A report commissioned by Scottish Renewables has revealed that energy storage in the UK can help deliver £2.4bn of consumer savings if existing market arrangements are adjusted.
The report titled – Cracking the Code: A Guide to Energy Storage Revenue Streams and How to Derisk Them, makes a series of recommendations to level the playing field for rapidly-developing energy storage technologies.
The recommendations include longer contracts from National Grid for support services such as frequency response and fast reserve to enhance bankability, unlocking new revenue opportunities within the distribution network, and exploring the introduction of a ‘cap and floor’ mechanism for storage assets with long lifetimes.
Publication of the report comes a day before the National Grid’s tender for 200MW of Enhanced Frequency Response closes with about 60 companies representing six times the advertised capacity have submitted applications, where majority of the tenders are for energy storage products.
According to the report, by pushing down revenue risk and the associated cost of finance, the emerging energy storage sector can help in delivering about £2.4bn in consumer savings as highlighted by the Department of Energy and Climate Change, Scottish Government and others.
Scottish Renewables director of policy Jenny Hogan said: “Energy storage is an essential part of the transition to a cleaner energy mix, for delivering an energy system for the 21st century and for reaching our climate change targets.
“While batteries today are 94% cheaper than they were in 1990, and a range of pumped storage projects are ‘shovel-ready’ or in the planning process, the current market arrangements are at risk of favouring more expensive sources of flexibility for our network.
“A whole series of changes are needed if we are to ensure that the cheapest and most efficient technologies provide the services that a modern clean electricity system requires."
Scottish Renewables commissioned the report from Everoze, with support from RES and the University of Strathclyde’s Power Networks Demonstration Centre.