The Energy Storage Summit EU 2024 heard praise for the UK battery energy storage system (BESS) industry’s approach to “perhaps the most complex energy asset to optimise” from a market perspective.
That was the assessment of Tom Palmer, head of business development at Zenobe Energy, a battery energy storage system (BESS) developer-investor, speaking this morning at the Energy Storage Summit EU in London, UK.
The panel took place on the second day of the event, hosted by our publisher Solar Media. Chaired by Louise Dalton of law firm CMS, the session, ‘UK BESS: Reviewing the policy landscape in detail’ focused on how the industry can stay “at the forefront of the energy transition,” Dalton said.
The UK is widely considered an international leader in battery storage development, both from the viewpoint of deployment figures and in terms of market maturation, with a fleet of around 6.5GW large-scale assets in operation.
“In 2023, we saw a huge build-out of energy storage in the UK, lots of developer and investor interest, including some of the biggest players in the market,” Dalton said.
However, the present moment is characterised by a winter period that has been; Dalton said, “disappointing in terms of revenues”.
Against that backdrop, the lawyer said, the market is facing a gamut of policy changes. Some of these will be very significant and long-term, such as the ongoing Review of Electricity Market Arrangements (REMA) or support mechanisms for long-duration energy storage (LDES).
At the same time, there are changes coming that may resemble “tweaks” or minor adjustments but will nonetheless have a significant impact in their own right.
Balancing Mechanism
The Balancing Mechanism (BM), the real-time supply and demand matching tool wielded by the UK’s National Grid Electricity System Operator (ESO), has long been seen as a key opportunity for battery storage that is largely untapped.
While the reasons for that have been well documented on this site as well as on our UK sites Current and Solar Power Portal, Zenobe’s Tom Palmer said that the new Open Balancing Platform launched by the ESO will help to overcome the limitations of a BM which was designed around legacy assets.
It will take a lot of time and “the changes required aren’t simple,” Palmer said, but it is important to move fast, because time is money and in this case that money is coming from the UK’s consumers.
The ESO is introducing 15-minute settlement periods, Palmer said, “which is great,” but has come very late and is perhaps not ambitious enough. This feels especially acute, given that 5-minute settlement (5MS) has already been introduced into the National Electricity Market (NEM) in Australia, moderator Louise Dalton said.
Innovations and new revenues add complexity
The UK now has a plethora of ancillary services market opportunities and other revenue streams for BESS operators to add to their stack, including a new frequency service, Balancing Reserve.
While Fluence’s Julian Jansen said that this and other recent developments mean the complexity of the market is increasing in a way that developers maybe don’t need or want to have to deal with, Zenobe’s Tom Palmer said the industry “can deal with that complexity”.
“I’m not so worried about the complexity in some senses, because I think the industry can deal with it. I think the optimisers are able to go and optimise in different markets, they’re able to understand that,” Palmer said.
“I don’t see that as a kind of a barrier [to the business case].”
Part of this article was taken from our sister site, Energy-Storage news which can be read here.