Category: News

Scottish Power proposes de-rating for UK demand side response

Vertically integrated energy company Scottish Power has submitted a proposal to extend recently introduced battery de-rating factors in Britain’s Capacity Market to storage included in demand side response bids in what has been described as a latest attack on the battery market.

The utility submitted the proposal on 13 March, which would create DSR technology classes with different minimum durations, and apply the extended performance testing to these newly created groups.

Among these would be a ‘Storage DSR’ class, which National Grid’s electricity market reform delivery body would be obligated to consult on applying the lower de-rating factors to.

Scottish Power argues that under current market rules if a DSR CMU (Capacity Market Unit – “a unit of electricity generation capacity or electricity demand reduction that can then be put forward in a future Capacity Market auction” according to the government definition), consisting of energy storage, is located behind the meter (BTM) it will not be subject to duration de-rating.

“This risks over-rewarding such storage and increasing costs to consumers. It is also contrary to the CM policy of technology neutrality and unfair to other market participants,” the company stated.

It adds that without such a change, storage developers are able to bypass the extended performance tests which are applied to capacity storage generating technology classes by going behind the meter.

The proposal suggests that each applicant for an unproven DSR CMU “must include details of any known intention to use a generating unit that is categorised as a DSR storage technology class”, a suggestion that has been refuted by those offering behind the meter battery services for DSR.

Setting ‘a dangerous precedent’ for DSR

“It’s a bit of a non-starter because the whole point of DSR is that it is there for any flexibility assets,” Johnathan Ainley, head of public affairs & UK programme manager at aggregator KiWi Power, told our UK sister site Clean Energy News.

“When you’re bidding with unproven DSR CMU the whole point of it is that you don’t necessarily know what the composition of that CMU is going to be at the time that you’re going to bid it in. How can they possibly apply a different de-rating factor to a portion of that CMU?”

“In terms of this proposal it’s not one we would support at all. I think it could potentially set a dangerous precedent more generally around DSR,” he added.

Origami Energy, another aggregator which won contracts in both the recent auctions using DSR without storage included, said if the proposal was enacted, it would reconsider the use of battery storage for DSR in the capacity market in the future.

“We do behind the meter storage development and we were expecting to be able at some stage to put some storage assets into DSR capacity market contracts. We’d need to look again at the economics, it’s certainly a detrimental impact on a purely financial basis as it was for the new build which at the time of pre-qualification was attracting the fuller de-rating,” said Nick Heyward, head of energy storage at Origami.

Scottish Power has defended its proposal by claiming it would merely extend the decision to cut de-rating of battery projects by as much as 80% in the recent CM auctions depending on their discharge duration.

A spokesperson for the company told CEN: “Generally speaking, we think that the same duration de-rating should apply to batteries whether they are behind or in front of the meter. In the longer term, if other forms of DSR can only deliver for periods less than that of a typical system stress event, then it should be de-rated accordingly so as to ensure that security of supply is maintained.”

Heyward added that while the move would be detrimental to energy storage and getting them financed, it would fall in line with the original intentions of the CM to secure security of supply.

“At the time a lot of this legislation got put in place, there was no such thing as energy storage on a commercial scale so all of these mechanisms and rules around the CM, and it’s very similar in the ancillary services market, are designed with generation in mind.

“So a lot of these tweaks and policy changes are starting to correct that and the unfortunate thing to date is actually quite a few of those have been corrections that are detrimental to storage,” he said.

However, the decision to cut these factors for large scale in front of the meter batteries from the government and Ofgem was largely seen as a response to industry pressure from incumbents using competing technologies.

Following the decision, many have viewed the business case and certainty offered by a 15 year contract within the T-4 auctions as under threat from reduced revenues.

However, DSR is only able to secure one year contracts in the CM and so Scottish Power’s proposal to effectively pursue cuts to available revenues for storage acting as DSR may only impact a small amount of the entire revenue stack of a behind the meter storage facility.

Moving beyond the Capacity Market

Flexitricity, which won several one-year contracts in both the T-1 and T-1 auctions held in January, told CEN that opportunities for greater revenues lie outside of the CM mechanism.

Chief executive Ron Ramage said: “The DSR community will continue to make a significant contribution towards the security of supply.

