The industry has long called for better regulatory definition of energy storage and the development of an asset class. Image: LG Chem.
The UK’s government department for business, energy and industrial strategy (BEIS) and its regulator, Ofgem, have jointly launched a Call for Evidence on System Flexibility for the country’s power networks, putting storage at the forefront. Stakeholders have been given until mid-January to respond to the document, which is expected to inform policy on everything from time-of-use electricity pricing to EV chargers on the network. The UK Electricity Storage Network has for several years been loudly calling for acceleration in storage deployment, advocating for 2,000MW by 2020 for Britain. The trade group’s head, Anthony Price welcomed the publication of the much-delayed call for evidence and spoke to Andy Colthorpe about it.
ESN was advocating for a license as a pathway to electricity storage being defined as an asset class. Will that be something your members will ask for from the government?
We stuck our neck out three years ago and said given all the mess there is in the power industry, what are the things holding storage back? One of those things was lack of clarity in the regulation and definition so we said let’s have a new license for storage because storage isn’t covered by any of the existing license categories. That’s been picked up, they’re [BEIS and Ofgem are] asking for evidence for and against licensing and furthermore that they’ve used our license proposal or our definition as basis for the changes to legislation and regulation.
Anything would be better than the current lack of clarity that we have at the moment. But if you just have an asset class, it doesn’t solve all the problems, all it does is make sure there is a clear definition that’s available. If you look at the challenge of putting storage on the system, and you look at the implications of defining storage and where storage sits throughout the whole of the industry, I’m of the opinion that only a license will do, and I think many of our members also see that. Storage crops up in so many different activities, in so many different parts of the energy sector, so you’ve got to look at it in terms of planning, in terms of business rates, in terms of operation, connection agreements and that’s just a few [aspects].
System vs network
Is there enough recognition of storage to benefit the network versus storage to benefit individual users? Should the call for evidence be able to capture that?
That’s one of the things we need to bring out, because primarily storage should be a system asset and if you don’t have a plan for storage and you don’t have a strategy and a means of implementing that strategy, you are going to end up with unintended consequences, you could end up with a lot of stranded assets, with things that are not doing what was intended and could have nasty implications for the system and these things will happen very, very quickly.
If you look at the support given to put PV on peoples’ roofs, it’s great that we’ve got the market going, the unintended consequence is that we have clusters where there’s a surfeit of generation at peak times during the day. If we had real-time pricing we’d be seeing real negative prices at around lunchtime with difficulties of controlling the network at huge additional cost to local network operators. If you prevent the network operator from putting in storage, who’s going to put in the storage to take advantage of the local generation peak? Because it won’t be solved necessarily by plants that are providing enhanced frequency response (EFR). So we need different types of storage to do different things.
Currently UK distribution network operators (DNOs) aren’t allowed to own storage assets, why is that and what’s your position?
The argument against the network operating storage is that they would then be involved in buying and selling electricity, which seems to be counter to their distribution license, but this of course is just to my mind a little bit of a red herring because everything that a network operator does concerns the movement of electricity…The network operator is trying to operate their network at the lowest cost because that’s a condition of their license and they need to offer best value to their customers and if by putting storage in they can lower the whole cost of operating the network, that’s something they should do. There seems to be an argument that says, the network operator shouldn’t be allowed to do that because he’s got access to low cost capital, he’s got preferential planning rights, he can do things which a private developer couldn’t do, well my answer to that is, why hasn’t a private developer already done it?
I am not saying that DNOs only should be allowed to put in storage, I’m not saying DNOs will put in the majority of storage but we are saying DNOs should be able to put in storage because it’s a network tool which they need to have in their portfolio. To write it out now, we will live to regret it in 10 or 20 years’ time when we go through the next iteration of market rules.
Anthony Price of the Electricity Storage Network. Image: Electricity Storage Network.
'Everything is getting lined up to make it a good exciting future for electricity storage'
Let’s hope with document having taken so long to come out that it’s not going to be a really long process to take all these views on board and act on them.
Take some comfort, it’s a call for evidence which means the process to collect information is much faster, having got the evidence they can then decide what it is they need to do and go straight through to the next step. So although it’s taken a long time for the baby to be delivered, the baby’s going to grow up very quickly. That’s my hope and our message to the teams at BEIS and Ofgem is that we are here to help them through on this transition. Let’s again rejoice – three years ago we didn’t have a storage team at DECC (predecessor office to BEIS, disbanded this year) or Ofgem. Those teams are now in place because we asked for them and ministers and senior civil servants recognised the need for them. Everything is getting lined up to make it a good exciting future for electricity storage.