EU to scrap small-scale storage permits as battery prices drop again

The European Commission is proposing to streamline permitting for energy storage as part of a new €1.2tn ($1.4tn) top-down strategy to build its cross-border grid.

Slow permitting has been a major barrier for storage installations, which currently take up to seven years.

Previous efforts to speed up permitting have been hampered by a lack of standalone storage integration and limited access to environmental and geological data.

Under the proposal presented today, stand-alone and solar co-located storage under 100kW would be largely exempt from administrative and environmental permits, except for grid connection permits and hydrogen storage.

The permit procedure for standalone storage above 100kW must also be completed within six months. Member states will be required to create national digital portals for permitting, including access to relevant environmental data.

The bloc also aims to speed up energy storage in southeastern Europe to improve regional energy security, which was affected by 2024 price spikes and inter-country disparities, the proposal said.

For wind, the package should ease pressure as around 500 GW of wind energy projects are in line for grid connection permits, according WindEurope.

The package shifts from “first come, first serve” to “first ready, first service” to filter out “zombie projects” for permitting authorities, the industry body noted.

“The Grids Package proposes a targeted and well-balanced revision of existing permitting rules. Good,” said Giles Dickson, WindEurope CEO.

“But well-intended attempts to accelerate permitting must not end up undermining investment security. And they must not undermine public acceptance either.”

Storage is essential for managing wind and solar intermittency if the EU is to meet its legally binding carbon neutrality target by 2050.

But the EU, which began as a way to pool steel and coal, has struggled to strengthen its internal energy market.

Its 2015 plan to create an Energy Union to deliver clean and secure energy across the bloc remains unfinished.

Permitting alone accounted for more than half of the total timeline for implementing energy infrastructure in 2023, according to ACER.

More widely, the centralised plan for energy infrastructure planning will also propose projects to fill gaps in energy grids as part of efforts to push EU countries to improve co-ordination.

The package comes as battery prices are set to fall again in 2026, according to BloombergNEF.

Cheaper batteries are crucial to support the fast expansion of intermittent renewables like wind and solar and meeting growing data-centre demand.

Lithium-ion pack prices have already dropped to a record low of $108/kWh, with stationary storage packs seeing the sharpest decline, down to $70/kWh.

Next year’s decrease is expected to be smaller due to tariffs and high raw material costs. But cell manufacturing overcapacity, fierce competition and the shift toward lower-cost lithium iron phosphate (LFP) batteries are still pushing prices down.

“Cut-throat competition is making batteries cheaper every year,” Evelina Stoikou, the head of BNEF’s battery technology team said.

“This is an important moment for the industry, as record-low battery prices create an opportunity to lower EV costs and accelerate the deployment of grid-scale storage to support renewables integration around the world.”

Elsewhere, the EU has given the Bornholm Energy Island project fast-track status under its Energy Highway plan it presented today, together with its grids package.

The European Commission hopes that the ambitious cross-border offshore wind project between Denmark and Germany will turn the Baltic Sea into an offshore interconnector hub.