Energy storage and renewable energy as a remedy for rising energy prices

With the escalating electricity prices, strategies are being explored to mitigate the rise or at least moderate its pace. Proposed solutions encompass avenues such as investing in green energy. As part of the remedy for the current issue, energy storage is also emerging as a significant consideration. Will this new scenario render energy storage more financially rewarding?

The evolving energy landscape, coupled with the need to address electricity cost challenges, is indeed poised to enhance the viability and profitability of energy storage solutions. As the integration of renewable sources and energy storage gains momentum, they collectively contribute to stabilizing energy supply and demand dynamics. This alignment not only aligns with environmental goals but also serves as a mechanism to mitigate the impact of fluctuating electricity prices. Consequently, energy storage stands to benefit from these changing circumstances by potentially offering more lucrative opportunities in the market.

Increase in energy prices in Poland

Contracts concluded on the Polish Power Exchange (TGE) show that in the last year the price of energy – both with delivery for 2022 and for the following years – is growing rapidly. […] In November 2020, the price of energy in forward contracts oscillated at PLN 242/MWh, and in November this year [2021]. reach the level of PLN 470/MWh. These prices are currently still rising.

URE

Energy prices are rising not only in Poland

In another article, we wrote how much electricity costs in Poland in 2023 and how to estimate the amount of your bills. We know that energy prices are rising very fast and we expect these increases to continue.

In a previous article, we covered the electricity costs in Poland for 2023 and shared insights on estimating your bills. The rapid escalation of energy prices is a widespread phenomenon, not confined to Poland alone. This trend is observable in numerous European nations. The underlying factors triggering this scenario are largely uniform across these regions. In this piece, we will delve into these causative factors before embarking on a quest to identify viable and efficacious solutions to address this pressing issue.

Why is the price of electricity rising?

Unstable situation on commodity markets

The current state of the commodity markets is characterized by notable volatility, particularly in relation to essential resources like gas and coal. This volatility is a significant factor contributing to the elevated levels of wholesale energy prices.

Reasons for increasing tariffs in the distribution sector

The Energy Regulatory Office (URE) identifies a range of factors that impact the escalation of tariffs in the electricity distribution sector. These factors include:

• Rapid Inflation: The phenomenon of galloping inflation, characterized by swift and substantial increases in general price levels, impacts tariff increments.
• Elevated Energy Procurement Costs: The necessity to cover expenses incurred from purchasing energy, particularly aimed at compensating for network losses, results in higher costs.
• Tariff Adjustment by Polskie Sieci Elektroenergetyczne: An upward adjustment in tariffs by Polskie Sieci Elektroenergetyczne, the transmission system operator, directly contributes to the escalation of tariffs.
• Investments in Grid Development/Modernization: Commitments to enhance and modernize power grids through capital investments introduce additional costs, thereby impacting tariff levels.

Energy demand greater than supply

Impact of digitization on the energy market

Every year we use more and more electrical devices. The progressing digitization of society and other factors have led to the fact that Poland’s domestic electricity consumption exceeds its production for about 7 years.

We have crossed an important threshold

According to the information provided by Polskie Sieci Energetyczne (PSE), in 2016 there was no balance between demand and supply for energy in our country. Now energy suppliers are urgently looking for new ways to ensure sufficient energy levels.

How to deal with rising energy prices?

Energy saving

One way is simply to save energy, which is not only profitable for our wallet, but also for the environment. It is worth introducing such habits into your everyday life.

Changing the tariff and hours of use of electrical devices

Understood! If you’ve already covered the topic in the article “How to save energy to reduce electricity bills,” there’s no need to reiterate the information. Readers can refer to that article for further insights.

Solutions introduced by the legislator

The legislative authority has mandated the implementation of measures aimed at safeguarding eligible consumers, including households, from the burden of excessively high energy expenses in 2023. Nonetheless, this directive doesn’t exempt the Energy Regulatory Office (URE) from conducting tariff-related procedures. Additional details concerning energy consumption thresholds, rates for 2023, and the maximum pricing are covered extensively in the article titled “How Much Does Electricity Cost in Poland in 2023”?

RES and energy storage

Will the integration of photovoltaics and energy storage contribute to bill reduction? This question has been under scrutiny for quite a while. It’s evident that the allure of energy storage solutions is steadily rising, and their profitability is on the upswing. This trend is bolstered by the prevailing conditions in the energy market, further enhancing the appeal of energy storage facilities.

Renewable energy sources (RES) and energy storage form a synergistic alliance that brings forth numerous advantages. This combination has gained substantial traction recently, particularly for its potential to provide insulation against escalating energy costs. With the backdrop of rising electricity prices, there’s an imminent surge in the development of energy storage facilities integrated with RES installations. This trend offers a partial remedy to the challenge at hand.

One of the pivotal functions of energy storage lies in the optimization of energy consumption. These systems accumulate surplus electricity generated from RES, subsequently releasing it for utilization during periods of heightened demand. This mechanism aids in extending the lifespan of devices powered by renewable energy. Moreover, energy storage installations bolster energy supply reliability and enhance the sense of security during peak periods when grid-based energy prices peak.

Sources:

Map of average energy prices in December 2022 – Energy Solution analysis, goodonepr.prowly.com,

Electricity price, rachuneo.pl

Electricity consumption limit 2000 kWh. What is an energy price freeze? , rachuneo.pl

How much will we pay for electricity from January 2023? , ure.gov.pl

It’s time to prepare for an increase in electricity prices in 2023, rachuneo.pl