“Whilst we recognise the importance of secure bankable revenue streams, it should be recognised that DSR can only secure a one-year Capacity Market Agreement at auction and the total income is a relatively small part of the revenue stack available for these assets. Battery storage as a technology is flexible and can access far more valuable revenue streams than the Capacity Market, with dynamic frequency response and DUoS/TNUoS avoidance amongst the mainstream options.”

Having recently secured a gas and electricity supply licence, promising to unlock revenues within the Balancing Mechanism, Ramage added: “There is also a significant opportunity for these assets to be traded in the Balancing Mechanism, securing revenues post-gate closure; you may remember that the ‘Beast from the East’ (recent severe cold weather snap) led to Balancing Mechanism prices that reached £900/MWh (US$1264.6/MWh); there is no reason why behind-the-meter storage can’t participate here, it’s just a question of market access, something that Flexitricity will be able to provide from this autumn.”

Heyward added that there was “definitely a possibility” that storage developers could move away from the CM if revenues continue to be cut.

“For the new build assets where those de-rating factors already applied, it became such an insignificant part that actually your pricing behaviour in the auction becomes a bit irrational because it barely moves the needle. So I think the same could happen.

“There’s quite a big administrative and legal overhead in just going through the CM process and certainly for a one year contract if it did have such limited value I would question whether people would even go to the effort of going through the process if it was the same level of de-rating,” he said.

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Three major risks hold UK battery storage back from reaching potential, expert panel says

Mis-selling, insurance risk and the failure of associated costs to fall alongside sell prices could hold back greater battery storage deployment in Britain, a panel discussion has revealed.

Last week’s Energy Storage Summit in London, England, organised by our publisher Solar Media, brought together more than 350 representatives from the battery storage industry.

The opening day of the conference saw discussions on different deployment and co-location strategies and, in particular, what has been preventing more battery storage projects from being realised.  

Steve Shine, chairman at energy efficiency solutions company Anesco, which has deployed a number of co-located or combined solar and storage sites and recently developed the UK’s first ‘subsidy-free’ solar farm at Clayhill, said that one issue that was currently preventing greater deployment of battery storage was the failure of associated costs to fall in line with technology costs.

While battery technology sell prices have declined sharply, Shine said this was not being supported by similar reductions in other costs associated with battery deployment, such as accompanying components like switchgears and labour costs. Shine remarked that the core battery components are now “not even one-third” of the total development cost in some projects.

The most recent Lazard Levelised Cost of Storage Analysis from November last year forecast that lithium-ion capital costs could fall by 36% over the next five years, but warned that further cost reduction efforts should be focused on balance of system, components and other costs such as planning and permitting.  

Talk amongst the panel quickly turned to the potential of mis-selling storage or incorrectly explaining system capabilities, something which there is a “huge opportunity” for in the industry’s early days, Matt Allen, chief executive at C&I storage developer Become Energy, said.

The mis-selling of storage, particularly in the context of residential systems, has been discussed at length. Last April the UK’s Renewable Energy Consumer Code (RECC), a quality assurance group set up by the national Renewable Energy Association (REA), revealed it was receiving around one consumer complaint surrounding battery storage each week and there are fears this number will grow in tandem with the market.

Allen said there was particular risk of battery storage systems being proposed with uninterrupted power supply (UPS) capabilities factored in for systems not suited or incapable of providing such power. He feared that “all it would take” would be for one incident involving a hospital relying on an inaccurately sold battery storage facility to provide UPS in the event of a blackout or power failure –an event that would “put lives at risk” – for the battery storage sector to be set back years.

It drew other members of the panel to discuss further and continuing problems convincing insurance companies to cover battery storage technologies.

Harry Vickers at Camborne Capital, a financier-turned project developer which installed the UK’s first 500kWh Tesla Powerpack, now providing frequency regulation and other services, remarked that insurance companies are still reticent to back battery storage following a widely recognised incident involving a lithium-ion battery at the Kahuku wind farm in Hawaii more than five years ago.

The 30MW wind farm was combined with a 15MW battery before it developed a fault, triggering a fire that was estimated to cause more than US$30 million worth of damage. Firefighters did not combat the fire until seven hours after the incident started due to concerns surrounding how to combat a fire involving the energy-dense technologies.

