The UK's Institution of Civil Engineers (ICE) has published a report which looks at how unlocking the potential of electricity storage through regulatory changes would support the transition to a secure and affordable low carbon economy, adding to a chorus of recent voices on similar topics coming from Britain.
The ICE report 'Electricity Storage: Realising the Potential’ proposes market-based solutions for the development of electricity storage, pointing out that it can bring advantages to the grid including improved grid flexibility, safeguarding against blackouts and reducing greenhouse gas emissions. It claims this could be possible without subsidies but for a number of regulations that stand in the way.
Other recent reports circulating in the UK from top names have focused on similar topics, including the publication of ‘The Decentralised Energy Transition', co-ordinated by major consultancy group KPMG and co-authored by UK solar developer Lightsource Renewable Energy, solar investment group Foresight Solar and renewable energy generator and utility Good Energy. It proposes a future strategy at government level which it claims would help the UK meet several energy market dilemmas. In part, this would be done by reallocating funding for solar currently available under the country’s Levy Control Framework government budget for energy, and not exceeding it.
According to the report's authors, the UK government could deliver cheaper electricity bills to households and businesses by pursuing a decentralised energy strategy with solar and storage at its centre.
Meanwhile UK energy regulator Ofgem has produced its own reports, one examining how to increase flexibility in the network – again with storage playing a crucial role – and another looking at how “non-traditional business models” could enable households and communities to participate in providing grid services, through measures including aggregated energy storage and demand response.
Jill Cainey of UK trade and advocacy group the Electricity Storage Network welcomed the publication of Ofgem's reports, and said the country's grid operator, National Grid, was also aware of the potential of storage and the barriers preventing its recognition. Cainey said this would require reconfiguring the role of distribution network operators (DNOs) into distribution system operators (DSOs) – making them the platform through which flexibility resources were aggregated and traded.
Politician calls for regulatory definition – no subsidies
One UK politician, Alan Whitehead, attended the launch of the 'Decentralised Energy Transition' report last week. Speaking to PV Tech Storage at the event, held at the UK Houses of Parliament Whitehead, who is shadow energy minister, confirmed that regulation – or more specifically the lack of regulatory definition of storage and the role it can play in the network, was the main barrier to realising its potential.
“Storage would need to, as it were, enter the regulatory market in a coherent way, Whitehead said. “Is it capacity or is it demand-side response? It needs better definition. Assuming its both there should be instruments within…markets which enable that.”
Whitehead, who has long been a vocal advocate for renewables and community-owned energy, said that it has been recgonised in the UK that renewables have pushed down electricity prices at certain times of the day. Once these renewables stop producing energy, such as when the sun stops shining for solar systems, prices are significantly ramped up towards the evening peak times.
Whitehead added: “Now, if you’ve got storage coming in ready to smooth out that ramp curve – that is a substantial saving in its own right. […] You could incentivise storage by splitting the difference in that ramp cost. Then actually there’s no subsidy involved at all.”
In a 2014 video interview with PV Tech Storage, Whitehead said that electricity storage could be the “glue that holds the network together”.
Economic advantages being held back
The new ICE report focused on the economic potential of storage use at grid-level. It said the economic advantages of storage are held back by regulation and the Institution recommended three main actions to remedy this.
Firstly, under the Balancing Services Use of System (BSUoS), storage operators are “double-charged” for both drawing electricity from the grid (when charging) and exporting to the grid (when generating). ICE recommended removing these charges as an economic incentive to drive more deployment of storage.
Secondly, the licences of Distribution Network Operators (DNOs) restrict them to distribution activities only and due to a lack of technical classification of storage, DNOs cannot deploy and operate storage. Therefore, the government could classify storage as a separate activity, with minimal administration costs.
The third recommendation from ICE was to make storage, which is co-located with renewable energy generation, eligible for a percentage premium Feed in Tariff (FiT).
Philipp Grünewald, one of the report authors and research fellow at Environmental Change Institute, University of Oxford, said: “Markets and regulation do not currently recognise the potential of electricity storage and need to adapt if Britain is to take full advantage of the technologies on offer.
“We have built a national electricity grid to deliver electricity from where it is generated to where it is needed. Electricity storage can help us in much the same way by moving electricity from when it is generated to when it is needed. With more and cheaper renewables, storage will become a crucial part of efficient future energy systems.”
In addition to the high level reports, at a more downstream level, Martin Cotterell, a veteran UK solar installer, is currently readying for publication a set of codes of practise for installers. Aimed mainly at the growing numbers of solar installers diversifying or switching over to selling energy storage, the standards document aims to improve safety procedures and avoid the misselling of the technology. It is being produced by the Institute of Engineers and Technology (IET), which is behind many initiatives in technical standards and protocols in the UK, in conjunction with the UK National Solar Centre.
Additional reporting by Liam Stoker and Andy Colthorpe.