The renewables industry should be wary of thinking that there will be a support mechanism-fuelled “gold rush” on energy storage in the UK, according to the director of the Electricity Storage Network (ESN).
Next Energy News spoke to Anthony Price of ESN this week about the UK’s potential for storage. Price was among the speakers at the Solar Energy UK show which took place in Birmingham in mid-October. An all-day session on storage, taking place on the second day of the show, was well attended with a number speakers reporting that all the available seats were quickly taken.
However, discussions on storage have as yet not made an impression at the highest level, although the ESN was behind an event held at the Houses of Parliament in May this year. At that event, MP Alan Whitehead, head of All Party Parliamentary Renewable and Sustainable Energy Group (PRASEG) said storage could be like the “glue that holds electricity networks together”.
Price explained that while activity in the energy storage sector has picked up pace of late, outside the industry there is still a lack of clear understanding of what the technologies can achieve and what they might mean to the UK and the wider world.
“I think the industry generally has a tough challenge ahead of it because storage covers a whole range of topics. So the first challenge is to define what we mean.”
According to Price, he had been approached recently by a number of solar industry participants who were convinced the advent of storage might lead to a subsidy-driven financial windfall in an age of falling or degressing feed-in tariffs (FiTs). He was very quick to dismiss such notions.
“One of the things that I believe won’t happen is that we won’t have a storage gold rush. And anyone who sits around thinking: ‘There’s going to be a storage gold rush coming up and I need to position myself in storage,’ is likely to be disappointed. I can’t see that under the present or a future government’s financial constraints, they will find a way of offering a subsidy towards storage, which doesn’t over distort the market and is able to bring storage in, in the way that other renewables have come in.
“I’ve had numerous developers come up saying: ‘We want to invest in storage because it’s going to be the next best thing, and when the gold rush starts, we want to be there’. And I look at them and I say, ‘I think you need to be a bit wiser than that’”.
Solar industry veteran Ray Noble, who works with a range of organisations including the National Solar Centre and the Renewable Energy Agency, also spoke at Solar Energy UK’s storage sessions, acting as the chair. In Noble’s opinion, the possibilities offered to integrate greater capacity of renewable energy generation and protect grid infrastructure are starting to chime with the renewable energy industry’s needs, as well as with the wider community. He said recent conversations that he had, including at the show event, far surpassed his expectations.
“To be honest, it’s really positive, it was totally different to conversations a couple of years ago when the Distribution Network Operators (DNOs), the grid, just didn’t want to know renewables, never mind anything else. It’s suddenly like: ‘Hang on, storage being just round the corner, this is a benefit to the grid industry in any case, let alone for renewables.’ But if you put the two things together it’s a benefit to both.”
Price and Noble both asserted that successful testing in ‘real world’ scenarios, such as through projects sired by the Low Carbon Network Fund (LCNF), was a good way for establishing the feasibility and economic viability of storage. Noble also said that while DECC was taking the idea of energy storage far more seriously than before, with Britain facing a general election in May, it was unlikely any government ministers would be willing to take decisive action before then.
Noble pointed out however, that the timing of expected grid shortages could play a part in speeding up discussions after the election.
“What I believe needs to be done is, we need to do a lot of exercises like the ones that are going on through LCNF, to work out what are these scenarios [where storage could be used], what are these pricing points? Because immediately after the election they’re going to have a major problem obviously with shortage of supply, risk of brownouts and so on in the UK. So therefore you need to have all these points to know, as the price of electricity increases, when does storage become viable through various routes?”
Noble also pointed out that in terms of financing storage, various options included classifying storage as ‘plant & equipment’, which would make it eligible for tax breaks, or storage devices could be leased rather than sold.
“What’s been suggested is that it may be you can class storage as being ‘plant & equipment’ and therefore you could have it eligible for tax breaks, or enhanced capital allowances or something similar. Or it could operate in a similar way to what the motor industry are doing, where you don’t buy the storage device, you lease it over a long period of time. So you can buy an EV and you don’t have a battery, you lease the battery and it’s cheaper than what you would’ve been doing, putting petrol or diesel into a normal car.”