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The Topic: Electricity storage UtILItY WeeK | 28th November - 4th December 2014 | 15 to my ears," says Holmes. "It could solve the problem of a [lack of a] secure revenue stream for storage – which has no Renewa- bles Obligation Certificate or FIT [feed-in tariff] etcetera." But Holmes adds that the open-ended run time obligation in capac- ity contracts is not viable for storage plant, which have limited output. Meanwhile, regulatory adjustments in the offing include stiffer penalties in the cash out arrangements under balancing and settle- ment. The impact they may have on storage is not certain. The proposed new arrangements would have a single cash out price, making the imbalance penalties significantly more costly. Holmes says this could go either way: "More painful cash-out penalties will drive generators and suppliers to trade to avoid imbalance. That could reduce opportunities for storage. But an increase in the price pen- alty increases the value of storage." Further policy uncertainty for storage may be lurking in the future generation fuel mix. "If there is more gas it's hard to say to investors we need more storage," says Hol- mes. "And the government is bending over backwards to get gas and coal in." Holmes says interconnection with other European markets would ensure that UK shale gas would not repeat the gas price plummet seen in the US. Overall expan- sion in gas-fired generation "may postpone the [storage] market signal for two or three years", Holmes says. Regulation, interconnection, market rules and political support for gas are all creating uncertainty for anyone looking to invest in UK electricity storage. But storage as a tool for DNOs has clear value that is currently not readily acces- sible. According to public sector body the Low-Carbon Innovation Co-ordination Group (LCICG): "The value of some of the services that storage can provide cannot be easily captured under existing market arrangements." Nevertheless LCICG forecasts that the UK will have storage capacity of 27GW by 2050. A separate report by Imperial College pre- dicts 25GW by 2050, while government esti- mates are 20GW. Clearly for these forecasts to come about, storage technologies must win the economic argument and prove their tech- nical viability. But policymakers must first clear the way. For the policymakers there are political influences at play, but if they are to back storage they need to get their act together quickly. Storage schemes typically have lead- in times of five-ten years. Trevor Loveday is a freelance journalist "The capacity mecha- nism was music to my ears. It could solve the problem of a [lack of a] secure revenue stream for storage – which has no Roc or FIT." David Holmes, managing director, Quarry Battery Company Opinion: the capacity mechanism is the perfect fit how oTher coUnTries are approaching elecTriciTy sTorage Source: Pathways for Energy Storage in the UK, Centre for Low Carbon Futures The Us. The US Department of Energy (DOE) has established an energy storage technologies programme (USDOE, 2011) with two objectives: improving the flexibility, economic efficiency, reliability and robustness of the US power grid; and delivering economic benefits through the transition of technologies to the commercial marketplace. The delivery of the programme is led by the National Laboratories, in conjunction with universities and a range of industrial partners. Energy storage demonstration projects have also benefited from DOE support under the American Reinvestment and Recovery Act (2009). The objective of the DOE programme is to reduce the cost of energy storage by 30% by 2015, by investing $200m (£127m) over the period 2011-15. germany. The German government's energy strategy identifies a set of actions to support the expansion of national energy storage capacity. Immediate actions: update legislation to approve energy storage systems for use in the control energy market and extend the grid charge exemption period for new storage plants (particularly pumped hydropower). Short term: investigate appropriate incentives to encourage the adoption of biomass as a means of integrating intermittent renewables (such as wind and solar), pending the expansion of energy storage capacity in the medium to long term. Medium term: exploit, at all technological and economically feasible sites, pumped hydroelectric storage potential in Germany. Long term: partner with other countries (such as Norway) to gain access to pumped hydroelectric storage capacity outside Germany. china. Support for the development and deployment of energy storage technologies in China is provided by a combination of national and regional/ provincial government policy. A leading example of research and development activity on energy storage, supported by a provincial government, is the col- laboration between the Shanghai Municipal Government and China State Grid to deliver the Shanghai Smart Grid project. The project focuses on the use and integration of battery technologies (including sodium sulphur, vanadium redox and lithium-ion) within a city-scale smart grid.