Decc still open to storage licence change

Energy minister Andrea Leadsom has confirmed that energy storage will not be made a separate licensed category in the immediate future, but has not ruled it out completely.

She said in an evidence session of the Energy and Climate Change Committee (ECCC) this week that it will be business as usual “unless and until we change it”, which the Department of Energy and Climate Change will not know until it has consulted with industry later this year.

Decc is due to publish a call for evidence on smart systems imminently which will look at the barriers to energy storage deployment.

In contrast, earlier this week Ofgem essentially ruled out creating a new licence, with Ofgem associate partner, energy systems, Andy Burgess telling the ECCC a separate licence is “not the immediate solution”.

He said Ofgem wants energy storage to become a competitive market, and “if you want competitive markets to develop, you need to keep regulated monopolies out of them.”

One of the key asks of the energy storage industry and the National Infrastructure Commission is for a separate licence category for energy storage to resolve several regulatory issues, and to incentivise distribution network operators to fully utilise storage.

However Leadsom stressed that DNOs can utilise energy storage as long as they comply with the rules of the European Union’s third package.

To comply with the third package networks have to keep their network operation business separate from any storage business they might want to pursue.

This is because under the third package energy storage is classified as both generation and supply.

Leadsom said DNOs “can take advantage of storage services for network purposes”.

“There are a number of business models that are already available that allow them to access those services and that are compliant with the third package,” she added.