There have been huge advancements in energy storage technologies in recent years and we recently shared our expertise in this area by hosting a battery storage technical tour for an international client.
We were able to demonstrate how battery storage works in practice for different types of organisation and offer insight into the UK market. We also explained how different revenue stacking scenarios need to be analysed to make the finance model work.
What is battery storage?
One of the big challenges with renewable energy is the mismatch between when the power is generated and when it is needed. By finding ways to store the energy that is produced by solar panels on a sunny day, for example, and saving it up for use overnight or when poor weather and cloud reduces output, clean energy can play a more effective role in our country’s energy infrastructure and economy. Improving resilience at times of system stress for both National Grid and the UK’s electricity users.
Storage can be used on the grid as well as in a domestic or business setting and there are a number of battery storage options currently in commercial use in the UK including solid state and flow batteries. This complements the wider energy storage solutions in use such as pumped storage and pneumatic.
Revenue stacking
In the UK, energy storage is monetised in a number of different ways:
- Price arbitrage in the wholesale market;
- Embedded benefits such as the fact that distribution-connected batteries are not subject to network charges;
- Capacity market agreements;
- System services such as frequency response, reserve and transmission constraint management.
- Improved resilience to issues caused by electricity system intermittency – brown-outs/black-outs.
By stacking these benefits, it becomes far more feasible to invest in battery storage than it would otherwise be without using such a model.
This is a complex area and one that is in its infancy but thanks to innovation in energy storage and a move from energy consumers and suppliers to rethink the way the energy market operates in the UK, there are significant opportunities for large energy users and those planning major power projects to look creatively at the way they invest in energy and plan future energy management, complementing existing efforts to reduce energy use and invest in renewable energy technology.
To find out more about energy storage and revenue stacking contact Chris Paddey. Email chris@paddenergy.com
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