UK Battery Storage Pipeline Doubles to 4.9GW in 2018
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In the second of our three-part series covering the highlights of the 2019 Energy Entrepreneurs Report, Head of Markets for Asset Optimisation, Boz Bozhkov explores the findings for battery storage, and how the emerging market is already developing.

During the past year, the amount of capacity in the development pipeline for battery storage in the UK has doubled to 4.9GW.

2018 also saw a change in the ownership pattern for battery storage projects, with investors, such as the Gore Street Energy Storage Fund, buying newly developed battery storage projects from developers.

The involvement of these sophisticated investors demonstrates a growing level of confidence that fund managers have in the technology to deliver long-term returns.

However, there are still regulatory, technology and market hurdles to clear before we see a mass uptake of energy storage. Thankfully, there are growing signs those barriers are just beginning to come down.

Last year, National Grid issued guidance on co-locating energy storage and generation facilities on the same site. The Department for Business, Energy and Industrial Strategy (BEIS) also consulted at the beginning of 2019 on on plans to let local councils take planning decisions for all sizes of battery storage projects - instead of restricting decisions on schemes of more than 50MW in capacity to the Nationally Significant Infrastructure Projects regime - in the hope that this could speed up the development of storage projects.

There was 314MW of battery storage capacity operating in Great Britain by the end of 2018, with 83MW co-located alongside electricity generation. Fossil fuel plants currently have 59MW of storage capacity, while renewable energy projects have 24MW, spread between both onshore and offshore wind farms, as well as solar photovoltaic sites.

36% of the battery storage projects in the planning system are in Scotland, with developers looking to take advantage of the nation’s large number of onshore wind farms, as well as other technologies such as anaerobic digestors, run-of-river hydro-electric schemes, solar farms, and offshore wind farms.

Co-location with storage could yet open up opportunities to harness additional revenue streams, including supporting the grid by offering ancillary services such as frequency response or balancing. Analysts have also highlighted a lower levelised cost of electricity (LCOE) from co-located assets, hypothetically making such sites more competitive in a subsidy-free market.

Yet co-location isn’t simply about installing batteries on renewables sites. Instead, co-location (when economically viable) could create an opportunity to cut installation costs, as well as offer a greater return on grid connection costs. Co-location can also include flexible assets beyond the traditional idea of battery storage, such as hydrogen fuel cells or gas peakers.

Overall then, the business case for both stand-alone and co-located storage remains challenging. However, the tail-winds behind this technology continue to improve, ensuring that this is an area which requires continues monitoring.

To find out more about battery storage deployment and how the market is developing, download our 2019 Energy Entrepreneurs Report.

Make sure to read our last installment of this blog series too, which will cover how project developers are now investing in gas peaking plant in order to complement existing renewable and storage assets.

 

About the author

Bozhidar is responsible for analysing market opportunities to help asset owners maximise revenues. His role includes the continued development of processes and systems to enable customers to always optimise their positions and he also liaises with National Grid and DNOs to ensure access to all relevant opportunities. Bozhidar joined SmartestEnergy from KiWi Power where he was Head of UK Operations. He holds a Bachelor of Business Administration from Northeastern University, USA and a Master of Science in Economics and Policy of Energy and the Environment from University College London.

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