ESN warns that energy storage delays could cost taxpayers £100 million a year

The Electricity Storage Network (ESN) has warned government that failing to install an additional 2GW of electricity storage by 2020 will result in £100 million-a-year costs for tax payers and investors.

ESN’s recent electricity storage roadmap predicts that the UK needs to install a minimum of 200MW of installed energy capacity every year until 2020 in order to maximise investment in new generation capacity and power grid infrastructure by 2020. The network warns that the UK’s current electricity storage capacity is less than half of what is required to balance the onset of low carbon technologies onto the grid.

Anthony Price, director of UK’s Electricity Storage Network, explained: “The Energy Bill is seeking to attract £110 billion of investment to bring about a once-in-a-generation transformation of our electricity market, yet the investment in a decarbonised power grid without adequate electricity storage will result in additional costs from network fees, curtailment and system balancing of the order of £100 million a year.” 

The Department of Energy and Climate Change (DECC) recently announced the winners of a £20 million energy storage competition but the ESN believes that DECC’s efforts are not going far enough. The network notes that a lack of certainty around revenue is discouraging investment in the energy storage sector.

ESN is also critical of the current licence conditions for electricity network operators which limits the ability of network operators to own and operate electricity storage projects and receive payments for the services. As a result, ESN is calling for a change in policy that would see electricity storage reclassified as an independent market category entirely separate from generation, transmission, distribution and supply – ESN believes that this would help stir the required investment to hit its target of 2GW of electricity storage capacity by 2020.

Price added: “To stimulate the market – both for innovation and large scale implementation – Government must set a target to achieve 2GW electricity storage by 2020 and support that with a market mechanism to drive innovation through to delivery.”

ESN points to other countries who are leading the way in incentivising energy storage projects such as California’s storage target of 1,300MW by 2020 and Germany’s €25 million support for residential storage.