It will only be possible to unlock the potential of energy storage in the UK if the regulation of energy markets is reconfigured to reward its value, a top academic at the Institution of Mechanical Engineers has said.
Dr Tim Fox, head of energy and environment at the institute, spoke at a seminar on energy storage technologies at the Ecobuild show in London on Thursday. During his talk Fox pointed out that in his view, energy storage could help Britain meet renewable energy and energy efficiency targets.
Fox also said that while current initiatives including pilot deployment programmes by government agencies such as the Department for Energy and Climate Change (DECC) were to be welcomed, government support at present did “not meet the required ambitions”. In addition to energy market reforms, Fox advocated direct government support mechanisms such as subsidies or grants for energy storage projects and research.
Speaking to PV Tech, Fox said that the lack of clear business models is a “major challenge to moving forward” with the use of energy storage in the UK.
“The way the UK energy markets are configured at the moment, energy storage isn’t rewarded for the value that it could potentially bring to the market. So we need the development of business models that enable energy storage providers and operators to essentially make money out of energy storage within the energy system,” Fox said.
“That’s all about market reform and the requirements are different in electricity, heat and transport but fundamentally it comes back to the issue that these areas are regulated by governments. The markets need to be reconfigured to allow storage to enter the market place.”
When asked by Solar Power Portal which was most important, Fox claimed that three levels of support are essential – two financial, one regulatory.
“Firstly, with technologies that are in early stages of development there needs to be an intervention by governments to enable those technologies to be demonstrated at commercial scale – that’s a direct funding, grants, awards-type of funding from DECC, or from the Engineering and Physical Sciences Research Council (EPSRC) or whoever but someone needs to take responsibility for enabling commercial-scale demonstrations to take place.
“Secondly once those technologies are being demonstrated at the commercial level, they clearly need an entry into market and as with all clean technologies in their initial phases for early adoption and market entry, they need some form of government incentivisation. Just like wind and solar have benefitted from feed-in tariffs (FiTs) and Renewable Obligation Certificates (ROCs) and will benefit from Contracts for Difference (CfDs). We need a similar specific mechanism to enable energy storage to get started both at the utility level but also at the local community level.
“The third thing is – beyond that [early adoption stage] – clearly we need to make sure the market is configured in such a way that once those technologies are adopted on a critical mass level, then market forces can take over and they can do business in the marketplace.”
During Ecobuild, Fox also announced that the Institution of Mechanical Engineers is preparing to release a report assessing the available energy storage technologies and how each relates to demand drivers in the UK market. The report is not restricted to electricity storage but also covers heating – which accounts for just over 40% of the UK’s energy demand, as well as transport, which accounts for around 33% of energy demand. Electricity makes up around 26% of UK demand for energy.
Fox’s call for incentivised assistance to the energy storage market echoed the opinion voiced by head of UK battery start-up Moixa, Simon Daniel, who called incentives “essential“.
The Institution of Mechanical Engineers is expected to publish its report into available energy storage technologies and how they relate to UK energy demand in early April.