Such concerns have been popularised by problems Samsung experienced with its Galaxy Note 7 smartphone, a product line which was discontinued after just two weeks following numerous reports of battery fires, while a 2013 fire incident set back the rollout of Boeing’s 787 ‘Dreamliner’ in another high profile case.

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‘Devil is in the detail’: US wholesale markets open up but remain complex

The “devil is in the detail” when it comes to making regulatory changes in the US to open up wholesale markets for energy storage to participate in, a regional chief of regulator FERC has said.

In mid-February, FERC (Federal Energy Regulatory Commission), issued Order no.841, a Final Rule on a Notice of Proposed Rulemaking (NOPR) which was first tabled in late 2016. It ordered US regional transmission organisations (RTOs) and independent system operators (ISOs) – the operators of the US’ transmission grids – to explain in the coming months how they would reconfigure wholesale markets to accommodate energy storage resources in providing capacity, energy and ancillary services.

The rule has been commented on by trade groups as a positive step, with the Energy Storage Association’s policy director Jason Burwen, having been among contributors to the regulator’s information-gathering and consultation process.

RTOs and ISOs have about a year to issue their plans. At last week’s Energy Storage Summit, which took place in London, Nancy Bowler, a branch chief at FERC, spoke briefly about the wholesale market ruling.

According to Bowler, US energy markets are divided up between not just the Federal and state level but also between wholesale and retail. The rule is an attempt to bring the two worlds closer together, opening up the opportunity for energy storage to provide capacity resources, trade energy or provide ancillary services including frequency response. The regulator also created a definition of energy storage as it relates to the electricity network.

“In the FERC Order we defined storage as a resource capable of receiving electric energy from the grid and storing it for later injection of electric energy back into the grid and this is going to be technology agnostic, it could be located on the transmission system, meaning the wholesale market, but also the distribution system and behind-the-meter,” FERC’s Nancy Bowler said onstage at the London event.

“We put out this rulemaking and these six regional organisations in the US have to come back with actual tariff language that adheres to the sort of broad-based parameters that we’ve put in place,” Bowler said, explaining that the six main RTOs cover about two-thirds of the US.

According to Bowler, the opening up of those three market areas, capacity, energy and ancillary services “really expands the place where storage can play in the US, pretty dramatically”.

Five-minute pricing

A key component of the rulemaking is that existing hourly real-time energy markets will incorporate five-minute pricing, balancing and settling the markets on a five-minute basis, something Bowler said would add a lot of granularity and visibility to the market.

“Up until now most of the value [of energy storage] has been in frequency regulation but energy arbitrage could potentially become a bigger deal, now you have this five minute pricing, more granular pricing that’s taking place,” Bowler said, adding that a recent MIT study found energy arbitrage in hourly markets with five-minute pricing could triple the value energy storage resources could provide.

Another panellist at the London event, a representative of UK aggregator Limejump said that such a scheme for pricing could give big generators incentives to manage their own frequency or balance their energy trading. Rob Sherwood, who is Limejump’s head of trading, said a five-minute rule in the UK could create “a much bigger market and much wider value”. From a technical standpoint, Sherwood said implementing this would merely be a question of creating a “suitable algorithm that could sort it out quite quickly”.  

Indeed, in April last year, the Australian Energy Market Commission (AEMC), which is responsible for rulemaking and market development in the National Electricity Market (NEM) covering eastern and southern Australia, said it is also considering a move to five-minute settlement.

According to Bowler, FERC itself came to something of an impasse on the question of allowing distributed and behind-the-meter (BTM) resources to play into those wholesale markets. Bowler said this part of the Order 841 rulemaking process had been tricky.

“That last piece, where we’re going to allow storage behind-the-meter and on the distribution system to participate in wholesale markets is going to be particularly difficult. As part of this rulemaking we were originally going to issue something on aggregated distributed energy resources, but we’ve kicked the can down the road and we’re going to have a technical session in early April to discuss how we might also allow those type of assets to participate in wholesale markets.”

On a regional level, the likes of California’s CAISO has started programmes to procure distributed and aggregated BTM resources like energy storage and demand side response, although this is on a small-scale and at its early stages.

Brattle Group puts numbers on value

A recent report from consultancy firm Brattle Group said half the total value of energy storage could come from the wholesale market, if Order 841 and other moves that remove barriers to wholesale market participation for energy storage continue as planned.

“FERC’s order is an important step in unlocking the value in wholesale energy, ancillary services, and capacity markets,” the group said.

