Winning £2 billion benefit of storage ‘requires joint action on market frameworks’

Effective use of storage could reduce the costs of managing a highly variable electricity system by £2.4 billion per year by 2030, a new report has concluded. But to use storage most efficiently the interests of a wide variety of stakeholders must be balanced.

The report recommends that “a multi-stakeholder task force should be convened with participants across
government, industry and academia”. It would consider market frameworks for storage and how to remove barriers that are currently holding back development, including network charging regimes and aligning incentives.  The report said that storage could offer a number of services to the system but revenues were currently hard to align. Potential investors also could have concerns that future new storage projects could ‘cannibalise’ finite revenue streams.

The report also said there was a need to defining storage and produce standards for technologies involved which vary from hydro pumped storage to compressed air and batteries.

Some changes required to bring on storage would be cost free, such as changing definitions, the report said. It proposed that the second step would be to establish an inter-governmental working group with members from the relevant bodies. This body would coordinate the adaptation of market frameworks across the multiple and independently regulated markets relevant for storage.

The report did not consider how electricity storage interacted with heat.

The report was funded by Decc, the Scottish Government, E.On, Scottish Power and SSE, and produced by the Carbon Trust and Imperial College.

Read the full report here

Further reading:

REA on storage

Key project by WPD and RES

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