2017 heralded some significant milestones for the UK’s energy infrastructure.
In April, National Grid announced that Britain had gone a full day without using coal to generate electricity for the first time since the industrial revolution in the 1880s. Solar PV then set a new generation record in May, satisfying almost a quarter of the UK’s total demand. We enjoyed the ‘greenest summer’ ever, with over half of energy generated from low carbon sources. And wind power also surged with the most power produced in a single day. In all, 13 renewable records were broken during 2017.
Our increasing reliance on renewables has helped to build a strong pipeline of connection agreements for battery storage. We will wait to see how many of those turn into real projects during 2018 and whether the bullish projections for the adoption of battery storage in the UK come to fruition.
One such agreement that did become a reality on a utility scale became apparent when renewables developer Anesco announced the first subsidy-free solar farm: a 10MW site in Bedfordshire called Clayhill Solar Farm. The site is co-located with a 6MW battery storage facility that Anesco said was critical in enabling the site’s economic feasibility without government subsidies.
From the perspective of industrial and commercial businesses looking at ‘behind the meter’ storage, we saw a sharp rise in interest from customers in the second half of the year. What’s clear is that to convert interest into projects, businesses must be able to build a business case for adoption of the technology based on their own unique circumstances. Typically, it’s customers that can deploy storage to realise multiple benefits who are leading the adoption charge.
Companies with on-site solar generation can make a strong case for improving self-consumption of renewables by adding battery storage. Likewise, business resilience – or the need to have on-site back-up power to enable business continuity, is another strong business driver for energy storage. Depending on their location in the country, some businesses find it cost-prohibitive to increase their power supply by resorting to costly grid upgrades. Battery storage offers an alternative to such infrastructure upgrades. Finally, demand aggregators are increasingly turning to battery storage to enhance the value that they offer through demand side response (DSR) programmes. Using energy storage offers more flexibility to aggregators by enabling a business to turn down or remove loads from the grid without interrupting critical business operations.
While a ‘hybrid’ battery storage plus DSR approach enhances the flexibility that businesses have when participating in DSR programmes, note that National Grid recently announced a regulatory change to ‘de-rate’ short-duration energy storage. This change offers greater financial incentives to storage technologies that can operate for more than 30 minutes at a time. Incentivising batteries or other storage technologies with longer durations will further enhance grid flexibility.
Energy density is one of the ‘holy grails’ for storage technology, especially when it comes to transport applications, where the electric vehicle has to carry the weight of the battery. Luxury EV manufacturer Fisker announced that it has filed patents on solid-state battery technology that has 2.5 times the energy density of lithium-ion. The new technology, which replaces the liquid or polymer electrolyte found in current lithium-ion batteries with a solid material, will offer more than 500 miles of range from a single charge and enable greatly reduced charging times.
Unfortunately, solid-state batteries are still a few years away from commercialisation (although energy density is less critical to stationary storage than it is to transport applications). What we do expect to see during 2018 is continued efforts to reduce the cost of lithium-ion storage with more investment in large-scale manufacturing plant.
While we don’t expect to see any fundamental enhancements to battery storage tech until at least 2020, we can expect incremental improvements to the control software used in technology platforms used to control battery storage. Increasingly DSR aggregators are investing in their technology platforms to provide more flexible control of assets, using techniques such as machine learning, to enable businesses to take advantage of a broader range of DSR schemes.
Taken together, these trends offer more options than ever to industrial and commercial businesses that want to take control of their energy systems in 2018. Battery storage is emerging as an important enabling technology for grid flexibility, energy efficiency, supply resilience and ultimately generating new income streams through DSR and cost reduction.