“However, to fully realize the value of electricity storage, including benefits related to reduced T&D costs and reduced customer outages, the FERC wholesale market reforms will have to be matched with similar efforts at the state regulatory level.”

The combination of state and national efforts to capture all possible value streams, Brattle Group wrote, could increase the market value of energy storage three to five times over.

FERC’s Nancy Bowler concluded her appearance in London with an assertion of how transformative she believed the new rules could be.

“I’m very bullish on these markets,” Bowler said.

“There’s a lot of momentum in the right direction and maybe there’ll be some opportunities to bundle up some of these assets and trade around them for an enterprising person. The devil is in the details and how we develop these rules and tariffs and the details of it are going to be very important in making sure these markets form in the right way.”
   

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Trio of risks holding back battery storage, panel says

Mis-selling, insurance risk and the failure of associated costs to fall alongside sell prices could hold back greater battery storage deployment, a panel discussion has revealed.

Last week’s Energy Storage Summit, organised by Solar Power Portal publisher Solar Media, brought together more than 350 representatives from the battery storage industry.

The opening day of the conference saw discussions on different deployment and co-location strategies and, in particular, what has been preventing more battery storage projects from being realised.  

Steve Shine, chairman at Anesco, said that one issue that was currently preventing greater deployment of battery storage was the failure of associated costs to fall in line with technology costs.

While battery technology sell prices have declined sharply, Shine said this was not being supported by similar reductions in other costs associated with battery deployment, such as accompanying components like switchgears and labour costs. Shine remarked that the core battery components are now “not even one-third” of the total development cost in some projects.

The most recent Lazard Levelised Cost of Storage Analysis from November last year forecast that lithium-ion capital costs could fall by 36% over the next five years, but warned that further cost reduction efforts should be focused on balance of system, components and other costs such as planning and permitting.  

Talk amongst the panel quickly turned to the potential of mis-selling storage or incorrectly explaining system capabilities, something which there is a “huge opportunity” for in the industry’s early days, Matt Allen, chief executive at C&I storage developer Become Energy, said.

The mis-selling of storage, particularly in the context of residential systems, has been discussed at length. Last April the Renewable Energy Consumer Code (RECC) revealed it was receiving around one consumer complaint surrounding battery storage each week and there are fears this number will grow in tandem with the market.

Allen said there was particular risk of battery storage systems being proposed with uninterrupted power supply (UPS) capabilities factored in for systems not suited or incapable of providing such power. He feared that “all it would take” would be for one incident involving a hospital relying on an inaccurately sold battery storage facility to provide UPS in the event of a blackout or power failure –an event that would “put lives at risk” – for the battery storage sector to be set back years.

It drew other members of the panel to discuss further and continuing problems convincing insurance companies to cover battery storage technologies.

Camborne’s Harry Vickers remarked that insurance companies are still reticent to back battery storage following a widely recognised incident involving a lithium-ion battery at the Kahuku wind farm in Hawaii more than five years ago.

The 30MW wind farm was combined with a 15MW battery before it developed a fault, triggering a fire that was estimated to cause more than US$30 million worth of damage. Firefighters did not combat the fire until seven hours after the incident started due to concerns surrounding how to combat a fire involving the energy-dense technologies.

Such concerns have been popularised by problems Samsung experienced with its Galaxy Note 7 smartphone, a product line which was discontinued after just two weeks following numerous reports of battery fires.

Read the entire story

UK solar and storage revenue model ‘stacking up’

The economics of solar-and-storage in the UK are being proven, according to Anesco, the developer of one such project.

Speaking at the Energy Storage Summit in London, Steve Shine, Anesco’s chairman, explained that while the company had not proven the case for subsidy-free solar, the business model for its hybrid Clay Hill project was panning out.

“Solar by itself does not pay,” he said stressing that Clay Hill was a hybrid project. “The revenue model is stacking up well and now are going to grow that and prove at a number of other sites.

“At Clay Hill we designed it to keep the capital cost as low as possible and to keep the operational cost as low as possible for the next 20 years,” he added.

Shine also acknowledged that solar’s push to subsidy-free status had been hindered by PV module prices increasing through 2017, that was likely to change after the recent introduction of trade tariffs in the US.

