Utility-scale BESS to drive Czechia’s storage market – ess-news.com

Report on the Expansion of Battery Energy Storage in Czechia and its Alignment with Sustainable Development Goals

Executive Summary

Analysis indicates a significant expansion of Czechia’s battery energy storage system (BESS) capacity, projected to increase from approximately 2.3 GWh to 6 GWh by 2030. This growth is propelled by recent regulatory reforms and strong market incentives. The development is a critical enabler for achieving several Sustainable Development Goals (SDGs), particularly SDG 7 (Affordable and Clean Energy), SDG 9 (Industry, Innovation, and Infrastructure), and SDG 13 (Climate Action), by facilitating the integration of renewable energy and modernizing the national energy infrastructure.

Market Growth and Projections

Current Status and Future Outlook

The Czech battery storage market is poised for a transformative expansion. Key data points include:

• Current Capacity (2024): Approximately 2.3 GWh, with 98% comprised of behind-the-meter installations.
• Projected Capacity (2030): Forecast to reach 6 GWh.

This growth signifies a strategic shift from a small, policy-driven market to a major energy flexibility hub within Central Europe, driven by the anticipated build-out of utility-scale BESS.

Contribution to SDG 7 (Affordable and Clean Energy)

The expansion of BESS is fundamental to advancing SDG 7. By storing energy from intermittent renewable sources, battery storage ensures a more reliable and consistent supply of clean power. This enhances grid stability, reduces reliance on fossil fuels, and supports the transition to a sustainable energy system, making clean energy more accessible and affordable for communities.

Regulatory and Financial Drivers

Legislative Reforms and Market Access

Recent regulatory changes have created a favorable environment for BESS investment. These include:

1. Energy Act Amendments (March): Permitted batteries to participate in wholesale markets and ancillary service markets (FCR, aFRR, mFRR), creating new revenue streams.
2. Simplified Connection Procedures (August): Accelerated and streamlined the process for connecting BESS projects to the grid.

Investor Confidence and Subsidies

Market response to the new framework has been overwhelmingly positive. Over 1 GW of grid capacity was reserved by developers by mid-2025 in anticipation of the reforms. Furthermore, an initial €80 million subsidy for storage was fully allocated within weeks of its launch, demonstrating high investor demand and confidence.

Alignment with SDG 9 (Industry, Innovation, and Infrastructure)

These developments directly support SDG 9 by fostering investment in resilient and innovative energy infrastructure. The build-out of a utility-scale BESS network represents a significant technological upgrade to the national grid, promoting industrial innovation in energy management and creating a more robust foundation for sustainable economic activity.

Economic Viability and Market Dynamics

Revenue Potential and Market Volatility

The current economic landscape presents a strong business case for BESS projects. High market volatility, with daily price spreads now four times higher than pre-crisis levels, allows battery operators to capitalize on price arbitrage. Projections indicate that a two-hour BESS commissioned in 2026 could achieve:

• A full payback within five years.
• An internal rate of return (IRR) exceeding 15%.

Supporting SDG 13 (Climate Action)

The economic viability of BESS is intrinsically linked to SDG 13. By making renewable energy sources more reliable and economically competitive, battery storage accelerates the displacement of carbon-intensive power generation. This large-scale deployment is a crucial tool for reducing national greenhouse gas emissions and contributing to global climate action targets.

Future Challenges and Strategic Outlook

Market Saturation and Evolving Revenue Streams

While the outlook is positive, challenges are anticipated. The primary revenue stream from ancillary services is expected to saturate quickly, potentially leading to a 36% reduction in annual revenues for a two-hour BESS by 2030 compared to 2026 levels. Consequently, projects coming online after 2026 will need to increasingly rely on wholesale market participation.

