The latest energy storage plan report from the UK

Consultation on Long Duration Energy Storage Investment Plan by UK Government

The UK government has initiated a consultation on the proposed investment plan for Long Duration Energy Storage (LDES). The consultation outline includes upper and lower bound mechanisms, with lithium-ion batteries excluded from eligibility.

The consultation aims to promote long duration energy storage (LDES) technologies for the future energy system. Deploying 20 GW of LDES between 2030 and 2050 is estimated to save £24 billion ($30.5 billion) in the system.These figures underscore the substantial economic advantages and the significance of investing in LDES within the energy sector.

LCP Delta and Regen publish Long Duration Energy Storage consultation analysis

The “Long Duration Energy Storage Consultation Analysis” by LCP Delta and Regen was published on January 9th. It focuses on energy security and achieving Net Zero goals. The analysis provides a comprehensive assessment of various deployment scenarios for long duration energy storage, known as the “Scenario Deployment Analysis for Long Duration Energy Storage,” examining their impact on the energy system. Public feedback on the consultation is open until March 5th, 2024.

Designed and implemented in conjunction with the Review of Electricity Market Arrangements (REMA)

The long duration energy storage investment plan aligns with the Review of Electricity Market Arrangements (REMA), a comprehensive UK energy market reform. Its implementation aims to promote clean energy technology growth, ensuring stability and sustainability.

LDES defined as sustaining for 6 hours or longer, excluding lithium-ion batteries

Long duration energy storage is defined as a technology capable of sustaining power supply for 6 hours or longer, with lithium-ion batteries excluded from eligibility in this consultation.

Two schemes have been proposed by DESNZ, and projects can apply for the plan under either scheme. Scheme 1 will cover established technologies with a Technology Readiness Level (TRL) of 9, for projects of at least 100 MW/600 MWh. Scheme 2 will cover new technologies with a TRL of 8, with a minimum scale of 50 MW/300 MWh.

DESNZ proposes upper and lower bound mechanisms to overcome deployment barriers

DESNZ has proposed upper and lower bound mechanisms for LDES technologies to overcome existing deployment barriers. The main barrier is the lack of viable revenue streams for LDES applications, which fail to cover the required high investments.

To address this issue, the upper bound mechanism will ensure investor revenue above an agreed-upon lower limit, providing revenue certainty. The lower bound mechanism will restrict revenue to an agreed-upon upper limit, providing consumer protection.

Many LDES technologies are new and untested at large scale

The consultation aims to develop new long duration energy storage technologies and create favorable market conditions. Large-scale projects, including proven technologies like pumped hydro energy storage (PHES), have not been commissioned in the past four decades.

Technologies enabling flexible adjustment of demand and supply over longer durations needed as renewable energy grows

To achieve a sustainable energy future, flexible technologies are needed to balance supply and demand. Long duration energy storage can smooth output from renewable sources, addressing power system instability and energy transition challenges.

DESNZ believes excluding lithium-ion batteries is appropriate and recommends their ineligibility for new LDES schemes

DESNZ has proposed the exclusion of lithium-ion batteries in the consultation. They argue that lithium-ion batteries are already widely adopted in the market and have shorter storage durations, which do not align with the definition of LDES.

Therefore, they recommend that lithium-ion batteries should not be eligible for new LDES schemes.

6-hour duration considered a low starting point, but no consensus reached

There is no consensus reached regarding the duration of LDES in the consultation. Some argue that setting 6 hours as a starting point is reasonable as it already covers a significant portion of grid requirements.

However, others believe that a 6-hour duration is too low and should be extended to longer time ranges to address more complex supply-demand situations.

DESNZ’s consultation outlines several notable LDES technologies

DESNZ’s consultation outlines several notable LDES technologies, including pumped hydro energy storage, compressed air energy storage, thermal energy storage, and hydrogen storage.

These technologies hold potential in different application scenarios and can provide solutions for continuous power supply.

Drax operates a PHES project and supports the proposal

Drax, a UK energy company, operates a successful pumped hydro energy storage project and supports the proposed long duration energy storage investment plan. They believe it will foster clean energy technology development and enhance system flexibility and reliability.

REA welcomes the proposal for supporting long duration storage systems

The Renewable Energy Association (REA) welcomes the proposal forsupporting long duration storage systems in the UK. They emphasize the importance of these technologies in integrating renewable energy into the grid and ensuring a reliable and resilient energy system.The REA highlights the need for a diverse portfolio of storage technologies to cater to different use cases and optimize the overall energy system.

Public feedback and stakeholder engagement encouraged

The UK government encourages public feedback and stakeholder engagement during the consultation period. It seeks input from industry experts, technology developers, investors, and the general public to ensure a comprehensive and well-informed decision-making process. The feedback received will be considered in shaping the final investment plan for long duration energy storage.

Critics Argue Against Exclusion of Lithium-Ion Batteries

REA’s Policy Director, Frank Gordon, supports proposals incentivizing the benefits of long-duration energy storage.

Critics argue against excluding lithium-ion batteries due to their commercial viability for shorter durations and potential financial losses without meeting the 6-hour mark.

Some believe excluding lithium batteries hampers technological innovation and market development, considering their maturity, commercial viability, and widespread use in storage projects.

Conclusion: Positive response, controversy

Overall, the UK government’s consultation on long-term energy storage investment plans received a positive response. The program aims to drive the development of long-life energy storage technologies to support high levels of renewable energy penetration and provide system flexibility and reliability. However, there is still controversy surrounding the definition, duration and technical scope of long cycle energy storage (LDES). The outcome of the consultation will have a significant impact on future policy and investment decisions.

 

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