Posted on: 30/08/2016
The results of National Grid’s first Enhanced Frequency Response (EFR) auction have been hailed as evidence the UK’s battery storage sector is now “ready to deliver”.
The EFR initiative, under which National Grid has procured an initial 200MW, aims to support the decarbonisation of the energy industry by providing a fast response solution to system volatility.
Bids to take part were received from 37 providers, the majority of which were from battery assets, and of these eight were accepted at an average price of £9.78/MW. Firms including Vattenfall and EDF Energy Renewables were among those successful in the auction.
Contracts have been awarded on a four year term which National Grid said gave providers “the certainty that they need to develop this technology”.
National Grid’s UK system operator director Cordi O’Hara said: “We are constantly looking to the future to understand how we can make the most of the energy available to us.
“This project is at the very core of our Power Responsive work, to balance the Grid by the most efficient means possible, saving money and energy.”
‘Beginning of exciting new chapter’
RenewableUK’s Deputy Chief Executive Maf Smith said: “These awards show that we can work with industry to bring forward new technology and I believe storage has much to contribute to the flexible energy system of tomorrow. This is the beginning of an exciting new chapter for the industry.”
Renewable Energy Association head of policy and external affairs James Court said: “The conclusion of the EFR auction shows that storage is now ready to deliver, and with the right framework can provide vital services to UK Plc. National Grid deserve credit for kick-starting this market and the Government must now follow through with its pledge to remove barriers to the industry.
“In 2012 energy storage was identified as one of eight great industries the UK could lead the world in. The industry is starting to deliver on this promise, with the right support in place we can go even further.
“It is yet another example of new technologies that can provide alternatives to Hinkley for cost effective, low carbon electricity.”
A report by SmartestEnergy earlier this month called for the National Grid to provide more certainty on future frequency response capacity in order to drive the emerging energy storage sector.
It consulted 45 battery storage innovators in the lead up to the first Enhanced Frequency Response auction to explore the barriers they face to commercialisation.
Robert Owens, Vice President Demand Side Management at SmartestEnergy said:
“The end of the first EFR auction is a real milestone for the UK battery storage sector. The successful bids are certainly at lower prices than we anticipated and we will watch these projects with interest to see how they demonstrate their commercial promise.
"While it is great news that these innovators will be able to support the ‘smart power revolution’, there are still many more of these entrepreneurs out there ready to develop battery storage projects, so we hope that National Grid will continue the momentum by announcing details of future auctions.”
Global battery storage predicted to rise sharply
Meanwhile, a report has predicted that the total capacity of the world’s energy storage batteries will rise from 1.5GW in 2015 to more than 14GW by 2020.
Consultancy firm GlobalData said that introducing battery storage within the power sector could help to solve a range of problems, including renewable capacity continuity, transmission congestions relief and energy tariff cost management.
Load following and frequency regulation – which involve balancing electric supply and end-user demand – could also be aided by storing energy.
The cost of energy storage is expected to almost halve between 2015 and 2020 thanks to technological innovation, improvement in manufacturing processes and growing competition.
The United States has the largest market energy storage market, valued at more than $750 million (£571m) in 2015.
The US is expected to continue to lead the market over the next five years, reaching a market value of around $1.7 billion by 2020.
> Download the report