33 - Legislation, statutory instruments and licenses for storing energy in UK

Abstract

A major impediment to mass deployment of renewable energy such as solar and wind is their intermittent nature which creates large peaks and troughs in energy supply. Energy storage offers a solution to bridge these periods. More generally, storage is necessary to support the energy system of future to deliver grid modernization, reliability and resilience, net zero, power quality, electrification of heat and transport, and coordination of markets. From an economic perspective, storage can support defer transmission and distribution investments, provide better value for existing assets, and reduce costs through energy management. From an environmental perspective, it increases flexibility to meet net zero targets, unlock solutions to intermittency and generation curtailment. Despite regulatory advances and falling capital costs, the deployment of battery energy storage system at scale is hindered because of market and regulatory barriers that still remain, so the full value of storage services is yet to be rewarded, preventing storage from stacking multiple services across different markets. In our analysis we identified among the constraints those that are related to lack of technical and process standardization, lack of market accessibility and market signals, lack of supply chain standards, lack of specific long-term targets and planning for storage, lack of direct subsidies, supplier hub model, high business rates, slow-paced grid code modification, and procurement based on conventional framework agreements that favor traditional generators. From our analysis, we call for a revisit to the regulatory framework for storage to create routes to market and accessibility and the envisaged benefits to the electricity system, while empowering consumers, supporting demand side response and uninterruptible power supplies.