07 September 2016

Energy storage is poised to grow rapidly in the UK towards 10 GW in the 2030’s – but action is needed to align the technology with market and policy signals if this potential is to be realised. The findings are in a new report: “Energy storage – towards a commercial model” launched today at a conference in London by energy experts Regen SW.

Johnny Gowdy, Regen SW director commented:

“Energy storage technology is developing rapidly, costs are falling, and the flexibility it provides can reduce the need for expensive new energy generation projects. However, developers and investors face an unsolved ‘Rubik Cube’ of technologies, regulatory frameworks, revenues and costs”.

“In the short term battery storage projects will tend to focus on rapid response services to support the network. As costs fall, storage will play a key role in providing reserves of energy to balance supply and demand and could become ubiquitous in our homes, workplaces and in transport. A UK energy storage sector in excess of 10 GW power capacity in the 2030’s is achievable.”

“The government will shortly be consulting on taking forward the National Infrastructure Commission ‘Smart Power” report. This is a key opportunity to align policy and regulation to enable a more flexible power system with storage at its heart”.

The report was written in partnership with UK law firm TLT, Green Hedge Energy and Triodos Bank.

Neils Kroniger, managing director, Green Hedge Group, commented: “Like a Swiss Army Knife, energy storage can deliver a wide variety of critical services. Unlike a Swiss Army Knife, already today it is cheaper than most alternatives, which means that we look forward to strong deployment without the need for any new subsidies. By making the different revenue streams work together better, BEIS, Ofgem and National Grid could eliminate risks to investors in storage, which in turn could deliver even greater savings to consumers.”

Maria Connolly, head of energy & renewables and real estate, TLT, commented: “Energy storage presents a real opportunity for the renewables sector. There is a need to balance the grid and ensure electricity is available at the right time and cost, and the recent EFR tender has shown how much investment is being put into rapid response technology.

In the short term we could see Behind the Meter (BtM) storage making a significant impact on the electricity grid. Large power users are starting to look at taking advantage of BtM and the revenue streams and cost savings available to them. Longer term, co-locating storage with other renewable technologies including wind or solar developments could be part of the solution which make projects of this nature commercially viable in a subsidy free environment.”

Philip Bazin, environment team manager, Triodos Bank, commented: “it is clear from the advances made in other countries and now the UK that proven sustainable electricity storage solutions exist and that their cost is fast reducing. What we now need to make these solutions more financeable is a clear, long term policy and regulatory framework to support the demand for these solutions and create an exciting sizeable new market in the UK.”

The report comes as National Grid announced it has contracted with eight storage projects for total of 201 MW of capacity to provide services to help manage the network, while savings the operator an estimated £200 million.

Download the paper here.

Author: Johnny Gowdy

Contact: [email protected]