A new report published today will decode complex market opportunities for UK energy storage for the first time and explain what is key to driving cost-effective investment.
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 head-on the primary risk holding back the roll-out of energy storage: securing a bankable revenue stream.
The report’s publication comes a day before a National Grid tender for 200MW of ‘Enhanced Frequency Response’ closes – with 60 companies representing six times the advertised capacity having submitted applications, the vast majority for storage projects.
The document – Cracking the Code: A Guide to Energy Storage Revenue Streams and How to Derisk Them – was commissioned by Scottish Renewables from Everoze, with assistance from RES and the University of Strathclyde’s Power Networks Demonstration Centre.
- Longer contracts from National Grid for support services like frequency response and fast reserve – to help get banks on board
- Designing revenue streams to enable them to be ‘stacked’ together more easily, addressing ‘revenue interface risk’ and ensuring they line up technically, commercially and legally
- Unlocking new revenue opportunities within the distribution network
- Exploring the introduction of a ‘cap and floor’ mechanism for storage assets with long lifetimes – similar to the mechanism which already supports investment in connections to other countries.
- By pushing down revenue risk and the associated cost of finance, the emerging storage sector can help deliver the £2.4 billion of consumer savings previously highlighted by the Department of Energy and Climate Change, Scottish Government and others.
Jenny Hogan, Director of Policy at industry body Scottish Renewables, said: “Energy storage is an essential part of the transition to a cleaner energy mix, for delivering an energy system for the 21st century and for reaching our climate change targets.
“While batteries today are 94% cheaper than they were in 1990, and a range of pumped storage projects are ‘shovel-ready’ or in the planning process, the current market arrangements are at risk of favouring more expensive sources of flexibility for our network.
A whole series of changes are needed if we are to ensure that the cheapest and most efficient technologies provide the services that a modern clean electricity system requires.
“These range from ensuring that service contracts are procured in a way that supports investment in low-cost technologies, through to encouraging aggregators to ensure that people already deploying in storage in their homes are able to realise the full benefits it can bring.”
Felicity Jones, Partner at Everoze, told how reducing investment risk was key to the success of the growing storage sector.
She said: “If the overwhelming challenge for the solar and wind sector has been cost reduction, the key challenge for storage is getting financiers comfortable with the merchant risk of revenue streams.
“Yes, continued reduction in the capital cost of storage is needed, but the bigger challenge lies elsewhere. Renewables developers eyeing up storage must flip their attention from cost to the other half of the profit formula: revenue.”
Like our Facebook Page
Can You Maximize Your Profits While Investing Ethically?
Environmental Benefits of Living in Miami. Why Is It Worth Moving There?
5 Ways To Shift To Green Energy At Home
Advantages of Free-Range Farming for Eco-Friendly Consumers
What is Eco-Friendly Investing and How Can You Embrace It?
Green Software Ideas to Implement with an Offshore Development Team
5 Things Eco-Conscious Consumers Should Know About Private Wells
The True Environmental and Social Costs of Mined Diamonds
20 Incredible Facts Eco-Tourists Should Know About Dubai
5 Massive Benefits of Turning to Renewable Energy
6 Tips For Getting the Most from a Solar-Powered Home
7 Excellent Ways to Live a Greener Lifestyle in 2021
Sustainability in Construction: Methods to Mitigate Environmental Impacts
How the Property Industry Is Embracing Eco-Friendliness Across the Board
10 Tips to Turn Your Next Holiday into an Eco-Friendly Celebration
New Company is Driving ESG Infrastructure Development in Mining
4 Benefits of Commuting with a Bicycle as an Eco-Friendly Consumer
Some Important Facts about Eco-Friendly Glass Railings
Impact Proof of Stake Ethereum Mining on Power Industry Sustainability
7 Business Survival Guidelines All Eco-Friendly Entrepreneurs Must Follow
- Features12 months ago
Eco-Friendly Interior Design Is Easier Than You Might Think
- Features10 months ago
Eco-Friendly Hacks To Create A Durable Shop For Your Home
- Energy6 months ago
Eco-Friendly Homeowners Lower Carbon Footprints through Greater Air Conditioner Efficiency
- Features10 months ago
5 Simple Ways To Create A Greener And Healthier Home