Mark Henderson, CIO at GRIDSERVE, stressed that it was important to discern between new-build and retro-fitted co-location.

“On the financial side, when we talk about co-location we are talking about new builds together, not fitting storage to existing generation sites. That is fine from a technical perspective, but financially, unless you are going to get the same financier to finance the new one [it’s difficult],” he said.

“Either it’s going to be on an equity-only basis or it is going to be really difficult to move forward. How do you share the grid connection for example? Who goes first? If they’re being financed all at the same time it is a lot easier,” he added.

This story first appeared on our sister site Energy-Storage.News. The Energy Storage Summit is organised by PV Tech’s publisher Solar Media.

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Finance, tech, AI and manufacturing: Trade groups talk about 2018’s most exciting developments

In a feature article from the latest volume of PV Tech Power, the editorial team at Energy-Storage.News canvassed the opinions of trade association chiefs from five key global regions.

Heads of the US national Energy Storage Association, Australia’s Smart Energy Council, the India Energy Storage Alliance, the UK’s Electricity Storage Network and the European Association for Storage of Energy (EASE), all responded to a series of survey questions on the energy storage industry in 2017 and 2018.

You will be able to read the full article in the journal which you can download from the site here, while some printed copies will be available at upcoming international trade shows including PV Expo in Tokyo.

Along with the four questions that each trade group was asked for the article, reflecting their experiences in 2017 and asking them their expectations in 2018, we also asked them what some of the most exciting developments in energy storage they expect to see in 2018 might be. These ranged from innovations and expected developments in technology to finance and business, to policy and regulation.

Here are the reponses:

Kelly Speakes-Backman, CEO, Energy Storage Association (USA)

One of the most exciting technological developments in distributed energy storage is the use of advanced controls and artificial intelligence (AI). Distributed storage promises enormous value to the electric system and to improving resilience, and the key to unlocking that value is the increasingly sophisticated and automated ways in which those assets can be operated, whether as a single smart asset to avoid a distribution line upgrade or as a virtual power plant of re-configurable aggregated assets.

And of course, the wild card in this discussion is vehicles as EV shares increase, a whole new set of mobile distributed storage assets will enter the grid and involve transportation system needs, not just electric system needs. Sophisticated control systems will be critical to optimizing all these storage assets coming online.

John Grimes, CEO, Smart Energy Council (Australia)

[One of the most exciting developments will be] giving the opportunity for laggards and sceptics to see the big South Australia battery in operation, which undercuts outdated arguments against energy storage. Educating the market of a multiple energy storage options available also puts energy storage firmly in the frame of regulators and market operators.

We are working hard to ensure we unlock the full value of energy storage, both behind the meter, and in aggregate as a virtual power plant.  The economics are already compelling in places like South Australia and in 2018 other states and territories also come into the frame. 

Dr Rahul Walawalkar, Executive director, India Energy Storage Alliance (IESA, INDIA)

With the rapid reduction of solar and wind energy costs, Indian grid now needs solutions for renewable energy integration. This transition is supported by a significant push for ‘Gigafactories’ for advanced energy storage technologies such as li-ion that is driving down the cost of energy storage at a pace even faster than the solar PV cost reductions witnessed in past decade.

According to India Energy Storage Alliance (IESA) research estimates, by 2020 there will be at least three companies globally with 25GWh+ annual production capacity and another five companies with 10GWh+ annual production capacity for Li-Ion batteries. The new projected capacity for 2020 is now over 400GWh based on latest projections by IESA Research. India is targeting 5-10GWh of manufacturing by 2020. 1GWh cell manufacturing would need an investment of US$200-250 million. Looking at the potential India has to create 10GWh of capacity, India could attract investments to the tune of US$3 billion by 2020. And as this happens, ancillary development including module development, containers, transformers, inverters could need an equal amount of investment, taking the total potential to US$6 billion.

On the policy front there are number of key initiatives such as the development of a National Energy Storage Mission by MNRE (Ministry of New and Renewable Energy), launch of EV Policy framework by NITI Aayog (National Institution for Transforming India) and the introduction of ancillary services by CERC (Central Electricity Regulatory Commission), that can have significant positive impact on the energy storage and EV sectors.

Georgina Penfold, CEO, Electricity Storage Network (UK)

In technology, we need to remember that there are other types of batteries besides lithium batteries, and there are other types of storage besides batteries.

