Report on Role and Value of Energy Storage Systems in the UK

A new study entitled "Strategic Assessment of the Role and Value of Energy Storage Systems in the UK Low Carbon Energy Future" has been published by the Energy Futures Lab at Imperial College London

The Carbon Trust commissioned this study from the Energy Futures Lab at Imperial College London to address some of the key questions in relation to the future role of electricity storage in the UK: what are the cost targets and scale of deployment? What are the benefits of storage across different time scales and different sectors of the system (from real time operation to investment time scale, considering generation, transmission and distribution sectors)? What type of storage delivers the highest value and where should it be placed on the network?

Download the full Energy Storage Report (pdf)

The whole-systems cost minimisation approach of this study identifies significantly higher value to storage than previous studies by balancing and aggregating benefits across various sectors, including networks, generation capacity and system operation. Different types of storage fulfil different functions. Bulk and distributed storage are found to provide most value when placed in Scotland and Southern regions respectively. The former can support system balancing and “firm-up” wind generation, while the latter can also avoid distribution network reinforcements driven by electrification of heat and transport sectors. For example, in a 2050 high renewables scenario, application of energy storage technologies could potentially generate total system savings of £10bn/year.

Although scenarios with a high share or renewable generation are the most favourable for storage, even in predominantly nuclear scenarios, storage has a role to play. Large deployment of CCS, on the other hand, can reduce the scope for storage. Alternative technologies, such as flexible generation or interconnection are found to reduce the value of storage but do not displace its role, while demand side response is the most direct alternative to storage.

Operation patterns and duty cycles imposed on the energy storage technology are found to vary considerably, and it is likely that a portfolio of different energy storage technologies will be required, suited to a range of applications. Storage durations in excess of six hours yield little additional value, given the demand profile. Efficiency of storage has been found to affect the value modestly and only with higher levels of deployment efficiency becomes more relevant. We also demonstrate that changes in system management, including generation scheduling methodology and the improvements in wind output forecasting errors, may have a significant impact on the value of storage.

This analysis demonstrates that the value of energy storage technologies in low carbon energy systems with large contribution of renewable generation may be very significant; it will therefore be important to ensure that energy policy and market framework do not impose a barrier but rather facilitate the application of cost-effective energy storage technologies. The study shows that energy storage can bring benefits to several sectors in electricity industry, including generation, transmission and distribution, while providing services to support real-time balancing of demand and supply, network congestion management and reduce the need for investment in system reinforcement. These “split benefits” of storage pose challenges for policy makers to develop appropriate market mechanisms to ensure that the investors in storage are adequately rewarded for delivering these diverse sources of value. Further work is needed to understand how different market and policy frameworks would impact the deployment of alternative grid-scale energy storage technology solutions. Furthermore, this work should inform energy storage technology developments and related innovation policy in order to further reduce the cost of storage.

Download the full report.