Empowering tomorrow: UK energy storage ready to plug-in
With new investment approaches and better grid integration, Alan Greenshields believes Britain is ready to plug-in a brighter future for battery infrastructure.
Earlier this year, the UK Department for Energy Security and Net Zero conducted a consultation on Long Duration Energy Storage (LDES). The consultation included proposals that aim to encourage investment in LDES technology and, in turn, increase deployment of a technology that will play a crucial role in decarbonising the energy sector.
LDES, as defined by OfGEM, has the capability to store and discharge over six hours of electricity. With large quantities of LDES deployed on the grid, renewable energy resources will be able to become baseload energy resources, effectively replacing existing coal and gas generators.
Encouraging investment
Accelerating the transition to renewables will require significant investment. However, this will only be possible after the marketplace is clearly defined, enabling industry to make informed investment decisions. Fortunately, there are a number of mechanisms under discussion that would create the kind of structure required to accelerate investment and clean energy deployment.
Through the recent LDES consultation, the government detailed a “cap and floor” mechanism to make LDES projects financeable. A price floor on transacted energy ensures that generators receive a minimum return on their investment and supports the adoption of newer technologies earlier in their cost-reduction curve. The cap ensures that taxpayers share in the benefit from projects if surplus profits are generated.
The introduction of a cap and floor mechanism will help to attract private capital for projects that use earlier stage technologies, which may be perceived as higher risk. This will be critical to accelerate deployment of LDES. While now almost universally recognised as essential for decarbonisation, LDES technologies are still relatively new. However, we cannot afford to wait decades for the slow scale-up of the new technologies we need, hence the advantage of cap and floor to encourage technologies to quickly compete, scale and drive down cost.
LDES: linchpin to decarbonisation
Existing grid infrastructure was built to accommodate large, centralised generating stations and relatively predictable residential and light commercial energy demands. However, with the ongoing transition towards electrification and renewable energy, there is a pressing need for the outdated grid infrastructure to accommodate intermittent wind and solar power – and that will require innovative new LDES technologies. Energy companies worldwide are seeing the value in these new technologies.
The UK is not alone in prioritising LDES. German energy company Lausitz Energie Verwaltungs Gmbh [LEAG] has unveiled plans to convert the former site of a coal-fired power station in Eastern Germany into a renewable energy hub. In addition to up to 14 GW of renewables, the facility will integrate up to 3 GWh of storage. The first phase of that project foresees a 50 MW/500 MWh iron flow battery system being installed within a few years. Iron flow battery technology is a form of LDES which has been commercialized by ESS Inc.
This LDES system will enable the hub to provide green baseload energy, effectively replacing coal-fired infrastructure with carbon-free resources. In a parallel development, the Stanwell Corporation in Australia, in collaboration with Energy Storage Industries Asia Pacific and ESS, is leading a similar initiative to convert a coal-fired power plant into a state-of-the-art renewable energy hub. This endeavour will initially feature a 1 MW/10 MWh iron flow battery pilot project, with a 150 MW iron flow battery installation by the end of the decade.
These initiatives exemplify how LDES solutions can facilitate the transition from fossil fuels to renewable energy, help meet net-zero targets and bolster energy security. The LDES consultation and its proposals to introduce a cap and floor scheme will undoubtedly attract investment into renewables.
Cap and floor models have a strong track record in the UK, with the Carbon Price Support mechanism introduced on 1 April 2013 and leading to a substantial reduction in electricity generated from coal, which fell by 93% from a monthly average of 13.1 TWh in 2013 to only 0.97 TWh in 2019 according to Ofgem.
The UK became the first major economy to halve carbon emissions between 1990 and 2022. Throughout 2023, zero-carbon power sources in the country’s electricity mix consistently outperformed traditional fossil fuel generation for the first time. The UK’s stance on energy storage will not only continue progress to decarbonise the power sector but could also place the UK at the forefront of renewable energy in Europe.
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Image: Ricardo Gomez Angel