Networks call for powers to explore storage ownership

Electricity network operators have called for rule changes to allow them to own and operate electricity storage where reinforcement is the only viable alternative to flexibility.

The proposal is included within Energy Networks Association’s (ENA) latest Innovation Strategy Update, which also proposes the creation of a strategic planning body for high energy users by 2028.

Under current regulations, distribution and transmission network operators are prohibited from owning and operating electricity storage due to a potential conflict of interest and disruption to the flexibility or ancillary markets.

However, the report says networks should be able to develop and operate storage where it would be most beneficial to the energy system.

It explains that networks “will require a clear regulatory definition of storage” and that new ownership models need to be developed to improve resilience and flexibility provision especially, it adds, “in areas lacking private interest”.

It continues: “By 2034, regulators and energy networks should have reached a consensus on defining the role and place of storage technologies and considered the best ownership models. Defining the role of storage will include short-duration storage in batteries as well as long-duration storage, including salt caverns linked to the gas network.

“Network operators should be able to explore storage ownership in situations where flexibility has undergone market testing and proven unsuccessful, leaving reinforcement as the only viable alternative. Regulators have recognised these challenges and are including storage ownership for their innovation scope – work is ongoing to analyse the future relevance and governance of storage.”

Other recommendations include the creation of a strategic planning body for high energy users by 2028.

With demand “changing rapidly and increasing” new demand centres, including industrial clusters for hydrogen or the electrification of previously gas demand centres, will create new constraints to networks.

“There will be new and more high energy users, which would seriously affect energy networks if their demand wasn’t accounted and planned for in advance,” it argues.

As such it recommends that a strategic planning body is created to engage with high energy users in order to better understand their needs and relay this information to hydrogen and electricity networks which would be able to use this information to forecast demand.

It further explains: “High energy users, often commercial or industrial buildings, will require incentives and guidance on how to understand, manage and forecast their energy usage. This will include installing new technologies to track current energy usage, the development of software and models to forecast their energy need and optimisers to manage their energy consumption at all times.

“Standards will need to be in place to ensure energy users know how and when to communicate information, and through which channels.”

Dan Clarke, ENA’s head of innovation, said: “I’m proud ENA’s Innovation Programme has helped thousands of projects become a reality but it’s vital we evolve, responding to what our members and partners are telling us and the challenges on the horizon.

“The message we have heard this year is the need for those decision-makers supporting and coordinating innovation to empower networks to move faster. Equally there’s the desire for projects to scale up and achieve their goals.

“The Energy Innovation Atlas provides a guide to those planning strategic innovation within energy networks, if this innovation is to successfully support the UK in meeting our decarbonisation goals within current timeframes.”

Tom Veli, head of Energy Networks at LCP Delta (which helped devise parts of the strategy) said: “The project with ENA and the networks industry involved stakeholder engagement across the industry alongside strategic and forward thinking and literature review to develop a roadmap for the future.

“Within the roadmap we have identified 24 ‘way points’ where we see the need and opportunity for crucial innovation, both on the network operational and technology side, as well as with regulators in looking at the energy system differently. One clear takeaway is the need for networks to work across industry and systems to deliver innovation efficiently.”