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4.3 Key barriers and recommendations for each sector This section discusses barriers to TES adoption in the use sectors overviewed in Chapter 3. It proposes potential policy interventions relevant to each sector. These should be viewed as complementary measures to the generalised “menu of policy options” presented in the previous section. Power Globally there is limited recognition of energy storage or indeed heating/cooling systems in energy market regulations. Regulation in the power sector is typically based on models that were envisaged for centralised production of baseload power with passive consumers. Growth in distributed variable generation and the rise of the “prosumer” has changed the way power market participants interact, and regulatory frameworks are not generally keeping pace. Storage technologies are impeded by several challenging quirks of regulation, including a lack of classification and instances of potential double-charging for power at the point of storage and use. Policy makers should address these regulatory barriers to energy storage to provide clarity to the wider market as to the prospects for storage penetration in power systems. In Europe policy makers have already addressed the regulatory barriers to energy storage by providing clarity on the wider market and the prospects for storage penetration in power systems (Table 13). Looking specifically at TES, it is essential that policy makers evaluate and amend regulatory frameworks using whole-system perspectives, so that power and heat markets are not siloed. Current market structures also restrict TES commercialisation. Price signals for the provision of flexibility are needed to improve the value proposition of TES technologies. However, governments should be mindful of the need to avoid the high levels of volatility in electricity prices associated with VRE. Taking curtailment as an example, if it is invisible to the wider market, there is little to no incentive to address it or better integrate the VRE generators. If price volatility in markets with high levels of intermittent renewable penetration is made visible, this strengthens the economic case for deployment of storage. European Union Renewable Energy Directive A multinational example of integrated policy is the European Union’s 2009 Renewable Energy Directive. All EU member states were required to create a National Renewable Energy Action Plan (NREAP), which outlined their respective targets for renewable energy to be achieved by 2020. As a related policy, all member states then adopted decarbonisation targets for transport, for electricity and for heat. Table 12 shows the NREAP targets of three member states. Since the adoption of NREAPs, most member states have adopted relevant policy measures towards achieving their stated renewable energy deployment aims. Table 12. A snapshot of the NREAPs of three EU member states, showing targets for renewable penetration in each sector for 2020 Source: IEA and IRENA, 2018. Sector\Country Germany Sweden France Electricity 37% 63% 27% Heating and cooling 15% 62% 33% Transport 13% 14% 10.5% 112 INNOVATION OUTLOOKPDF Image | THERMAL ENERGY STORAGE Outlook
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