A new report published earlier this month has claimed that over 9GWh of batter energy storage could be added to the UK’s grid system over the next five years. The report “UK Battery Storage: Opportunities & Market Entry Strategies for 2018-2022” from Solar Media Market Research states that the sector will experience “explosive growth” over the time period.
The report confirms that in the previous twelve months the potential amount of new battery storage projects via applications has risen by 240% with new project installations expected to rise from 2018 onwards by over 200% per year. The planned reduction of carbon emissions, the phase out of coal fired power stations, and the rise in renewable energy generation have all been cited as reasons for the rise in battery storage facilities.
Lauren Cook of Solar Media market research spoke with Energy Storage News at the publication of the report and she believes that the volume will help place the UK among the industry leaders.
“The market is growing and it’s changing rapidly. There’s now projects completed on the ground. Once global companies start to see it’s not just a speculative market, it will make sense for them to think about how to enter the market and what the opportunities are for them.
“They will then need to know who is active in the market, who has these opportunities and who they will have to work with to take advantage of those opportunities.”
Ms Cook also looked at business models as part of the research which she says is changing quickly. With long term revenues very much the focus of developers, emphasis is being placed on multiple revenue streams arising from a range of services leading to revenue stack. Ms Cook however does not think that a typical stack exists in today’s market.
“I’m not sure there’s any such thing as a typical stack because there are many factors involved, but if you look at the timeline from the EFR of 2016 you had those projects were successful, those projects then went on to apply for the Capacity Market (CM), T-1 and T-4 in early 2017,” Cook said.
“Some of those were successful, some of those weren’t. We then saw the FFR auctions happening throughout 2017. Those projects also participated in those auctions, new projects also came in.
“Then I think the most recent phase of the Capacity Market – so again, the T-1 and the T-4 – was just another opportunity to add to those stacks. So you might see projects with an EFR contract, they may also have a T-1, they may also look to get a T-4 in the future, because of the different lengths of contracts – you can simultaneously run some contracts but you may want to have consecutive CM contracts. So you might see T-1 as a way of filling the time between a project becoming operational and the T-4 contract beginning. It’s not just about stacking them in one moment – so having multiple sources at one point in time – it’s about stacking the revenue streams across the lifetime of the project and having long-term revenue.”
If the report is correct then the UK’s installed battery storage capacity by 2022 will be 50 times greater than it was in 2017. As mentioned above there are a number of factors which have led to the potential growth on battery storage with the increase in renewable energy generation being one of the most important.
The intermittent nature of the generation has created a need for viable storage solutions. As battery storage has become commercially attractive growth has followed. There are some issues surrounding grid – which is not a preserve of battery storage – as well as the longevity of the technology but that will improve and has already begun to do so.
However Forbes this week in a report of their own stated that although Energy Storage was well and truly on the way, a major cost reduction was needed to make it attractive to the larger scale amenity companies who would be able to develop larger scale developments.
Battery storage is therefore not without pitfalls however these are similar to what other new technologies in the energy generation industry went through in their embryonic stage and to a certain extent they are expected.
However we believe in a good energy mix and which should include other methods of storage including pumped hydro, thermal, and mechanical. With a range of different technologies we can ensure large quantities of renewable energy can be stored at one time helping reduce our carbon emissions and reducing our reliance on carbon based fuels.
You can purchase the report “UK Battery Storage: Opportunities & Market Entry Strategies for 2018-2022” from Solar Media Market Research here https://marketresearch.solarmedia.co.uk/products/uk-battery-storage-opportunities-market-entry-strategies-for-2018-2022