Utility Week

UTILITY WEEK | 9TH - 15TH MARCH 2018 | 19 Finance & Investment is still an uncertain future with unpredict- able revenue streams." Palmer says there has recently been a ramp-up of behind-the-meter solutions on industrial sites, which are bigger in scale. These, he argues, are beneficial in that they can capture higher capacity market pay- ments from being demand-side response rather than pure battery play, so they are not impacted by the government's de-rating changes. "They're more advantageous in the short term," he says, "but they've got a number of challenges coming up in the future, with the targeted charging review in probably about 2020/21. They're going to face a tough time then, but at the moment they look good because they're protected and get access to network benefits." Despite its promise that it will help in the move to a more flexible energy system, pros- pects for energy storage are still uncertain. Baringa's Grant suggests we may see a "wave" of storage providing grid services, followed by a "soƒening in the market", until battery technology matures and price points drop to make arbitrage models sus- tainable in the long term. The government claims it is committed to storage. However, if it wants rapid deploy- ment it must keep to the targets and time- lines it has set out to create a level playing field for the technology. Source KPMG analysis: CM Registers Source KPMG Recent energy storage announcements 14 Feb 2018 – the government announces £30 million funding for 21 vehicle-to-grid projects. 1 Feb 2018 – National Grid, Northern Power- grid and UK Power Networks join forces with a Nissan-led consortium to roll out a "world- first" £9.8 million trial for 1,000 vehicle-to- grid chargers. 26 Jan 2018 – Faraday Institution announces £42 million funding to develop "lighter and safer" electric vehicle batteries. 25 Jan 2018 – a consortium is launched to develop the first large-scale UK domestic trial of vehicle-to-grid charging technology for drivers of electric vehicles. 11 Jan 2018 – storage developer VLC Energy completes the installation of the UK's largest utility-scale battery portfolio to date at 50MW. 13 Dec 2017 – investment company ILI Pump Storage Hydro reveals plans to develop three pumped hydro storage companies in Scotland, with an estimated total capacity of around 1,200MW. BREAKDOWN OF AWARDED CAPACITY BY PRIMARY FUEL TYPE Primary fuel type Capacity (MW) % Biofuel 23 0.05 Biomass 61 0.12 Coal 2,565 5.09 Diesel 361 0.72 Distillate 225 0.45 DSR 1,201 2.38 Gas 29,611 58.74 Hydro 654 1.30 Interconnector 4,558 9.04 Nuclear 7,926 15.72 Storage, battery 153 0.30 Storage, compressed air 3 0.01 Storage, pumped hydro 2,524 5.01 Waste 547 1.08 Source: National Grid CAPACITY MARKET AUCTION, DELIVERY YEAR 2020/21 DECENTRALISED CAPACITY SUCCESSFUL IN CAPACITY MARKET AUCTIONS New-build Refurbished Existing 3,500 3,000 2,500 2,000 1,500 1,000 500 0 DSR New-build distributed generation Storage Capacity (MW) Nuclear Pumped storage Storage Hydro Interconnector Gas (CHP) Gas (peaking) Gas (CCGT) Coal Bio energy Diesel Proven DSR Unproven DSR 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 2018/19 2019/20 2020/21 2021/22

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