Utility Week

UTILITY Week 2nd May 2014

Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government

Issue link: https://fhpublishing.uberflip.com/i/304143

Contents of this Issue


Page 13 of 31

14 | 2nd - 8Th MaY 2014 | UTILITY WEEK Policy & Regulation Market view T he energy value chain is being rebal- anced, from production through to consumption. The pressure of keeping prices low while meeting the need for new capacity and making the low carbon transi- tion is driving an energy revolution. The UK's switch to low carbon energy has driven a multi-billion pound investment in renewable generation over the past decade. In contrast to our current electricity supply, which mostly originates from centralised locations, a large proportion of new genera- tion, such as offshore wind, will be located in remote regions. This year, when Electricity Market Reform (EMR) comes into force, the guaranteed prices (contracts for difference) offered to new nuclear and offshore wind will drive an influx of even more green energy on to the grid. To allow for the switch to distrib- uted energy and for the benefits of those and future investments to flow through to energy users, it is vital that a resilient power grid is in place. The supply from these green energy sources fluctuates and, unlike current power stations, much of it will come from remote onshore and offshore areas. In order to run an always-on economy using renewables, we must embrace advanced grid technolo- gies that balance intermittent green energy with existing fossil fuel sources. If we want a power grid that supports the UK's low carbon transition, then we need to make demand meet supply, not just make supply meet demand, as happens today. To make green energy work for us, we need to be able to deliberately increase demand (to absorb the large surges of energy that renewables produce) and then be able to reduce demand when supply drops. To achieve this we need everything from con- sumer engagement through to innovative technical and commercial solutions, such as energy storage. The energy sector is the only supply chain business model that does not "warehouse" its product. Yet energy storage is crucial for making green energy technologies viable. Storage effectively enables grid operators to move electricity capacity from one time of day to another, smoothing the peaks and troughs created by low carbon technologies, and thereby avoiding the need to upgrade or replace infrastructure, while reducing our reliance on carbon-emitting generation resources. As well as balancing the power grid, large energy users could use storage to buy power off-peak, then store and use it as needed, which would cut bills dramatically. From a macro-economic point of view, Imperial Col- lege estimates that 25GW of storage capacity located on the electricity network would cre- ate savings on UK energy spend of up to £10 billion a year by 2050. Aside from these savings (and other whole-system benefits such as capital defer- ral on expensive copper grid reinforcement and enhanced resilience), the grid will not have the capacity to plug in the volume of low carbon technologies promised by EMR without adequate energy storage. Why then, given the chancellor's aim to "make the UK a world leader in energy stor- age", does the UK currently rely on just 3GW of energy storage capacity, over half of which comes from a single hydro-electric storage site built in the 1970s? The answer is that grid-scale energy stor- age is still a relatively immature and expen- sive technology (apart from pumped hydro storage,which has limited options for new capacity). However, that picture is chang- ing fast. Also, the full benefits of installing energy storage on the network are not fully understood. Currently there are limited large-scale energy storage projects in the UK, leav- ing a confidence gap. To address this, UK Power Networks in partnership with S&C Electric Europe and other partners recently announced a cutting-edge trial of energy storage technology to establish the impact on the grid of absorbing energy, then releas- ing it at peak times. The trial will test the ability of energy storage to help support capacity constraints and to balance low car- bon generation. It will be Europe's largest battery energy storage system. The £18.7 million project – of which £13.2 million comes from Ofgem's Low Carbon Net- works Fund – will be based at the electric- ity substation serving Leighton Buzzard in Bedfordshire and will deploy a battery stor- age facility using advanced lithium manga- nese technology from Samsung SDI. When the facility is operational later this year, the substation is expected to defer more than £6 million on traditional network reinforce- ment methods, such as cabling and addi- tional transformers. For the first time, this project will dem- onstrate storage across multiple parts of the electricity system, outside the boundaries of the distribution network, allowing National Grid and energy suppliers to explore the shared benefits of storage. By demonstrat- ing 6MW/10MWh of storage, the project will explore the value of using storage to man- age dynamic consumption patterns and supply to make the network more resilient and responsive to fluctuations, while cut- ting infrastructure and cabling costs. Once proven, the replication of the method across all of UK's networks could conservatively save more than £700 million by 2040 com- pared with business-as-usual approaches. Perhaps most excitingly, the trial is expected to show how a smart distributed energy system, supported by storage, could enable distributors to take on a multi-dimen- sional role, receiving and absorbing "wrong time" green energy then redistributing it when needed. As we make the low carbon transition, it is vital we safeguard reliability, resilience and certainty of supply. As utilities face up to the challenge of bringing new technolo- gies such as solar and wind on stream, the networks need to be ahead of the game in testing and adopting smart technologies, like storage, to make the grid flexible enough to cope with the change. Andrew Jones, managing director, S&C Electric Company Europe; Nick Heyward, project director, Smarter Network Storage, UK Power Networks For more information on the storage trial: www.ukpowernetworks.co.uk/innovation Putting storage to the test Electricity storage could help balance the intermittency of renewables and minimise the need for expensive network reinforcement, say Andrew Jones and Nick Heyward.

Articles in this issue

Archives of this issue

view archives of Utility Week - UTILITY Week 2nd May 2014