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March 2024

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Editorial comment

Last year, the UK’s electricity system under-utilised battery storage capacity. In the balancing mechanism, gas power plants provided 72% of capacity the Electricity System Operator (ESO) requested at short notice, with control rooms ‘skipping’ over battery storage at a rate of around 80% in some instances.1

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‘Skipping’ storage released an additional 70 000 t of carbon dioxide emissions – equivalent to the annual emissions of 44 000 petrol cars – compared to operating available storage instead. All while the UK grew battery storage capacity to 3.5 GWh in the same year.1

When the ESO faces a shortfall in supply, generators called on to plug the gap tend to offer more expensive, carbon-intensive forms of power, such as gas peaking plants – in contrast to cheaper, cleaner battery storage sites. Batteries typically charge up when the price is low (when there’s more renewable power on the grid) to discharge when the price is higher (and there’s less renewable generation).

Skipping suitable battery storage is a significant challenge to decarbonising the UK’s energy system.

Like curtailment (paying wind farms to switch off when there isn’t enough storage or grid infrastructure to manage output), it’s a flaw in our energy system’s design – the kind which leads to higher bills and emissions.

As the number of batteries connected to the grid has increased, the challenge facing the ESO has become integrating these smaller, flexible, more distributed assets into the centralised energy system. This presents an IT architecture upgrade problem that it must manage, while maintaining security of supply.

It’s taking the right steps forward. The launch of the Open Balancing Platform and proposed Grid Code changes aim to help the ESO increasingly dispatch batteries. They should offer batteries greater visibility across the country, including how long they can charge or discharge for (called ‘duration’) and what their existing state of charge is (important for knowing the value they provide when called).

As the ESO becomes the National Energy System Operator, greater resources (whether funding or talent) would help it deliver a more flexible electricity system, one where batteries can play a greater role in delivering a cheaper, greener and ever-reliable system.

There are still circumstances in the medium-term where the ESO continues deploying carbon-intensive energy. However, new tools, markets, and capabilities in the control room will provide the opportunity for batteries to play a bigger role in delivering a net zero power system by 2035.

Although skipping is gradually being resolved, curtailment remains one of the biggest challenges to the energy transition. Carbon Tracker warned that it could cost bill payers £3.5 billion a year by 2030 and generate 6.8 million t of avoidable carbon emissions.2

To tackle this growing issue, we have to better use the technology already available to us: energy storage.

Last year was the year of electricity grids, with vital reforms announced to accelerate new connections. While this could make it easier to bring new storage capacity online, 2024 needs to be the year the energy system adapts to fully enable batteries.

Powering the grid with renewables means we need battery storage. And we need batteries to be supported with market mechanisms that can reward them for reducing curtailment costs, enabling their financing at pace.

References

  1. ‘HOLNESS-MCKENZIE, S., ‘Balancing Mechanism: How deep is the market for battery energy storage?’, Modo Energy, (September 2023),https://modoenergy.com/research/10374
  2. ‘COP28,‘Britain wastes enough wind generation to power 1 million homes’, Carbon Tracker, (15 June 2023), https://carbontracker.org/britain-wastes-enough-wind-generation-to-power-1-million-homes/