Energy and Climate ChangeWritten evidence submitted by the Electricity Storage Network
1. The Electricity Storage Network is a trade association whose members are interested in the development of electricity storage technologies and their application to the electrical power system. Members include the transmission system operator, distribution network operators, manufacturers of electricity storage technologies, power industry equipment, engineering companies and consultants, project developers, academic institutions and other researchers. Membership includes those based in the UK and overseas. Through its membership, the Network is able to call on expertise and experience of the use and application of electricity storage. We are responding to this call for evidence to make particular reference to the need for the future electricity market to include the application of electrical energy storage, at all scales. We would be pleased to submit further explanation of our evidence if required.
2. Electrical energy storage is available now, and can be embodied in a number of different technologies and in many alternative configurations of energy and power. Medium sized projects, such as in the range 5–50 MW would be well suited to applications dispersed on the distribution network, and associated with community energy projects, or mid-size generation or demand customers. This inquiry is therefore very relevant to the role of mid-size electrical energy storage.
3. While it is accepted knowledge that storage can improve the overall operating efficiency of the electrical system, by lowering overall system costs, enhancing security of supply and reducing emissions, deployment has not been significant because of a number of barriers which tend to favour other technologies.
4. The main reason for under—deployment of mid-size projects in energy storage is financial. A 5 MW battery energy storage project might be expected to cost £10–20 million, when all project costs, such as planning, permitting, connection and commissioning have been taken into account. However, against an expected lifetime of 15–20 years, the future income predictions are so uncertain that most financiers are unlikely to invest as they are more certain of a stable income elsewhere. While a shared ownership model may be attractive in principle, it still presents a high initial cost, in comparison to other projects with lower initial costs but higher operating costs.
5. Mid-range projects are attractive—operational costs and transactions are lower, and additionally some income streams are more readily accessible to larger projects—such as selling ancillary services to the system operator. However the cost barriers are significant, as these larger projects are more capital intensive. Our members include developers of mid-range storage projects, who are facing these issues constantly in their work.
6. We see local energy storage as being a vital enabler of the embodiment of the smart grid. Local storage enables energy to be used locally, reducing transmission and distribution losses, as well as allowing the network operator to overcome local constraints. The role of storage in balancing variable renewable generation is self-evident, but other benefits include the provision of voltage support (enhancing secruioty of supply), improvements to power quality and the ability to provide a recovery strategy with the formation of local self-healing microgrids.
7. Any consideration of the opportunities to develop local energy resources should include consideration of the role of local energy storage.
April 2013