Investing in UK Electricity Storage
Recently published report by Eunomia looking at the deployment of energy storage in the UK.
Eunomia’s report Investing in UK Electricity Storage was published last month providing the first forecast for battery storage deployment in the UK.
The report, which focuses on battery technologies, also provides analysis of a range of electricity storage applications as investment propositions, together with figures on the level of deployment to date in the UK.
Currently, the installed capacity of battery storage in the UK stands at 24MW, the majority of which is ‘proof of concept’ projects funded by DECC or Ofgem. However, the growing challenges brought about by increased deployment of distributed generation, coupled with changes to the way we are using electricity, is driving the need for increased flexibility within our electricity network.
Storage technologies can play a major role in meeting this need, particularly batteries which are easy to deploy and already of scale and degree of commercialisation that makes them attractive to investors. Eunomia forecasts significant growth in the sector in the next five years. Deployment looks set to take a major step forward in 2017 as National Grid’s Enhanced Frequency Response contracts, intended to help maintain grid frequency within an acceptable range, come on line. Subsequently, as technology and installation costs fall in response to greater deployment, exponential year-on-year growth is predicted, with the total installed capacity exceeding 1.6 GW in 2020.
Eunomia’s analysis suggest that ‘behind the meter’ applications, installed by energy users are the most attractive investment proposition, given growing differences between peak and off peak retail prices, coupled with increasing charges from the distribution and transmissions operators. With minor regulatory changes, however, the installation of batteries into the distribution network could also become a major contributor to increased grid flexibility, whilst also increasing capacity for more renewable generation.
But whilst electricity storage is currently being widely touted as a solution to the intermittency of renewables, integrating batteries with solar PV or wind farms is perhaps less attractive than other applications due to the relatively small differential between peak and off-peak retail prices paid for power supply.
Download the report here.
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