Super store

Andrew Jones says we need to ramp up electricity storage to make the UK's system more efficient and capable of accommodating renewables

The Energy Bill mentions the word “efficiency” just six times – the words “nuclear” and “renewables” are mentioned hundreds of times each. The long-awaited Bill demonstrates the UK’s obsession with energy generation as opposed to energy efficiency, despite the inherent cost and risk of energy production. Some £75 billion needs to be invested in new generation over the next ten years – a tall order even for a buoyant economy. Should we not be limiting energy profligacy at the same rate as the development of generation to create more balanced supply and demand?

Unlike generation, the only by-product of efficiency is wealth, in the form of less spending on power stations, cabling and infrastructure. In turn this would cut generation and delivery costs, leading to lower fuel bills and lower carbon emissions. The government has high ambitions for consumers to reduce their energy use through the smart meter rollout from 2014. But smart meters do not stop energy wastage, people do (see feature, page 24). Smart meter energy savings are somewhere between 0 and 10 per cent, depending on how well the government can engage the public in using them. Reducing energy use at the grid level, before it reaches the consumer, would be a more direct means of improving efficiency.

True, modernisation of the grid is no small task. Investment of around £35 billion is needed for power transmission and distribution infrastructure over the next ten years. This is a daunting figure in itself, although not half as daunting as the bill for new generation.

Our ageing grid infrastructure means that a colossal 61 per cent of electricity is haemorrhaged just in the transmission from generator to customer. As well as the fundamental need to modernise the grid to prevent wastage, there is also a need to maintain a safe and efficient balance between supply and demand when renewables are in play. Our existing grid is not equipped to temper variable energy from wind, solar and other domestic-scale renewables.

Energy storage systems can make the grid strong and agile enough to handle what is coming. By placing energy storage devices at key points throughout the grid, utilities could manage evolving consumption patterns and dynamic supply, while deferring or even eliminating traditional capital expenditures.

Storage effectively increases the output of renewables, so we need fewer plants overall and are less dependent on carbon-emitting sources. In fact, storage solves multiple problems including smoothing output, storing excess energy in distributed batteries, and re-dispatching that power during peak times, as well as enabling longer periods of operation at higher output.

These efficiencies rapidly add up. Boston Consulting Group recently valued the internal rate of return of energy storage at 7 per cent, rising to 30 per cent. Distributed energy storage also enables generation technologies to be installed at the end user, which in turn reduces the need to invest in power delivery infrastructure and reduces wastage lost from transporting electricity from centralised plants to the end user. Having the ability to store energy at source can also limit the need for installation of electricity distribution infrastructure, such as transformers, cables and overhead lines.

A recent report by Imperial College found that the value of storage will progressively increase towards 2050. Should storage deployment grow from 2GW in 2020 to 25GW in 2050, the equivalent system savings increase from £0.12 billion a year in 2020 to £10 billion a year in 2050.

At present there is little storage capability on the UK network, the principal capacity being around 2,800MW of pumped hydro-electricity storage, which can store approximately 27,000MWh (2.5 per cent of daily average electricity production). National Grid estimates suggest our requirement will rise to 8,000MW in 2025. So, with storage being of paramount importance to both efficiency and generation, why is competition not driving more storage sooner?

Investment has been held back because of a lack of knowledge-sharing between the four key stakeholders: generators, transmission system operators, distributors, and supply companies. With each only responsible for a narrow segment of the value chain, it is hard to put a convincing “value” on efficiency because the gains are split four ways. However, government and industry are now working together to prove the value of storage at each level of the value chain. We at S&C and others are working with the Department of Energy and Climate Change to investigate the realistic requirements for electricity storage across the power system and its corresponding value to the UK.

The Electricity Market Reform programme should take into account the unique nature of electricity storage and remunerate investors and operators accordingly. Fundamentally, to justify the investment in an effective transition to the low-carbon economy, we need to couple investment in clean energy generation with systemic change in the way that energy is delivered and stored.

Andrew Jones is managing director, EMEA, at S&C Electric Company

Gas storage: getting out of a hole

With rising concerns over the security of energy supplies, large salt cavities deep underground in Cheshire are being used to create additional storage facilities for natural gas. At Hole House Farm, Middlewich, Cheshire, EDF Energy is building a new underground gas storage facility that will have a total capacity of 36 million therms when it is fully operational in 2016. The storage facility consists of ten pre-existing cavities formed in the rock salt deposits 200 metres beneath the ground, which are being widened and shaped. The cavities will act as voids into which natural gas can be pumped for temporary storage, and then pumped back out for use at times of high demand.

National Grid has built a 3.75km steel pipeline to link the new facility to the national transmission system. Engineering and environmental consultancy Wardell Armstrong has been involved with the project since 2009. Among other things, it has worked on the detailed design of the pipeline and related above-ground installations; routing (avoiding centres of population and significant environmental features); water quality monitoring; and a suite of non-invasive geophysical surveys.

While it will not resolve the security of supply issue singehandedly, the Hole House Farm project is a valuable and strategically important asset in increasing the storage capacity of natural gas.

Gavin Campbell, technical director, Wardell Armstrong LLP

This article first appeared in Utility Week’s print edition of 12th October 2012.

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