updated 14 July 2014
Members Meeting: Incentives for Electricity Storage
Our next members meeting on Thursday 17 July, from 2.00 to 5.00 pm in Central London will address the topic of incentives for electricity storage.
The meeting will start with a review of the proposed capacity market as it applies to electricity storage and will then examine a number of alternative support mechanisms for storage.
The meeting is free to members of the ESN, but non members will need to pay an nominal charge to help defray the costs of room hire etc. Registration is through the Eventbrite booking process:
The Electricity Storage Network has produced its framework document for the development of electricity storage in the UK
This summary document assesses recent reports on storage, picks up the themes from recent meetings including its own open symposium held in January and calls for action to develop a national strategy for the deployment of electricity storage.
The framework document is available for download here
PRASEG, the all Parliamentary Renewable and Sustainable Energy Group held a reception in association with the Electricity Storage Network on Tuesday 13 May 2014, in the House of Commons
See the page on News Conferences and Events for more details
The Electricity Storage Network calls for a national strategy for electricity storage as it presses for a 2000 MW target for additional electrical energy storage.
With an increasing interest in all forms of energy storage, and electricity storage in particular, the Electricity Storage Network's campaign for a national strategy continues to gain attention. Electricity storage should be a key part of our electricity system, and a plan to increase the use of storage is essential if we are to benefit from this important technology.
The Electricity Storage Network has published its Infographic, which may be downloaded from this site.
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Electricity Storage and Electricity Market Reform
Update: 23 April 2014
The Energy Act has now been passed and the decision making process is now going through the detail of the secondary legislation. Electricity storage is able to participate in the Capacity Market, although the rules and details of its operation are not as favourable as we would like. ESN staff and members are in discussion with DECC officials about details of the implementation of the Capacity Market. We continue to press for a role for storage which demonstrates its real value.
Update: 31 July 2013
During the committee stage of the Energy Bill, there was a debate for about one hour on energy and electricity storage. You can view the debate here The amendment covering electricity storage starts at 1 h 43 min into the debate.
Lord Stephen introduced his amendment, he set out the background to why storage is important:
"Making major inroads into reducing our reliance on fossil fuels for transport and heating will require even more renewable energy and, almost certainly, even more renewable electricity. One of the most important answers and, I would argue, the most central one, is storage. I do not know what sort of storage it will be but it will probably be big.....
"We will place more and more reliance on renewable generation, but the output from both solar photovoltaic and wind generation is time variable. Photovoltaic is the best example of that. This means that we need a method to balance the output to make it useful for our electricity system. There are suggestions that the problem could be solved by more interconnectors and adding more flexible gas fire generation through the capacity payments system, switching demand or just averaging out the renewable generation over the whole country. However, recent reports to DECC point out that interconnectors cannot be relied on as a source for balancing services and demand response is not a complete solution.
Electricity storage is a perfectly valid and achievable method to provide system balancing. It can absorb and reject power and act as reserve capacity to cover short or long-term interruptions. Through trading, it smoothes prices and so reduces the overall system cost. By reducing the peak demands on the system, it lowers the investment costs of our distribution networks; by absorbing energy from our wind farms and PV installations at times of low demand, storage lowers the carbon intensity of our electricity industry. Electricity storage remains one technology that does not receive support or any form of secure income stream under the Energy Bill proposals."
He referred to our target of 2 GW of new electricity storage by 2020 and asked for Government support for that point.
Viscount Hanworth supported the need for storage, with illustrations of the value of pumped hydro and other technologies
Baroness Worthington provided a very complete summary of a range of storage technologies, applications and installations, and raised the very important issue of ownership and operation of electricity storage under the present licensing conditions.
She pointed out:
"What the sector is really looking for is a clear signal that it will be able to participate in the capacity mechanism and that there will be a way in which it can compete against the other potential sources of capacity that will be brought forward. The problem is that we are dealing with what is essentially quite a new set of technologies which is facing all the challenges that you would associate with that. Potentially, these technologies could be commercially viable, but they are not yet. How can they compete in a capacity market that essentially seeks to be technology neutral and provide one price for all? This is a contradiction in the proposals being made by the Government that really needs to be thought through."
In reply, the Minister, Baroness Verma said:
"The Government agree that technologies that can be used to help balance the supply and demand of electricity, such as energy storage systems and demand-side response and interconnection, are increasingly likely to be required. This was the conclusion in DECC’s report, Electricity System: Assessment of Future Challenges, which was published in August 2012.
Energy storage systems can be used to store surplus electrical energy for use at times of high demand. They help to match the supply and demand of electricity efficiently and cost-effectively. Technology companies in the UK and elsewhere are actively developing energy storage systems which could help to address the problems associated with intermittency of supply. However, different energy storage technologies are currently at different stages of development and further innovation and development is needed to reduce the costs and thus make storage technologies applicable to wider deployment.
