Thermal storage can reduce energy costs and alleviate the electricity grid

Thermal energy storage: demonstrable cost savings and a solution for grid congestion

Thermal energy storage is a technology that allows excess heat, often generated from renewable sources such as solar or wind energy, to be stored for later use. According to research conducted by consultancy firm Kalavasta, thermal energy storage in a district heating network enables the storage of renewable energy during periods of overproduction when prices are low, and its deployment during peak demand. This can lead to lower energy bills for households and also increases the feasibility of new district heating networks.

In addition to financial benefits, thermal energy storage provides an answer to the growing grid capacity issues. District heating networks with storage can use electricity outside peak hours, resulting in less grid congestion. Thermal energy storage makes district heating networks ‘congestion-mitigating’, allowing them to connect to the grid sooner.

More sustainable and efficient

Detailed analyses show that thermal energy storage reduces CO₂ emissions per gigajoule of heat by 1.5 to 5 kilograms – depending on the district heating network. This is due to more efficient use of renewable energy and reduced dependence on natural gas. Thermal energy storage also reduces curtailment – the wastage of renewable energy such as solar and wind power – by as much as 150 to 200 percent.

Higher discounts and subsidies needed

Although the benefits are significant, investments in thermal energy storage remain challenging due to high initial costs. Targeted subsidies and higher reductions on grid tariffs can make this promising technology more accessible. Without these measures, the demonstrated benefits for grid operators, industry, and households cannot be realized.

"Thermal energy storage is crucial for an affordable and sustainable energy system, but requires decisive policy to be widely implemented," says Mia Djuretic, business development manager at Invest-NL.

About the research

The research was conducted by Kalavasta commissioned by Invest-NL and Energy Storage NL. It includes three case studies analyzing the financial and societal benefits of thermal energy storage. The results clearly show the added value of integrating thermal energy storage into the Dutch energy transition.

The calculation model for the costs and benefits of thermal energy storage in district heating networks is available on the website of Stichting Warmtenetwerk under the section 'Guidelines'.