Long-Term Strategy and Sustaining SDG Progress

The long-term strategy for BESS in Czechia will require adaptation. Post-2030, the focus is expected to shift from ancillary services to energy trading in day-ahead and intraday markets. Furthermore, future viability may depend on developing new revenue streams not yet active in the market, such as:

• Grid forming
• Black start capabilities
• Artificial inertia

Continuous innovation and strategic adaptation will be essential to ensure that the BESS sector continues to drive progress towards Czechia’s energy transition and its commitments to SDGs 7, 9, and 13.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 7: Affordable and Clean Energy

  The article’s central theme is the expansion of battery energy storage systems (BESS) in Czechia. This technology is critical for stabilizing the grid and integrating intermittent renewable energy sources like solar and wind, thereby directly supporting the transition to a cleaner energy system.

• SDG 9: Industry, Innovation and Infrastructure

  The text describes a major build-out of utility-scale BESS, which represents a significant upgrade to the country’s energy infrastructure. It also highlights regulatory innovations, such as amendments to the Energy Act, that are transforming the market and fostering a new industry around energy storage, positioning Czechia as a “large flexibility hub for Central Europe.”

• SDG 13: Climate Action

  By enabling a higher penetration of renewable energy, which the article notes has “surged,” battery storage plays a crucial role in reducing reliance on fossil fuels. The policies and investments discussed are concrete actions that contribute to climate change mitigation by facilitating the decarbonization of the energy sector.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Under SDG 7 (Affordable and Clean Energy):
   • Target 7.2: “By 2030, increase substantially the share of renewable energy in the global energy mix.” The article implies progress towards this target by stating that “renewable generation has surged,” and the development of BESS is essential to manage this increase and allow for even greater shares of renewables on the grid.
   • Target 7.a: “By 2030, enhance international cooperation to facilitate access to clean energy research and technology… and promote investment in energy infrastructure and clean energy technology.” The article directly addresses this by detailing how Czechia is promoting investment in BESS through an “€80 million ($93 million) budget” for subsidies and regulatory reforms that have resulted in “high investor confidence.”
2. Under SDG 9 (Industry, Innovation and Infrastructure):
   • Target 9.1: “Develop quality, reliable, sustainable and resilient infrastructure… to support economic development and human well-being.” The expansion of BESS enhances the reliability and resilience of the national energy grid by providing balancing services and managing volatility, which is a key upgrade to critical infrastructure.
   • Target 9.4: “By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with… greater adoption of clean and environmentally sound technologies.” The article’s focus on the BESS build-out is a direct example of upgrading energy infrastructure with a clean technology to support a sustainable energy system.
3. Under SDG 13 (Climate Action):
   • Target 13.2: “Integrate climate change measures into national policies, strategies and planning.” The article provides clear examples of this, citing the “amendments to Czechia’s Energy Act” and the creation of a “standalone subsidy for storage” as national policies designed to accelerate the energy transition, which is a core climate action strategy.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

Yes, the article contains several specific quantitative and qualitative indicators that can be used to measure progress:

• Indicator for Investment in Clean Energy (Target 7.a): The article quantifies the financial commitment through the “€80 million ($93 million) budget” for the first standalone storage subsidy. The high demand, evidenced by “700 applications” that used up the entire budget within weeks, also serves as an indicator of investor interest.
• Indicator for Infrastructure Development (Targets 9.1 & 9.4): Progress is measured by the growth in installed capacity. The article provides a baseline of “around 2.3 GWh today” and a future projection of “6 GWh by the end of the decade.” Additionally, the reservation of “over 1 GW of capacity” for grid connection by mid-2025 is a concrete short-term indicator of this infrastructure build-out.
• Indicator for Policy Implementation (Target 13.2): The implementation of specific national policies is an indicator of progress. The article explicitly mentions the “amendments to Czechia’s Energy Act” and the launch of the “first standalone subsidy for storage this year” as policy measures that have been enacted.
• Indicator for Market Volatility and BESS Viability (Targets 7.2 & 9.1): The article notes that “Daily price spreads are now four times what they were before the crisis,” which serves as an indicator of the market conditions that make BESS both necessary for grid stability and economically attractive for investors.

4. Table of SDGs, Targets, and Indicators

Source: ess-news.com