Exploring energy issues

Having storage in networks is a foregone conclusion in most industries. In the water sector reservoirs hold potable drinking water supplies and massive underground pipes act as additional storage for sewage. Gas is converted to liquid (LNG) and held in tanks for transportation or storage. But in the electricity sector storage remains elusive. And yet the need for this is becoming even more crucial as the UK seeks to decentralise and de-carbonise energy provision. How wonderful it would be if homeowners could store the energy generated by their solar panels, or farmers could capture the energy from their wind turbines for later use.

The good news is that this could happen sooner than we think. Two recent developments have thrust battery storage into a 12 month boom period. Before September 2015 Distribution Network Operators (DNOs) who bring electricity from the national transmission network into homes and businesses, had zero obligations from third parties on grid-scale storage. But today there are around 20GW of obligations.

Driving this boom is Ofgem’s £500m Low-Carbon Networks Fund and National Grid’s Enhanced Frequency Response competition. Since becoming available in 2010 the Ofgem finance has led to massive investments in new storage technology such as the UK Power Networks Leighton Buzzard £17.2m Smarter Network Storage Project. The primary aim of the 10MWh facility is to allow deferral of the need to reinforce the network, so instead of extending a substation, the battery provides peak storage at the times of year where load exceeds the local constraint.

And in September 2015 National Grid launched the UK’s first ever competition to provide network storage that would respond within 1 second. The organisation received 37 tenders containing 64 proposed solutions and 61 of these were batteries. This is expected to result in eight new battery storage solutions being built in the UK.

At the same time the cost of renewable energy generation is falling significantly with onshore wind and solar power having the lowest capital costs of all technologies, and figures from Scottish Energy showing that offshore wind costs have fallen by a third over the past five years from £136MWh to £100MWh. The firm has launched a pilot “smart battery solar power home” which can store excess solar energy in a battery.

Yet despite the incredible technical advances being made and strategy levers being implemented there remains a need for clearer long term energy policy if major new projects are to move forwards. Investors are viewing the market with caution and the UK’s position in the single energy market remains a negotiating point with the EU for Brexit negotiations.

All of this and more was covered at the Major Projects Association event “UK Energy to 2025 – getting major projects moving” which I attended as a reporter.  A summary of the day produced for the MPA can be read here.