Utility Week

UTILITY WEEK | 13TH - 19TH JULY 2018 | 25 Operations & Assets Cost This is arguably the largest and therefore most widely discussed of all the barriers to energy storage transforming the grid, the economy, our homes and the world. In fact there are those who believe storage will not be economical any time soon, and it's diffi- cult to dismiss that pessimism oand. The transformative future of energy stor- age has been "just around the corner" for a while now, but storage continues to represent a very small drop in a very large ocean. With this in mind, identifying the most economi- cal projects and most suitable customers for storage has rightly become a priority for companies including power providers, grid operators, battery manufacturers, energy- storage integrators, and businesses that have established relationships with prospec- tive customers such as solar developers and energy-service companies. As an example, EDF is currently building the country's first large-scale battery storage project at West Burton in Nottinghamshire, and earlier this year announced plans to invest €8 billion by 2035 to become a Euro- pean market leader in electricity storage. The company says it has a "buy now, use later" philosophy when it comes to energy stor- age. Head of business development, Chris Regan, says "cost is obviously a huge factor, but it is by no means prohibitive. Prices have come down and forecasts for growth are trending upwards. Current forecasts show that the value of battery storage will grow as the price of battery production falls. The Policy Exchange think tank estimates a flex- ible energy system could save the UK in the region of £8 billion by 2030." Elsewhere, analysis from Solar Media's Market Research division suggests a 40 per cent reduction in lithium-ion costs is expected by 2025, and more than 9,000MWh of battery energy storage could be deployed in Britain over the next five years as a result. And although energy storage only fea- tured modestly in the latest capacity mar- ket auction, battery storage, in concert with renewable technologies, continues to draw "increased investment" in bespoke industrial applications as "traditional energy procure- ment strategies are re-cast to exploit the full cost reduction potential of hybrid solutions", according to PA Consulting Group energy storage expert James Morris. On the other side of the coin though, Keith Maclean, chair of the UK Energy Research Centre, said at last year's Energy Summit the deployment of batteries alongside solar panels will add to the overall cost of the energy system. He said storage will enable many households and businesses with solar panels to go off-grid, and in doing so detract from a naturally complementary relationship between wind and solar generation: "It may make sense to the individual, but if we're removing that solar which is making the system balancing costs lower because of the anti-correlation with wind, we're just going to push up the whole-system costs and other people are going to have to pay them." Policy The government's support for clean technol- ogy innovation, and its awareness that the next phase of integrated energy decarboni- sation is about to begin, is hugely welcome. But, as the industry is now making plain, without clarity about long-term policy the energy revolution could stall. For example, beyond the Clean Growth Strategy, Electricity Market Reform – currently under discussion at European level – threat- ens to stifle battery storage innovation. Under the Austrian presidency of the EU, the Coun- cil and the European Parliament are expected to agree a set of rules that foster innovative solutions for new services to participate in the system, including electricity storage. Under the proposals, the grid will take on a host of new functions, including storage. But a large battery unit in the ownership of the grid operator cannot be used to bridge redispatch needs without affecting the market. A battery has to be charged or dis- charged again with real power. So a battery

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