LONDON, Sept 12 (Askume) – Power company VPI will invest up to 450 million euros ($496 million) in battery projects in Germany over the next three to five years with backing from the world’s biggest energy trader Vitol, the chief executive told Askume.
Germany plans to rapidly expand its renewable energy capacity to 80% of the country’s electricity by 2030, up from the current 40%, and will also need to increase energy storage to balance supply and demand in the system.
VPI already has power assets in the UK and Ireland and said the battery joint venture with German energy storage company Quantitas Energy would be its first investment in the country.
Due to the large amount of solar power, which produces more electricity during the peak of the midday sun, prices on the German electricity market are extremely volatile during the day. Battery companies can make a profit by selling electricity during periods of high temperatures and charging when prices are low or negative.
“Most of the opportunities (for batteries) in Germany are in the wholesale market… This is because most renewable energy is based on solar, which leads to price fluctuations during the day,” VPI CEO Georg Pikunnik said in an interview.
The investment aims to develop up to 500 megawatts of battery storage capacity over the next three to five years, with the joint venture expected to build 10 projects, most of which will be located in Germany’s wind-rich northeast region.
Pikunnik said the size of different projects will vary, but most will have a capacity of 60 megawatts.
He did not disclose the ownership split in the joint venture but said VPI would become the majority shareholder.
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