In finance, we need to remind investors that storage is long term activity with changing markets. Investing with a flexible attitude to services will bring rewards. In policy and regulation, the biggest impact would come from ensuring that all generators are responsible for their own balancing.

Patrick Clerens, Secretary General, EASE (European Association for Storage of Energy, EUROPE)

Policy and regulation is our main focus as EASE and will be an exciting area to follow these next few years. We are excited to see more and more initiatives recognising the fundamental importance of storage in the EU energy system. Whether it’s the Clean Energy for European Islands forum, the High-Level Battery Alliance, or the ETS (Emissions Trading System) Innovation fund, we see storage becoming more and more central to the EU’s policies in all areas.

More and more players are also realising that energy storage is the make or break technology for a decarbonised energy system by 2050. Since this technology is crucial, discussions are being held for a huge initiative on energy storage, which could propel Europe to the global forefront. Creating such a major initiative will impact energy storage in Europe profoundly.

Read the full article, featuring detailed responses to four survey questions from all five trade group heads, in the latest PV Tech Power (Vol.14), available for free download.

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Energy Storage Summit: What to expect at the London event

Regulators, policymakers, experts, developers, utilities, aggregators and of course, energy storage industry participants will fill out the Victoria Park Plaza in London next week to discuss everything impacting the deployment of energy storage.   

The third annual Energy Storage Summit takes place at the end of February (27-28 February 2018) in London, brought to you by our publisher Solar Media.

Names announced to attend include Nancy Bowker at the US’ main energy regulator, FERC (Federal Energy Regulatory Commission), which has just set out rules for enabling the participation of energy storage in wholesale markets.

You will also be able to hear from and meet folk from the likes of distribution network operator (DNO) Western Power Distribution and UK Power Reserve, financiers like Capitas, Investec, SUSI Partners and Triodos Bank, utilities like EDF and WGL, aggregators such as Limejump and UK and international energy storage tech providers and system integrators and developers including Viking Cold Solutions, ABB, Fluence, Nidec, REStore, NEC ES, Alfen and many more.

The programme promises a lively mix. National Grid is overhauling how it procures various grid services, the industry continues to lobby for regulatory definitions of energy storage and these issues, along with the technical, financial and legal aspects of the industry, from co-location with renewables to real-world case studies and project data, will engage visitors from the Chair’s Opening Remarks at 9am on Tuesday until the conference adjourns the following afternoon.  

“The UK Energy Storage Summit is an ideal opportunity to celebrate the explosive growth of storage over the past year and take stock of maximising its future potential. Energy storage is capable of far more than frequency regulation and the Summit is a good moment to reflect on the significant value it creates across the generation, network and behind-the-meter segments,” Dr Marek Kubik, market director at Fluence, said.

The London connection

While this is very much an international site, as you probably know by now, Energy-Storage.News’ offices are in London and our publisher Solar Media’s events staged around the world include the UK’s main national solar trade event (now known as Solar & Storage Live) in October, and, of course, the Energy Storage Summit.

This gives us an incredible visibility into what many analysts and industry figures have identified as one of the leading regions in the world for energy storage and related technologies. In just the past week, you could read Solar Media Market Research analyst Lauren Cook’s views on business models, technologies and current and predicted levels of deployment in the UK, in findings taken from her team’s newest report.

You could also have read two of our UK editorial team, Liam Stoker and David Pratt’s, almost-just-as-comprehensive looks at the energy storage industry in the country through policies, regulations, opportunities and interviews and commentaries from many of the leading players, politicians and other stakeholders.

All of these topics and more will leap from the pages of our sites and into the auditoriums and conference halls at the Victoria Park Plaza and we urge you to join us for an event that will help set the agenda for discussion across the industry this year.

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UK aggregator Kiwi Power completes 4.8MWh battery in South Wales

UK demand response and energy resource aggregation company Kiwi Power has unveiled its largest behind the meter battery to date with the completion of the 4MW / 4.8MWh Tesla battery at Cenin Renewables in south Wales.

The battery took three months to build in order to provide firm frequency response (FFR) to National Grid after winning a two year contract offering 24 hour availability at £19/MW (US$26.61) per hour beginning on 1 February.

This will be the sole use of the battery over the first two years of the project’s life, but it will also make use of the onsite renewable generation from the site’s solar, wind and anaerobic digestion resources.

