wind power generating.
Although the magnitude of each plant will vary, most of them, according to Pikunic, would have a capacity of 60 MW.
Although he did not reveal the venture’s ownership structure, he did state that VPI would control the majority of the shares.