The department therefore identified energy storage systems as a priority area for funding under its Innovation Programme. We then consulted with storage technology developers and users, as well as other public sector innovation funders, before developing a plan to help support the development of storage systems. This led, in October 2012, to the department launching two innovation competitions to support research, development and demonstration of energy storage systems. As a result of these competitions, funding has already been awarded to 16 energy storage projects, and in the autumn DECC expects to announce details of up to
our energy storage demonstration pilots, which it will be supporting during the current spending review period. The aim of these pilot projects is to demonstrate the scope for cost reduction of innovative energy storage technologies and to explore the opportunities for deployment of energy storage technologies to address a wide range of future UK electricity network balancing and other storage needs.
Although the amendment was not passed, the Minister concluded by saying:
the department is taking this matter very seriously and that there is considerable work in hand without a statutory requirement.
The extract from the Lords Hansard for the grand Committee Debate for 30 July may be read here
Update 19 July
We continue to press for increased recognition of the role of electricity storage within our power systems. Unfortunately there seems to be a barrier to opening policy makers' minds: Although electricity storage may be able to operate within the Capacity Market in Great Britain, this alone does not provide the incentive for deployment of electricity storage at the scale that we need. An extract from the Lords Hansard ( the account of parliamentary business ) for 18 July may be read here.
Lord Grantchester asked:
"As our system includes more variable renewable generation, it will become increasingly important to encourage electricity storage.
The Government are currently directing £50 million into grid scale research and demonstrations in electricity storage. However, without a route to market, that money would be wasted. Electricity storage has the potential to provide savings of more than £10 billion per year by 2050—that is £400 per household—but no savings at all if the capacity market takes no account of this contribution. It would be interesting to hear whether the Government support the Electricity Storage Network’s target for an additional 2 gigawatts of storage installed on the system by 2020.
I will make a comment later in support of the amendment of my noble friend Lord Hanworth but I conclude with a few questions. First, as the Government have said that they consider DSR and storage to be a part of the future capacity market, can the Minister say what level of DSR and electricity storage within the capacity market the Government would deem a success?"
and the Minister, Baroness Verma replied:
we recognise that certain technologies, such as demand-side response and storage, have different characteristics from generation. That is why we have announced the transitional arrangements. In addition, we have designed the enduring capacity market to ensure that demand reduction and storage can participate effectively by running capacity auctions both four years ahead and one year ahead of when capacity is expected to be required. ......."
"Updating our electricity networks"
Our electricity system is operated on a just in time basis, constantly balancing demand with generation. So excess or wrong-time renewable energy is discarded and high carbon emitting peaking plant is used at times of increased demand. We also balance the system by using large gas plants responding to the variability in wind production. Electricity storage provides a much cheaper and more efficient solution to the balancing requirement. But there is now a new level of urgency in the need to address our electricity infrastructure given the reduction in capacity margin which falls to about 2% by 2015/16, i.e. 2133 MW.
While building more peaking plants may appear to be the cheapest solution, it is a false economy. They have low load factors and high running costs. Imperial College has recently quantified that by 2020, 35% of conventional generation assets will have a load of less than 10%.
Furthermore, the reports from Imperial College show that the cumulative value to the UK of flexibility is £60bn by 2030. Some of this flexibility can be provided by electricity storage. But if we build new peaking plants now, which have a 20- 30 year lifetime, we restrict our choice as it will not be economically sensible to make a second capital investment in energy storage to capture the value of flexibility in five or even 10 years’ time. Along with the economic cost, this will also impact our ability to meet carbon targets. We should build storage now which can go on to provide benefit for 20 or more years.
Energy storage is not generation and is different to generation, since it can absorb and warehouse “wrong-time energy” for later use. This is the key to integrating renewables into the energy mix, without using back-up fossil fuel plant for times when wind or solar power production is low. Well-located electricity storage also optimises the use of generation, wires and cables, allowing them to be sized for average demand, not peak demand, deferring or saving the cost of reinforcement. Energy storage is the key to the smart grid
"Let's connect 2020 MW of Energy Storage to our power networks by 2020!"
Delegates at the annual conference organised by the Institution of Mechanical Engineers and the Electricity Storage Network agred with the ESN's target to see 2020 MW of storage by 2020. The end of 2020 is just 93 months away, said the Chairman, Ian Arbon. We need to see development now, and across the next seven years if we are to meet this target. The conference covered electricity storage and the national interest, international perspectives, financing and policy issues and updates on current electricity storage projects. The programme can be downloaded here.
£30 M to create R&D facilities
to develop and test grid-scale energy storage
David Willets, the Minister for Universities and Science, announced a package of £600 million support for science which is to include £30 million to create R&D facilities to develop and test grid scale energy storage. The announcement on 23 January and further details are available here
UK - Future World Leader in Energy Storage
On Friday 9 November, in a speech at the Royal Society, the Chancellor George Osborne said that the UK must take a global lead in developing a series of low carbon technologies, including energy storage:
"There is the challenge of storing more electricity for the grid," Osborne said. "Electricity demand peaks at around 60GW, whilst we have a grid capacity of around 80GW – but storage capacity of around just 3GW.
"Greater capability to store electricity is crucial for these power sources to be viable. It promises savings on UK energy spend of up to £10bn a year by 2050 as extra capacity for peak load is less necessary."
An article detailing the chancellor's speech can be accessed here.
