Storage

Energy Storage has a critical role to play in current and future grid operations.  The role of storage in the electricity grid has historically been limited to a handful of large-scale pumped storage facilities, however with the growing, critical need for more flexibility within the UK’s electricity network, over 1.1GW of new energy storage projects were announced during 2015.

In the UK a tender conducted in July 2016 by National Grid for 200MW of “Enhanced Frequency Response” is expected to kick-start the storage market which is forecast to grow to 1.2GW of capacity by 2024, with 400MW of this made up of short duration balancing services as procured under current and future Enhanced Frequency Response (“EFR”) tenders.  Over time, further applications for battery storage technology will become increasingly viable including (i) power price arbitrage/peaking capacity; (ii) Integration/co-location with renewables; (vi) behind the meter for commercial electricity (Commercial and Industrial) and residential (PV + Storage) consumers.

The cost of Lithium-ion, the main technology used for batteries, continues to fall, largely driven by the increased demand for electric vehicle batteries.  Costs are forecast to continue to fall at rates comparable to cost decreases seen in solar.

While the UK has taken a leading role in advanced energy storage applications, the US and Australian markets have also seen rapid developments.  The US PJM market has an established frequency regulation market and in California there have been successful auctions for energy storage services conducted by local utilities.  In Australia “island grids” are being experimented with in the form of grid-scale storage units being connected to local distribution networks.