Low Carbon Futures Imperial College

Business, Economics, Planning and Policy for Energy Storage in Low-Carbon Futures

Principal Investigator: Professor Richard Green

Researchers: Dr Joachim Geske, Professor Goran Strbac (Electrical and Electronic Engineering), Dr Michael Pollitt (University of Cambridge)

Funder: EPSRC

Duration: July 2014 – August 2017

Future changes in electricity supply and demand due to the technological changes required to decarbonise energy systems will lead to a great need for energy storage. We have previously estimated that the effective deployment of energy storage in the UK could reduce the cost of a low-carbon electricity system by £15 billion in 2030.

This project examined the larger scale deployment of energy storage and sought to resolve a number of key policy and business uncertainties. By improving our understanding of low-carbon markets, we can address the lack of adequate system planning tools to guide storage deployment. As a result, the research developed new techniques for whole-system planning, while creating new standards for distribution and transmission networks.

This project also considered the economic benefits of energy storage and developed models that calculate the value of their deployment and operation. It also assessed a range of potential business models which varied with the project’s location and characteristics, looking at incentives and development of other parts of the electricity system.

Finally, we evaluated policy options to support the optimal deployment of new energy storage technologies, drawing on experiences from other sectors and assessing whether countries are adopting the right incentives to cooperate across borders.

Key research questions: 

  • What policies are needed to ensure that storage can be economically viable when sensibly deployed and operated, and how would differing strategies from neighbouring countries affect intermittency?
  • Is there a business case for energy storage at present, and/or what needs to be done to create one? We will provide a quantified assessment of the contracts for electricity storage, inferring lessons from the experience of gas or agricultural commodities. We will study how the rules of the electricity market could affect the choices of storage and generation technology.
  • What are the more radical options to actively manage the distribution network as part of the broader smart grid? Much of the existing work on storage assumes that it might be used simply to postpone the “like for like” replacement of network assets that would otherwise be overloaded, but this project will consider whether that is the most efficient approach.

Research partners

  • Department of Energy and Climate Change
  • ON New Build and Technology Ltd
  • Energy Technologies Institute
  • Highview Power Storage
  • Isentropic Ltd
  • Electricity Storage Network Ltd
  • EDF Energy Plc
  • National Grid PLC
  • Alstom Grid Ltd
  • The Carbon Trust
  • Ofgem