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10 | 9TH - 15TH OCTOBER 2015 | UTILITY WEEK Policy & Regulation Market view I n 1882, the world's first public electric- ity generating station was opened near Holborn Viaduct in London to provide street lighting. Since then, Britain has added huge volumes of new generation to the net- work, growing from a few kilowatt-hours in the late 1800s too more than 300TWh in 2014, according to the Digest of UK Energy Statistics. The electricity network has seen little change in more than 100 years compared with other industries, for example manufac- turing and telecommunications. However, we have now entered what some are calling the third industrial revolution, transforming our electricity networks and moving towards a low-carbon economy. During this shi, the demand for energy is expected to grow, with US market research firm Transparency predicting that the smart grid technologies market will be worth £75 billion (£50 billion) by 2019. One obstacle to the functioning of the electricity market has been the absence of cheap, efficient and reliable storage, which would enable the grid to be balanced by absorbing excess or off-peak energy for peak time distribution. The integration of more wind and solar will put a strain on baseload generation. As renewable penetra- tion increases, demand for baseload genera- tion will decrease throughout the day until it goes below the minimum needed for plants to stay online, resulting in operators having to switch them off. But when solar and wind generation drops, there is a steep ramp up in demand and the baseload is required to come back online. This is referred to by industry as the duck curve. Storage solutions could be charged during the daytime, effectively increasing the minimum load and also supporting the net- work when the peak returns. With the advancement of battery technol- ogies, storage is no longer a myth but a real- ity, which has been demonstrated at scale around the world. Earlier this year, energy storage was identified as one of the founda- tions for developing a clean energy future by the Global Apollo Programme, which aims to make the cost of green electricity lower than coal-fired electricity within ten years. The UK government and regulator Ofgem have funded several demonstration projects in the past 24 months, including a fully automated 6-10MWh smarter network stor- age project hosted by UK Power Networks, which is assessing the role of storage in cost effectively delivering the UK's carbon plan. It is expected to save more than £6 million on traditional network reinforcement methods. S&C Electric Europe was chosen as the lead supplier to the £18.7 million project, drawing on its extensive experience of deploying stor- age projects in the UK and around the world. Capacity margins in the UK are at a seven- year low, and the network is reliant on CCGT and diesel gensets for back-up. The use of these technologies goes against the gov- ernment's low-carbon ambitions and they offer only a short-term solution. Storage is a longer-term solution that can be used to supplement peak capacity when required, and improve the utilisation of plants on the system, not only by providing capacity but also flexibility. The need for this flexibility is increasingly important, due to the rise in intermittent renewables. By 2050, decarbonisation of specific sec- tors in the UK will result in a 110GW increase in electrical demand from transport, and a change to electric heating will add 200GW to peak demand. Under Ofgem's RIIO-ED1 price control programme, Britain's 14 elec- tricity distribution network operators will undertake £25 billion of network upgrades between 2015 and 2023, helping to deliver a sustainable energy sector while provid- ing customers with value for money on that investment. If the UK and other economies are to roll out storage across their electricity networks, then more appropriate market mechanisms need to be introduced to support the indus- try, and companies must provide the busi- ness case for projects. California has in the past few years set a storage mandate of 1.3GW – with Japan, Germany, and Porto Rico all setting their own incentives to encourage the deployment of storage. S&C is working with network operators to explore the applications and business cases for energy storage and has installed 20 per cent of the world's utility scale bat- teries. The PJM market, the world's largest competitive wholesale electricity market serving more than 61 million people in 13 states and the District of Columbia in the US, is rewarding storage for providing fast frequency response. Ancillary grid services, such as frequency regulation, are crucial for maintaining the stability and reliability of the power system. Frequency regulation is used to minimise The energy storage economy The need to cut emissions is driving the electrification of the economy, and that means large-scale storage must be incorporated into the system, says Mick Barlow. Predictions by National Grid for future consumer power demand in the UK between 2015 and 2035. The duck curve graph shows that demand could swing by 17GW within-day solely due to a change in cloud cover. 35 30 25 20 15 10 5 0 2015 2020 2025 2030 2035 2035 - HS 2035 - LS 0:30 1:30 2:30 3:30 4:30 5:30 6:30 7:30 8:30 9:30 10:30 11:30 12:30 13:30 14:30 15:30 16:30 17:30 18:30 19:30 20:30 21:30 22:30 23:30 GW