Building a supportive market for energy storage

The Secretary of State for Energy and Climate Change, Amber Rudd reiterated recently her concerns around the economic risks for Britain due to climate change. It is a risk to the UK’s growth and our well being and a wide range of our activities will have a bearing on whether we as global citizens are able to keep climate change within 2°C.

A critical part of the transition to a low carbon economy will be to develop and update our energy sector. Renewable electricity capacity in the UK almost trebled between 2010 and 2014, with the Committee on Climate Change stating that, between 2013 and 2014, Britain had the largest reduction in emissions from the power sector since reporting began. To ensure the penetration of more renewable generation on the electricity network, it is agreed amongst industry leaders, regulation and policy makers that we will require more energy storage.

In 2014, wind farm operators were paid more than £60 million to turn off their turbines when their electricity was surplus to requirement – up 32 per cent on the previous year. And in August 2014 minimum demand fell to 19GW leading to 6 ½ hours of negative prices for generation, as a result of solar generation. While wind can be curtailed, making it a very flexible form of generation, solar is “must run” generation leading to challenges in keeping the grid stable in the summer, when combined with other “must run” generation such as nuclear and some large thermal power stations. At the moment we need to turn off some low carbon generation to allow high carbon generation to continue to run, impacting on our ability to meet our carbon targets.

Energy storage helps to balance demand and supply by absorbing excess/off-peak energy for peak time distribution or to support periods when there are dips in generation. But storage offers multiple solutions by also providing key system services to help maintain frequency and stability. The Electricity Storage Network (ESN) has been engaging with industry, regulators and government for the past seven years to ensure that energy storage takes its place in the UK electricity system.

In early 2014, the Department of Energy and Climate Change (Decc) funded a series of energy storage demonstration projects, that included Highview Power’s 5MW/15MW Liquid Air Energy Storage system, hosted by Viridor, the waste management company. These projects are now being showcased across Britain to demonstrate the range of services that storage can support. Until recently, the big concern for industry has not been the technology but around creating a supporting market that recognizes storage and that will allow this much needed solution to be deployed on a much larger scale.

In October of this year, George Osbourne announced the creation of the National Infrastructure Commission, which will not only look at our aging energy infrastructure, but have a focus on deploying network connected electricity storage. This Government support is one measure that will start to see storage become a reality on our system. This along with National Grid’s recent call for enhanced frequency response, where energy storage responds automatically and incredibly rapidly to keep the grid secure, means that a market is beginning to develop for the specialist services storage can offer.

Since taking office earlier this year, Amber Rudd has been engaging with the energy storage community and has declared that ‘we need storage to make renewables viable’. In the long-term, the ESN believes that the energy storage industry should be given licence agreements with storage defined in its own asset class, however until this framework has been agreed, Government needs to provide clarity on interim regulatory arrangements if we are to grow industry confidence and begin to roll out storage more extensively across the UK’s electricity networks. We look forward to working with Government on this interim arrangement that will allow Britain to use its resources more efficiently and effectively, without the need for new expensive large high carbon power plants.

The new Government is actively addressing the significant issues that have so far hampered the routine role of energy storage on our networks, but much work is still needed to give storage a true role in the UK’s energy network, so that we can maximise the use of our sustainable generation, while delivering a secure electricity supply for a reasonable cost. The ESN looks forward to working with Government to address the fundamental regulatory and investment barriers, so that British companies have the green light to deliver their innovations and projects on the ground to ensure the UK electricity system is fit for the low carbon future.

Dr Jill Cainey, Director of the Electricity Storage Network (ESN)