Managing growth in demand for power: Exploring the commercial viability of battery storage

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Managing growth in demand for power: To leverage the potential of battery storage technologies, the UK Business Department has outlined plans to invest in the growth of the UK power sector.

The UK energy market is undergoing significant change as energy firms seek to cope with increased variability of demand for electricity. Furthermore, energy prosumers are now able to produce and consume their own energy via renewable energy sources at home.  Investment in the renewable energy market is projected to grow by 15% as the UK government aims for renewable energy to account for 30% of the energy mix over the next five years. Interestingly, energy storage has been identified as one of the government’s top priorities, allocating subsidies and funding to the private enterprise sector to identify a commercially viable energy storage solution.[1]  Moreover, research conducted by Aquila, suggests batteries and other energy storage technologies will play a growing role as part of the renewable agenda. Released findings identified, ‘Cost reductions, technology development and improving regulations, will continue to strengthen the case for storage moving forward.’[2]

To leverage the potential of battery storage technologies, the UK Business Department has outlined plans to invest in the growth of the UK power sector. The launch of a recent £20 million innovation competition seeks to identify a commercially viable energy storage solution to build upon its current energy infrastructure. [3]  The Storage at Scale Competition, will make funds available for three projects which offer potential storage capacity for either a minimum output of 30 megawatts or minimum capacity of 50 megawatt hours. Currently, lithium-ion batteries are considered a short-term storage solution, as well as pumped hydropower technologies which is limited by geographical proximity. Studies show the UK could save up to £7 billion by 2030 if energy storage was integrated into its existing infrastructure. Emerging technologies such as compressed air power and power-to-gas solutions have shown potential to deliver additional storage capacity. However, few operational projects can meet required energy storage levels from a commercial standpoint.

What Next? 2019 and Beyond

Mini-Power Stations

Start-ups are aiming to fill the gap and develop the next big energy storage technology medium. Smart Hub and energy storage smart home firm Moxia has recently begun marketing its own battery storage technology which aims to revolutionise British homes and turn them into ‘mini power stations.’ For example, its 4.8kWh device has an output of 1000W, which could provide enough energy to power certain domestic appliances and Electric Vehicles (EV). Its next generation Artificial Intelligence (AI) platform monitors energy consumption and renewable generation to enable additional cost savings. [4]

The growth in renewable solutions has contributed to the creation of Virtual Power Plants (VPP). In 2018, Limejump gained access to National Grid’s Balancing Mechanism (NGBM) through its advanced technology and analytics platform. Smaller Generators, Demand Response and Battery Storage sites can now enter the Balancing Mechanism by partnering with Limejump to enable the expansion of the VPP network across the UK. The VPP network will now be able to pose a serious challenge to the established DNOs’ operating model and other large power plants in the NGBM.[5]

Smart Solar Storage

Solar Panel installation in the UK has stalled since subsidies and other incentives were scrapped by the UK government. However, utilising advances in battery storage will enable households to consume more electricity. A storage system on-site could increase the amount of electricity currently used from 35% to 75%.[6] For example, Tesla’s next generation Powerwall 2 forms part of an overall package offering for households who wish to generate, store and consume solar electricity.

Consumer projects led by EDF Energy are currently exploring the trading of solar power within communities via a blockchain enabled pilot project. A select group of customers will be able to use a peer-to-peer trading platform using electricity generated from a rooftop solar installation. Residents can gain access to power stored in domestic batteries which can be shared by households when required. By leveraging blockchain technologies to monitor power consumption, consumers can simply request power through a dedicated trading platform. Currently, consumers are only able to purchase electricity from a single provider, restricting the usage of peer-to-peer trading networks.[7] Ofgem is known to be exploring contractual market changes surrounding the power sector due to the demand for flexible energy arrangements.

So, what does this mean for the UK energy market?

Over the next 10 years, we will see a change in the way homes manage their energy consumption. Growing numbers of households will explore the potential of generating and storing their own electricity to support a low carbon energy eco-system. Advances in battery storage technologies by some of the leading providers including Moxia and Tesla will see homeowners purchasing such devices to save on yearly charges. As the initial upfront charge for battery storage devices reduces, homeowners will be inclined to explore the potential efficiency savings associated with energy storage. Moreover, the shift to solar offers further opportunities for homeowners to store energy on-site as opposed to selling excess energy back to the grid. Technological advances will continue to shape the market in the drive to develop a wholesale energy storage solution.

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