Background
Electrical energy storage is increasingly recognised as a potential key enabling technology for application in electrical power systems – one where the UK possesses particular expertise in a number of areas. Whilst battery storage has been fundamental to the design of uninterruptible power supply (UPS) systems for many years, it is the new challenges brought about by the ascendancy of intermittent renewables resources (whilst continuing to maintain, if not improve, the quality and security of supply, against the continuing background of the maintenance and operation of economically efficient electricity networks) that has led to the recent renewed interest in the subject.
Within the UK context, the development and application of electrical energy storage systems and technologies therefore has the potential to contribute to the efficient operation of electricity networks whilst also contributing to the Government’s wider objectives in terms of accommodating an increasing amount of renewables generation onto the electricity network. There is also a range of associated opportunities for the UK technology and manufacturing base, which has the wider potential to contribute to the UK economy via the development of complementary manufacturing and wealth creation benefits.
The basis for the present DTI Global Watch Mission was developed following a series of storage related technology and applications studies commissioned by the DTI and following on from a previous mission to the USA in 2004 which specifically addressed electrochemical energy storage.
The mission
The mission was organised by EA Technology, with the participants comprising representatives from six UK organisations, in addition to EA Technology, namely ABB UK, Beta Research & Development, E.ON UK Power Technology, the University of Strathclyde, Yuasa Battery (UK) and the DTI Global Watch Service.
The participants engaged in dialogue with eight organisations in five states during the five working days of the mission, 4-8 December 2006. This dialogue covered various aspects of electrical energy storage related policy, funding, research and development (R&D), technology and applications aspects.
Aim and objectives
The mission’s aim was to review the current developmental status, market applicability and deployment of power utility related electrical energy storage systems in the USA, with the objective of developing UK interest in the various systems technologies and their applications potentials.
The overall aim of the mission was supported by a number of specific objectives, namely to:
- Review the status of electrical energy storage and its applications bases.
- Identify and benchmark examples of applications best practice.
- Engage in dialogue with specific technology developers and end users.
- Introduce the UK power utilities, power engineering and associated sectors to the current state-of-the-art and to develop their awareness of the business opportunities available.
- Facilitate and develop closer working relationships.
Key messages
The full set of conclusions drawn from the mission is presented in Chapter 9, the essence of these being as summarised below:
The market and applications drivers seen in the USA mirror those that are evident from a UK market perspective and include quality and security of supply, asset optimisation, frequency regulation, voltage support, arbitrage, load levelling, renewables integration and network resilience.
The principal policy drivers from a Federal Government perspective are related to quality and security of supply considerations, including those in relation to the wider perspective of enhancing overall network resilience, in the event of major extraneous disturbances.
The potential role and contribution of storage as a complementary technology to the development of intermittent renewable energy resources, in the context of system balancing requirements with consequential carbon emissions reduction benefits, does not appear to rank particularly highly from a federal policy perspective.
Particular utilities and states are however attaching significantly higher weightings to renewable energy related applications, including the potential contribution of storage as a complementary carbon mitigation technology.
Distribution asset capital deferral was identified as the major commercial driver from a power utility perspective, with transportable modular storage systems seen to be particularly attractive in such applications.
The financial and business cases for such asset deferral applications are moving towards acceptable levels of commercial viability, with their viabilities being further enhanced by the prospect of redeploying the storage system solutions during their planned service life.
The ability to exploit the full sets of financial benefits available from storage systems in the context of the broken value chains associated with non-vertically integrated utilities was identified as a particular market challenge. Responses identified included majoring on a limited number of value streams for any given application, the development of new business models and the full and comprehensive evaluation of all the benefits available.
A minority view was also heard to the effect that a storage technology is likely to be far easier to commercialise if its viability can be justified on such a single application, accessed via a series of single stakeholders, rather than trying to justify on multiple benefits involving multiple stakeholders.
The essential role of the project ‘champion’ is clearly recognised at this stage of storage systems market development, with schemes unlikely to proceed on straight financial or technical considerations alone.
The development and application of energy storage systems in the USA is aided by the stable and increasing levels of targeted funding available from the US Department of Energy (DOE) Energy Storage Program and its adjuncts.
It was noted that the UK has a credible storage technology base with specific and internationally recognised expertise and capabilities in battery storage, specific flow cell technologies, power conversion systems, balance-of-plant and overall systems integration.
This UK technology base provides the opportunity for UK developers and systems integrators to position themselves relative to specific applications needs and requirements in the US market.
One of the major differentiators observed between the US and UK storage systems perspectives is the emphasis on the development of applications and applications demonstration schemes in the US market.
Recommendations
The recommendations from the mission are presented in full in Chapter 10 and are summarised below. Specifically, the mission team recommends:
- Government should give serious consideration to the development and promulgation of a well-defined medium/longer term strategy for the deployment of electrical energy storage in the UK power utilities sector.
- As part of this strategy, significantly increased emphasis should be placed on the facilitation of a series of power utility related storage systems applications demonstrators in the UK.
- Government should also give serious consideration to the making available of dedicated funding, specifically to support the establishment of such applications demonstrations, in conjunction with further funding contributions from industry, power utilities and other associated stakeholders and agencies.
- The opportunities for storage systems to serve as a cost-effective alternative to traditional distribution asset upgrade and renewal should be assessed as an early priority in the UK context.
- Contingent upon a positive outcome from the above, the early demonstration of this application within the UK electricity industry, via a readily deployable and relocatable storage system, should be strongly encouraged and supported.
- Consideration should also be given to the applications demonstration of storage in the context of an intermittent renewables resource, in order to fully validate its contribution in terms of carbon mitigation.
- Further consideration should be given to the identification of appropriate complementary end-user customer applications for storage, particularly where they can be deployed as part of a cost-effective package of demandside measures.
- Government and the Office of Gas and Electricity Markets (Ofgem) should seek to identify and address specific market and regulatory failures, which serve to mitigate the uptake of storage within the UK power utilities sector, with consequential lost opportunities in terms of customer supply provision, economic efficiency and carbon mitigation.
- Appropriate support should be provided to develop the underlying UK storage technology base.
- Every effort should be made to engage with the UK power utilities sector, in terms of the full range of applications potential for energy storage, its technological status and applications experience to date.
- UK storage technology developers, manufacturers and systems integrators should seek to more fully engage with the US market in order to advantageously position themselves in relation to the market opportunities available.
- Serious consideration should be given to the possibility of the UK once again hosting the flagship Electrical Energy Storage Systems, Applications and Technologies (EESAT) conference in order to allow for a full exchange of experiences and views between key UK, US and other overseas stakeholders.