Energy Storage competitions
DECC’s Energy Storage competitions
Technology innovators have been submitting their bids for DECC’s two energy storage innovation schemes: one for large-scale energy storage demonstration projects and the other for research and feasibility studies into storage systems and their components.
The Electricity Storage Network welcomes this competition, which will stimulate the development of British developments in electricity storage. Electricity Storage Network members have supported a number of discussions and briefings with DECC over the past year as this programme has been developed.
Build megawatt hours, not just megawatts
“Meeting Britain’s power requirements needs storage as well as generating capacity” says Anthony Price, Director of the Electricity Storage Network. "The expected shortfall in reliable generating capacity has been caused, in part, by a lack of commitment to a balanced portfolio of generation, storage and network investment. Building megawatts of new gas turbine plant is part of the solution, but adding more electricity storage into the power system will bring real long term benefits.
“Adding storage to a power system is a way of operating the whole system more efficiently. Storage will reduce the total operating costs, and so reduce the costs of energy to consumers. Instinctively, everyone knows that storage is good idea, making better use of wrong time energy is one of the priorities of the renewable energy industry.
"The opportunity is now." Referring to reports that large scale investment in gas fired electricity generation is planned, the ESN's Director continues: " if the Government does not support the use of storage as part of the solution to meet our power shortfall, we will lose this opportunity, and live to regret it. What is low cost now will take us down power’s one way street. It will be difficult and costly to reverse. Our plans for the Smart Grid show we need storage and we must seize this opportunity now.”
The Electricity Storage Network is the trade and industry group that promotes the increased use of electricity storage in grid connected applications. Its members include manufacturers and developers of electricity storage products, as well as users and researchers in storage technologies. Electricity storage technologies include battery systems, pumped hydro, liquid air, pumped heat, compressed air and flywheels,. Electricity storage projects are in operation throughout the world.
12 October 2012
DECC announces announcement of new energy storage competition (15 October 2012)
The Electricity Storage Network advises its members that DECC now expects to confirm details of its programmes to support energy storage demonstrations on Friday 20 October. At a special meeting of ESN members held on on 15 October, DECC officials outlined the principles of the forthcoming support for innovation. There will be a knowledge sharing event held with the energy and generation KTN on 6 November in London.
Craig Lucas, Head of Engineering at DECC announced premliminary details of DECC's competition for energy storage innovation at the IET's meeting on Smart Grids (19 September 2012). Innovators can now register their interest on the DECC website prior to publication of the formal details of the call.
The Electricity Storage Network is pleased to have supported officials at DECC in identifying the topics for the call, and a number of Electricity Storage Network members have discussed the need for support for this essential technology at ESN meetings with DECC over the past twelve months.
MP's call for electricity storage to be recognized in the new Energy Bill
The House of Commons select committee on Energy and Climate Change has published its review of the Draft Energy Bill (23 July 2012) and has called for demand-side response and storage technologies to be recognised and defined explicitly in the Energy Bill. The case is argued for support for storage and DECC
should investigate the legislative and other barriers to storage, and remove any that prevent it from competing fairly in the market.
The report may be downloaded here (see volume 1, para 192)
The Electricity Storage Network provided written evidence to the committee, and this has been commented upon in the report. Many other witnesses provided evidence supporting the role of storage.
Government failing to adequately support vital electricity storage technologies
The Institution of Mechanical Engineers has published a policy statement - 31 May 2012 - which calls for action by Her Majesty's Government in three key areas:
1. Support actions to identify the true system benefit of electricity storage. As a matter of priority the UK’s Department of Energy and Climate Change (DECC) should carry out a detailed analysis to estimate the realistic requirements for electricity storage across the whole UK power system and its corresponding value to the nation.
2. Develop policy frameworks that reward the value of electricity storage in the UK’s power markets. The UK Government’s Electricity Market Reform (EMR), which is examining and revising the commercial and regulatory structure of the nation’s electricity market, should take into account the unique nature of electricity storage and remunerate investors and operators accordingly.
3. Encourage and support UK development of storage technologies for exploitation in world markets. The UK Government should advance the commercial-scale demonstration of electricity storage technologies in the UK, and thereby create technical value that UK companies can export overseas.
These recommendations are very much in line with our own views and policy and we commend the policy statement. You can download the policy statement here, and the accompanying press release here
Electricity storage innovation
A meeting held on 12 April 2012, London
ESN members and representatives of DECC, OFGEM and BIS met recently in London to exchange views and ideas on the support for electricity storage innovation. Ideas covered both support for technoology development as well as addressing electricity market reforms. A note of the meeting will be sent to all members. ESN members included network owners and operators, manufacturers, developers, and others active in the electricity storage spectrum. The discussions with government departments will continue over the coming months.
This activity comes at a time when recent reports and discussions have highlighted the role of storage as one of the four pillars of flexibility in the UK’s future electricity system. The Electricity Storage Network is promoting the role of storage in the power industry and is active to ensure that electricity storage is included in revisions to regulations and legislation.
Presentation slides by Ian Ellerington of DECC are available for download here (available by permission of DECC)
Notes of the meeting will be sent to members directly