Scotland’s independent think tank
Scotland’s independent think tank

The potential of storage technology – Hannah Smith

Renewable energy technologies like solar, wind and hydro are Scotland’s largest source of electricity.

They provide more of our power than coal, gas and nuclear, and displace the equivalent of the emissions from every car, van, bus and train in our country every year.

But they could do so much more.

Demand for energy has always fluctuated throughout the day, month and year, and meeting those demands while using clean energy technologies to help tackle climate change means asking more and more of an energy system with its roots in the 1930s.

To add additional complexity, our energy system is changing.

We generate and consume energy differently. There are more players involved in our energy markets. Technology is making things smarter.

The challenge, then, is to create a more ‘flexible’ energy system, a shift which could be worth as much as £1.4 – 2.4bn per year by 2030.

Energy storage is just one source of flexibility that can help us. It involves using technologies to capture electricity or heat, when it’s generated, and release it when it’s needed.

Neither storage nor renewables are perfect on their own, but both can work together to produce a result far more powerful than the sum of their parts.

Imagine a scenario where solar power can be used at night, and where energy captured on a windy but mild day can heat our homes when the weather is calm and cold.

At a local level, household batteries like Tesla’s Powerwall can provide energy solutions for homes and businesses – for example storing daytime energy from solar panels to be used during dark winter evenings, when demand is highest, saving money on electricity which has to be bought in from the grid.

Not only does this mean renewables are used to their full potential; it also gives consumers better control and flexibility over how they manage their energy.

Large-scale battery storage could quickly become business-as-usual on our electricity grid, while more established technology, like hydro pumped storage, is eyeing a new future.

The Scottish Government’s Energy Strategy, currently being drafted, is likely to recognise the importance of energy storage.

And while Holyrood ponders the future, so does Westminster.

Energy regulator Ofgem and the Department of Business, Energy and Industrial Strategy opened a consultation on a ‘Smart, Flexible Energy System’ this month, and will now take time to look at how energy generation and storage will interact with developments like smart meters and electric vehicles.

The document contains almost 300 references to energy storage, and seeks to make sure policy and regulation make sure we get the most out of these technologies.

They include issues like connecting the technology to the network, charging owners for its use and how planning regulations will affect its spread (currently, the UK Government and devolved administrations “agree that a storage facility is a form of electricity generating station”, but that could change).

Scottish Renewables’ own analysis has highlighted areas which must be reformed if we are to make the most of the storage revolution.

A Scottish Renewables paper produced by consultancy Everoze in July highlighted more barriers to storage’s roll-out – and crucially suggested some fixes which could see them overcome.

The report makes a series of far-reaching recommendations to level the playing field for rapidly-developing energy storage technologies – some of which are locked out of current market arrangements.

And it tackles the primary risk holding back the roll-out of energy storage: securing a bankable revenue stream.

Recommendations include:

  • Ensuring contracts from National Grid for support services such as frequency response and fast reserve are provided over a longer period – which could encourage banks to get involved;
  • Unlocking new revenue opportunities within the distribution network, and;
  • Exploring the introduction of a ‘cap and floor’ mechanism for storage assets with long lifetimes including pumped storage hydropower.

Like much else in the energy system, the regulations which will allow energy storage to thrive must attempt to keep pace with the rapid advance of technology.

But while storage faces challenges, much is being done to ensure that it can play a fundamental role in our future energy system.

Hannah Smith is a Policy Manager at Scottish Renewables