The International Monetary Fund (IMF) has produced a report 'Greening the Recovery' urging government fiscal policy makers to “green” their response to the current economic crisis caused by the corona virus pandemic. In practical terms this means both direct public sector expenditure on and also incentivising the private sector to invest in renewable energy infrastructure. The report adds that “decisions taken now to address the Covid-19 crisis may shape the climate and human health, for decades. Action is needed to “prevent one crisis leading into another one.” The report argues that public investment projects should focus on boosting climate smart infrastructure such as renewable energy, modernizing the electric grid and improving digital infrastructure to build on the teleworking experience that has been a necessity as a result of the crisis. The IMF also urged governments to assist in “developing and adopting climate-smart technologies (e.g., battery/hydrogen/carbon capture.” Government controlled banks and central banks need to facilitate this process by providing debt guarantees and extending other forms of support to green industries/activities in preference to brown industries/activities.

The IMF mentions the need for more batteries, but does not draw the crucial link that investment in storage is not just complementary to the growth of renewables, but is essential as a direct result of the growth of renewables. The extremely low marginal cost and volatility of renewable generation means that without storage the integrity of sunk investments in the grid itself becomes increasingly challenged the greater the share of renewables in total electricity generation. Electricity grids needs to balance supply and demand to prevent power outages and the considerable economic costs they impose and only large scale grid level storage can ensure this balancing is done safely and efficiently.

On storage projects, in Britain the government needs to take the IMF’s advice and seriously up its game by relaxing planning restrictions on storage projects and to provide financial incentives to install them. Subsidies have driven the deployment of wind generation in the UK pushing capacity up to 9.8GW by Q3 2019 and now wind generation makes up around 50% of all renewable generation. There are no similar incentives for storage, but tt has been estimated recently that the United Kingdom needs to increase its current capacity of 1GW of battery storage to 10GW by 2024 and potentially up to 30GW by 2030 according to a report in the trade publication theenergyst.com. The main reason for the urgent increase in capacity is that the growing reliance on renewable energy grows will mean that “the amount of temporary excess generation will get worse.”  According to an investment fund director “Now that renewables have reached a tipping point, every additional unit of power generation will cause an increasing oversupply at certain times, while also reducing the market available for baseload, forcing this type of generation out of existence and creating a deeper trough in generation when renewables do not generate”.