The UK is leading on research in grid scale electrical energy storage, but its energy regulatory policies are in need of a serious rethink if it is going to realise its potential as a global leader, says Professor Phil Taylor
Energy storage is projected to provide the UK with £10 billion in benefits by 2020 and over £120 billion by 2050. The UK is leading in terms of demonstrating how energy storage systems interact with the grid, which is vital to its successful deployment and to reaping its economic and environmental benefits. But there are clear regulatory obstacles that must be overcome before grid-scale energy storage becomes ubiquitous.
In 2013 the Rt Hon David Willetts named energy storage as one of “eight great technologies” that will lead the UK to future economic growth. According to Willets: “It has the potential for delivering massive benefits – in terms of savings on UK energy spend, environmental benefits, economic growth and in enabling UK business to exploit these technologies internationally”.
A range of excellent research and demonstration projects exist, funded by government and industry, to implement energy storage at a range of scales, such as the Customer-Led Network Revolution that trialled several storage systems in the North East; Smarter Network Storage, a project led by UK Power Networks which installed a 6MW/10MWh device at a substation at Leighton Buzzard; and a unique energy storage test bed facility currently in operation at Newcastle University.
All of these projects involve key stakeholders in the UK energy industry. Some are ongoing and the results have been promising. One obvious benefit of electrical energy storage that has been pursued is using it to help balance and integrate renewable energy generation.
Government has committed to meeting 15% of the country’s energy demand from renewables by 2020. Much of this demand could be met if not exceeded by storing renewable energy.
In the UK energy generation follows unrestrained demand patterns, which presents a problem for the variability of renewable energy. However, with electrical energy storage the issue of intermittency is no longer a concern and the price of low-carbon energy can be significantly reduced. The electricity generated by wind, solar, biomass and other renewables could be stored, then sold back to the energy market during peak demand. Thus, energy storage can enable renewables to be valued appropriately, which is essential to the UK’s low carbon transition.
This is one example of a wide range of benefits that energy storage can provide for the future of the UK’s energy economy. But how do we realise this value?
The UK energy market is overly complicated. It separates generation from storage, distribution and supply, which limits the value of energy storage. A potential solution would be to make energy storage a specific asset class, including rules for appropriate regulatory treatment.
This could offer significant benefits to the UK’s energy network, such as balancing supply with demand, reducing greenhouse gas emissions and hedging against fluctuating energy prices. It should also be used in combination with other ‘smart’ ways to distribute energy such as demand side response and real-time thermal rating.
If energy storage is classed appropriately, implementation could be speeded up by providing feed-in tariffs or stimulus packages to reduce payback periods. This is the same way solar panels or other forms of renewable energy generation are paid back more quickly.
The cost of energy storage technologies is going down and their lifetimes are increasing. The value of energy storage grows proportionately with the amount of renewable energy in the grid. As costs for storage continue to drop and renewable energy generation increases, a future where energy storage becomes commonplace is inevitable.
The urgency of the low carbon transition and the costs to all stakeholders in its delay means we need a strategy for energy storage infrastructure now. Any pre-emptive investment in energy storage is an investment in the UK’s low carbon energy future.
It is likely that the countries that decarbonise the most rapidly will look more attractive for inward investment and places for businesses to set up. If the UK invests in energy storage now it will promote job creation, social development and the economy for years to come. While the examples given here have been mainly electrical energy storage, decarbonising our energy sector must also include thermal storage, to meet the 73% of the UK industrial energy demand that is used for heating.
As carbon becomes more expensive investment in energy storage infrastructure will make the UK more competitive internationally. We become more attractive to industry because we not only have an excellent low-carbon track record, but a secure and sustainable energy supply.
If the UK is to realise its rightful place as a global leader in energy storage it needs to look at the policies in place in other countries that are leading in deployment, such as the USA and Japan. If policy solutions for energy storage are taken up by government and regulators, the UK could do for energy storage what Germany has done for renewable energy generation.
Professor Phil Taylor is director, Institute for Sustainability, and Professor of Electrical Power Systems at Newcastle University