"In order to stabilize the electricity grid, we will use the storage on days with high fluctuations in renewable energies," said Hubertus Altmann, a board member responsible for the company's power plant division.

The German state of Brandenburg is funding €4 million of the project cost and LEAG plans to start construction next summer and commercial operation in mid-2020.

The battery's size will put it at the top end of grid-scale storage systems in Europe. Electricité de France SA commissioned a 49-MW, 24.5-MWh lithium-ion battery at its West Burton gas-fired plant in the U.K. in June after winning a tender to provide frequency balancing by U.K. system operator National Grid PLC. In Germany, Dutch utility Eneco B.V. and Japan's Mitsubishi Corp. commissioned a 48-MW, 50-MWh battery next to a substation in the state of Schleswig-Holstein.

Total European battery capacity is currently under 1 GW but expected to more than double by 2022, primarily located in the U.K. and Germany, according to S&P Global Platts Analytics.

LEAG's system also fits into a broader trend of storage projects being built next to existing power plants. "It's something we're seeing a lot more of, particularly in Germany," said James Frith, an energy storage analyst at Bloomberg New Energy Finance, a research company. German hard coal power generator STEAG GmbH, for example, has installed six 15-MW batteries at individual power plants, with a total capacity of more than 120 MWh.

Co-locating storage with generation has several advantages, Frith said. In addition to using an already existing grid connection, the battery enables the plant to run at full capacity if used as a reserve and reduces operational costs, because it can assist in ramping production up or down.

LEAG is jointly owned by Czech energy company Energeticky a Prumyslovy Holding a.s. and private equity group PPF Investicni Holding A.S. The company was created in 2016 through the sale of German coal assets by Swedish utility Vattenfall AB. It owns and operates four coal-fired power plants with just over 8,000 MW of capacity and also runs Germany's second-largest lignite mining operation in the Lausitz region.

The battery, consisting of 13 containers, will be built by Czech power construction company EGEM.

S&P Global Market Intelligence and S&P Global Platts are owned by S&P Global Inc.