- Solar and storage ‘most effective way of addressing energy sustainability, affordability and security’, recent report says
- Increasing amount of solar and storage in Europe’s energy mix could result in €223bn in gas import savings by end of decade
- Quinbrook, Cero Generation and Sonnedix among those betting big on solar-storage projects in Europe
The drive to develop more co-located solar and batter storage assets is gaining momentum. A recent report by SolarPower Europe concluded that scaling up solar power and battery storage in Europe offers the “most effective and immediate pathway to deliver on all three pillars of the energy trilemma: sustainability, affordability, and security”. The report also described solar power and battery storage as the “cheapest and most versatile forms of power generation”.
SolarPower Europe’s report said that solar plus battery storage would not only support the EU’s climate objectives, but also deliver tangible economic benefits including: halving power system operating costs, lowering wholesale electricity prices significantly; and reducing price volatility for consumers and industry alike. SolarPower Europe outlined what it termed a ‘Solar+’ scenario, where the most versatile and rapid-to-deploy technology solutions, primarily solar PV and battery storage, become more prominent in the EU power system. The report stated that, since the outbreak of the war in the Middle East, solar had saved Europe €8.5 billion on gas imports – however, it added that increasing the amount of solar in the European energy mix (under its ‘Solar+’ scenario) could contribute to €223 billion in total gas import savings during the period 2026-2030.
The report also said that, under the base case (‘business as usual’ scenario), Europe’s annual gas import savings will rise to €44.4 billion by 2030, but, under the ‘Solar+’ scenario – in which there is a greater ambition to increase solar and battery storage’s share in the Europe energy mix – the annual gas import savings could be as high as €53.3 billion by 2030 (see chart below).
Source: SolarPower Europe’s ‘Solar+ An EU pathway to achieve renewable targets, price affordability, and energy security’ report
UK solar plus storage gaining traction
Many see solar plus energy storage as the most efficient approach to advancing the energy transition and a number of developers and investors have recently taken steps to widen the deployment of such technology in Europe. In September last year, Cero Generation announced it had reached financial close on a £200m financing package for a portfolio of UK solar and BESS co-located assets. The three initial projects, developed by Enso Energy, have a total installed capacity of 360MW across both solar PV and BESS assets – the financing was raised via a consortium of lenders made up of ING, NORD/LB, Rabobank and Santander UK. The financing included an accordion facility to accommodate future projects. Commenting on the financing, Benedict Smith, head of specialised & project finance at Santander UK, said: “These projects are of particular note as they deliver both generation and flexibility. We see these co-location assets being critical to delivering clean power ambitions.”
Elsewhere, investment manager Quinbrook Infrastructure Partners last summer announced the beginning of commercial operations at the 373MW Cleve Hill Solar Park – which ultimately will also include 150MW of co-located battery storage – in Kent in the UK. The Cleve Hill development is so crucial to the UK’s energy future that it was the first solar and battery storage project to be consented as a Nationally Significant Infrastructure Project. It was also backed by the largest solar + battery storage project financing ever undertaken in the UK, with Quinbrook closing a £218.5 million term loan and a £20 million VAT facility with Lloyds and NatWest. At the time of the financing, NatWest reaffirmed its belief that solar and battery storage was a “highly strategic sector with leading potential to become a centrepiece of UK’s medium-term decarbonisation story.”
Progress in Portugal
Meanwhile, earlier this year, renewable energy company Sonnedix completed the financial close of its first hybrid solar-battery energy storage (BESS) projects in Portugal. Sonnedix said the financings – for the Sonnedix Acail (28 MW PV and 24 MW BESS) and Sonnedix Felgueiras (40 MW PV and 32 MW BESS) projects – represented one of the first structured financings with commercial banks in Portugal for hybrid solar and battery storage projects. “This operation reflects the growing maturity of the market in financing hybrid projects that combine renewable generation and storage,” Miguel A. García Mascuñán, chief financial officer at Sonnedix, said: “We have structured a solid solution adapted to the technical and regulatory complexity of these assets, reinforcing commercial banks’ confidence in the potential of hybrid BESS projects and expanding our financing capabilities in Europe.”
Co-located solar and battery storage projects have the potential to become a core feature of Europe’s energy transition. As renewable generation continues to expand, the ability to pair low-cost solar with flexible storage is becoming increasingly valuable for improving grid stability, reducing curtailment, lowering energy costs and strengthening energy security. At the same time, growing investor confidence and more sophisticated financing structures are accelerating deployment across multiple European markets. With lenders and developers increasingly aligned behind hybrid projects, co-located solar and battery storage is set to play an increasingly central role in delivering Europe’s clean energy ambitions.