UK energy giants to address ‘market failures’ with energy storage working group

Share on linkedin
LinkedIn
Share on twitter
Twitter
Share on reddit
Reddit
Share on facebook
Facebook
Share on email
Email
Statoil’s proposed “Batwind” wind farm-plus-energy storage project in Scotland. Image: Statoil.

Giants of the UK energy sector are to work within a new collaborative group aimed at enabling significant cost reductions for the electricity system through the use of energy storage applications.

The Energy Systems Innovation Platform (ESIP) has been unveiled today by emissions reduction advisory group, the Carbon Trust and brings together utilities Centrica, DONG Energy, SSE, Scottish Power, Statoil and Wood Group’s Clean Energy division.

The companies will work together to solve what they see as “key issues” currently preventing a more cost effective transition to a low carbon energy system by developing new business models.

Andrew Lever, director of innovation at the Carbon Trust, said: “There is now general consensus that the UK energy market needs to be revamped so we can embrace a flexible and more decentralised energy system. However, the fragmented nature of the energy market is driving fragmented decision making and many investments are led by technology, not market needs.

“We now have a window of opportunity to foster new business models and put in place the regulatory mechanisms that will give investors the confidence to stop chasing market distortions and focus on the long term.

“The formation of ESIP is indicative that no one organisation can solve this issue alone and a collaborative approach is essential to deliver the biggest benefit to society as a whole.”

Representing almost half of the UK’s electricity supply market and with initial support from the Scottish government and the Foreign and Commonwealth Office (FCO), the initiative will tackle regulatory barriers which many believe have held back the development of UK storage.

It will also seek greater transparency around the decision making made across the UK energy system concerning the services storage can provide. According to Lever, this includes the choices made across DNOs, Ofgem, National Grid and government which he said “needs to be joined up and transparent to ensure the right direction, rules and signals are given to the market”.  

It is hoped this will help ESIP develop the long term business models necessary to encourage stronger investment and reach the potential of greater flexibility in the UK energy system.

Last year the Carbon Trust led a study which found that the UK could be saving up to £2.4 billion (US$3.05 billion) every year by 2030 if flexibility solutions such as energy storage were integrated into the UK electricity system.

Nils Lehmann, ESIP project manager at the Carbon Trust, said: “ESIP’s focus on developing viable business models for storage use cases aligned with system benefits is a vital piece of the puzzle which has not been looked at yet.

“ESIP works in an evidence-based way to address market failures while simultaneously identifying commercial opportunities for industry. This can help to overcome the ‘chicken and egg’ dilemma between market creation and industry deployment that often limits the uptake of promising new solutions.”

Carbon Trust says each partner brings experience from across the UK energy system, with ESIP taking an “impartial and technology neutral” perspective on opportunities for energy storage to provide flexibility.

However, it will begin its work on integration of wind energy using energy storage, as each member is said to have an immediate interest in this area. For example, DONG Energy is currently preparing to add a 2MW battery storage system into the Burbo Bank offshore wind farm to deliver frequency response.

Carbon Trust says the group is meeting an urgent need for an open forum where the wider industry can collaborate on energy storage.

In depth approach

Currently, similar work is being undertaken by National Grid’s Power Responsive Steering Group, which includes Centrica and DONG as well as a number of other DNOs and private firms, which was set up as a collaborative programme between business customers and the energy market to increase participation in demand side flexibility.

However, Lever told Clean Energy News that ESIP’s work would take a more in depth approach than National Grid’s current working group.

“We are a small group of seven versus [the] Power Responsive group of 100+, which means we can go into greater depth of analysis and take a broader systems view beyond the system operator’s scope. The group is also technology neutral and coming from the perspective of focusing on ‘how storage can bring down the cost [of] renewables’ instead of creating a market for storage,” he said.

The group will publish the key results of its work by the end of the year before deciding its next focus, which Lever said would be driven collectively by the group and may include “broader flexibility applications” across domestic, community, and commercial and industrial scale applications.

In the meantime, ESIP is open to other members who share the strategic objective of “taking a systems view when considering flexible solutions to bring down the cost of the future energy system”.

Read Next

March 4, 2022
The world’s largest combined lithium-vanadium battery energy storage system (BESS), the Energy Superhub Oxford (ESO), will soon start fully trading in the UK’s electricity market, showcasing the potential of hybrid assets.
February 2, 2022
Microsoft, Google and 10 other companies have joined the Long Duration Energy Storage (LDES) Council, a CEO-led organisation launched at COP26 in November to push for the global deployment of technologies that can store and discharge energy for eight hours or longer.
January 27, 2022
Canada-headquartered renewable energy project developer-owner Amp Energy is to build what it is claiming are Europe’s two largest grid-connected battery storage facilities, each of 400MW / 800MWh.
December 2, 2021
Prequalification results for the UK’s T-4 and T-1 Capacity Market auctions have been released, with battery storage rising significantly in both.
November 22, 2021
A new document outlines how Canada can reach its national goal of achieving net zero emissions by 2050, but only if the regulatory and policy landscape is radically altered to enable the massive buildout of wind, solar and energy storage. 

Most Popular

Email Newsletter