According to Kiwi Power’s commercial leader for battery energy storage Quentin Scrimshire, the battery at Parc Stormy near Bridgend is “responding well” and at much faster speeds that required by National Grid.

The project has used third party finance from an unnamed investor which will take the lion’s share of the FFR revenue, while Kiwi takes a fee for managing the battery and Cenin also gets a share of the project’s revenue.

Once the two year contract is completed, Cenin will then receive further benefits of having the battery on site, as Scrimshire explained.

“The site gets additional benefits like resilience in the future when it’s not providing FFR and there’s some other value that we can unlock behind the meter. At the moment we’re just focusing on FFR but it’s a future-proofed battery, we can do everything with it,” he said.

While being unable to access all of these benefits until February 2020, managing director Martyn Popham told our UK sister site Clean Energy News that Cenin will still benefit from learning about the system over the FFR contract length.

“We hope to be able to use it for anything that we can but it’s going to be a steep learning curve. There is an element of risk, its early days and we don’t know how it will go. It’s a little bit uncertain but the good thing is it’s got contracted income for two years and we’ll learn a lot about how it works and then we hope to introduce anything and everything we can to back it up,” he said.

Popham added that the site had plans for large scale electric vehicles and further expansion of onsite renewables which the battery would be able to accommodate.

As regional developer, he also suggested that batteries could be “part of the next generation of projects” Cenin will carry out and so operating a battery onsite will provide invaluable knowledge should the company start building batteries of its own in the future.

While securing a lucrative FFR contract, the future revenue stack of the battery following the two year contract remains unclear. While National Grid is continuing to reformulate its range of grid services, Scrimshire remains confident the battery will continue to offer a service required by the grid operator.

“Frequency response is not going away and with the system needs and product strategy it’s clear that National Grid has got a requirement for frequency response that looks a little different from how it looks today, but it’s certainly something that batteries will provide.

“But we see it being a full mix. That’s Kiwi’s selling point; we get maximum value through lots of different services and we think that’s the future – stacking services on top of each other is going to get us maximum value,” he said.

Last week, analyst Lauren Cook of Solar Media Market Research explained that at present, there is no “typical” way of stacking revenues, with other providers also likely to look at similar business models to Kiwi’s. Cook and her team forecasted that Britain could deploy more than 9,000MWh of behind-the-meter energy storage by 2022.

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‘Explosive’ battery storage growth to be driven by falling costs, renewables co-location

Over 9,000MWh of battery energy storage could be deployed in Britain over the next five years as the sector enjoys a trend towards “explosive growth” driven largely by the country’s clean energy transition, a market analyst has said.

Lauren Cook of Solar Media’s Market Research division spoke to SPP and sister publication Energy-Storage.News this week on the publication of a new report, ‘UK Battery storage: Opportunities & Market Entry Strategies for 2018-2022’.

Cook found that in just 12 months, the UK’s pipeline for new battery storage projects has grown by over 240%, with forecasted installations in 2018 set to rise more than 200% year-on-year. Opportunities are being created by a range of drivers including a national commitment to phase out coal, falling technology costs and more than 30GW of wind and solar capacity ripe for co-location with batteries.

“The market is growing and it’s changing rapidly. There are now projects completed on the ground. Once global companies start to see it’s not just a speculative market, it will make sense for them to think about how to enter the market and what the opportunities are for them.

“They will then need to know who is active in the market, who has these opportunities and who they will have to work with to take advantage of those opportunities.”

Many of the projects noted by Cook to have already been completed or under construction are standalone projects, with co-located solar plus storage sites yet to take off.

With Ofgem only recently having closed its consultation period on draft guidance for those seeking to add energy storage to their RO and FiT accredited sites, Cook maintains that a lack of clarity is sparking caution within the market.

“The solar farms tend to be owned by large investors so they have less appetite for risk. I think a lot of those are still getting their heads round storage at the moment and figuring out what it means for their business. They’ll be looking at adding storage to their solar assets but I’m not sure they’re ready to take it up on a large scale yet,” she said.

However, she added storage developers are already looking to bypass this uncertainty by considering the other advantages of co-location, particularly the savings in cost associated with sharing the grid connection and infrastructure already in place at an existing solar farm.

“That’s certainly how people will be getting around the uncertainty around the RO…there’s definitely a lot of potential there in the future because it makes sense from a technical perspective.”

No ‘typical’ revenue stack

Going beyond co-location potential, Solar Media Market Research also looked extensively at other business models surrounding energy storage deployment, another aspect of the industry analyst Cook said is changing fast.

With an emphasis on projects earning long-term revenues, it is becoming commonplace to speak of a “revenue stack” – earning multiple revenues streams for providing a range of services. However, Cook said, there is no such thing as a “typical” stack in the market today.

“I’m not sure there’s any such thing as a typical stack because there are many factors involved, but if you look at the timeline from the EFR of 2016 you had those projects [that] were successful then went on to apply for the Capacity Market (CM), T-1 and T-4 in early 2017,” Cook said.

“We then saw the FFR auctions happening throughout 2017. Those projects also participated in those auctions [and] new projects also came in. Then I think the most recent phase of the Capacity Market was just another opportunity to add to those stacks.

“It’s not just about stacking them in one moment – so having multiple sources at one point in time – it’s about stacking the revenue streams across the lifetime of the project and having long-term revenue.”

In megawatt-hours, battery energy storage capacities installed in the UK by the end of 2022 will be 50 times what they were as 2017 ended. The report also covers a predicted trend towards longer duration storage in future, comprehensive evaluations of leading players in the industry and analysis of stakeholders.

Learn more about ‘UK Battery storage: Opportunities & Market Entry Strategies for 2018-2022’, here.

Read the entire story

UK battery storage to enjoy ‘explosive growth’ to 2022

Over 9,000MWh of battery energy storage could be deployed in Britain over the next five years as the sector enjoys a trend towards “explosive growth”, a market analyst has said.

Lauren Cook at Solar Media’s Market Research division spoke to Energy-Storage.News this week on the publication of ‘UK Battery storage: Opportunities & Market Entry Strategies for 2018-2022’, a new report.

Cook found that in just 12 months, the UK’s pipeline for new battery storage projects has grown by over 240%, with forecasted installations in 2018 set to rise more than 200% year-on-year. Opportunities are being created by a range of drivers including a national commitment to phase out coal, falling technology costs and more than 30GW of wind and solar capacity ripe for co-location with batteries.

According to Cook, this means the UK could quickly becoming a market of strategic focus for international players.

“The market is growing and it’s changing rapidly. There’s now projects completed on the ground. Once global companies start to see it’s not just a speculative market, it will make sense for them to think about how to enter the market and what the opportunities are for them.

“They will then need to know who is active in the market, who has these opportunities and who they will have to work with to take advantage of those opportunities.”

Going beyond the deployment figures, Solar Media Market Research also looked extensively at business models, another aspect of the industry analyst Cook said is changing fast. With an emphasis on projects earning long-term revenues, it is becoming commonplace to speak of a “revenue stack” – earning multiple revenues streams for providing a range of services. However, Cook said, there is no such thing as a “typical” stack in the market today.

“I’m not sure there’s any such thing as a typical stack because there are many factors involved, but if you look at the timeline from the EFR of 2016 you had those projects were successful, those projects then went on to apply for the Capacity Market (CM), T-1 and T-4 in early 2017,” Cook said.

“Some of those were successful, some of those weren’t. We then saw the FFR auctions happening throughout 2017. Those projects also participated in those auctions, new projects also came in.

“Then I think the most recent phase of the Capacity Market – so again, the T-1 and the T-4 – was just another opportunity to add to those stacks. So you might see projects with an EFR contract, they may also have a T-1, they may also look to get a T-4 in the future, because of the different lengths of contracts – you can simultaneously run some contracts but you may want to have consecutive CM contracts. So you might see T-1 as a way of filling the time between a project becoming operational and the T-4 contract beginning. It’s not just about stacking them in one moment – so having multiple sources at one point in time – it’s about stacking the revenue streams across the lifetime of the project and having long-term revenue.”

In megawatt-hours, battery energy storage capacities installed in the UK by the end of 2022 will be 50 times what they were as 2017 ended. The report also covers a predicted trend towards longer duration storage in future, comprehensive evaluations of leading players in the industry and analysis of stakeholders.

Learn more about ‘UK Battery storage: Opportunities & Market Entry Strategies for 2018-2022’, here.  

Read the entire story

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