ELECTRICITYSTORAGEIncreasing the proportion of UK The Institution of Mechanical Engineers urges Government to adopt theelectricity supply from renewable following recommendations:energy sources is a critical part 1. Support actions to identify the true systemof achieving a sustainable energy benefit of electricity storage. As a matter of priority the UK’s Department of Energy andframework for the nation. To date, Climate Change (DECC) should carry out arelatively small proportions of wind, detailed analysis to estimate the realistic requirements for electricity storage across thesolar and biomass based power have whole UK power system and its correspondingbeen installed in comparison to value to the nation.conventional generation. However, 2. Develop policy frameworks that reward the value of electricity storage in the UK’s powerthe Government expects the markets. The UK Government’s Electricityproportion to increase over the next Market Reform (EMR), which is examining and revising the commercial and regulatoryten years. structure of the nation’s electricity market, should take into account the unique nature ofAs wind and solar power are intermittent forms of electricity storage and remunerate investors andgeneration, when the proportion of these sources operators accordingly.increases in the mix, additional measures areneeded to maintain a safe and efficient balance 3. Encourage and support UK development ofbetween electricity supply and demand on the power storage technologies for exploitation in worldsystem. To date, the adoption of electricity storage markets. The UK Government should advancetechnologies as a means of providing power system the commercial-scale demonstration of electricitysupport has been limited, due to a combination of storage technologies in the UK, and therebyregulatory, commercial and technical factors. create technical value that UK companies can exploit in markets worldwide.This position statement examines the role thatelectricity storage could play in our future networks.Improving the world through engineering
ELECTRICITY STORAGERENEWABLE ENERGY POLICY Benefits of electricity storageRenewable energy provision is a substantial part of The key benefit of storage on a power systemcurrent UK energy policy and commitment. The EU is to increase the efficient utilisation of assetsRenewable Energy Directive sets the immediate on the network. In addition to maximising thegoal of meeting European targets that require use of output from renewable-based electricitythe UK to deliver 15% of the nation’s energy from generation technology, storage enables anrenewable sources by 2020. In addition, the UK’s increased return on investment (ROI) for base-Climate Change Act 2008 places a legally binding load plants through enabling longer periodslonger-term commitment on future Governments to of operation at higher output. Electricityachieve an 80% reduction in the nation’s greenhouse distribution infrastructure, such as transformers,gas (GHG) emissions by 2050 relative to 1990 levels. cables and overhead lines can also be installed toThis target can only be realistically met only through meet average loads instead of being oversized toan energy mix consisting of a high proportion of meet peak loads, thereby avoiding unnecessaryrenewable and other low GHG-emitting sources. The expenditure on power infrastructure.Committee on Climate Change (CCC) predicts that agenerating system largely free of GHG emissions will A number of other benefits also result for thebe needed by 2030 and that by 2040 most transport power system:and heating will be transitioned to electricity-based • Fast acting and responsive; most storagetechnologies . The outcome of such a scenario will can be switched to discharge or chargepotentially be a doubling of UK electricity demand electricity in a time period, often quicker thanrequirements by 2050. generating plant can be bought online or switched off.Considerable challenges exist in the adaptationof the UK power network to support this • Deployable as large or small units; there areanticipated increase in the use of electricity while a range of technologies, some of which aresimultaneously integrating a substantial renewables suitable for small unit sizes and some forcapacity into the generation mix. The scale of the larger installations, making it possible tochallenge ahead is evident in the estimates for design a project to meet a specific application.investment in the system: up to £75 billion for new • Deployable where it is most required; storagegeneration assets and about £35 billion for power can be positioned in small units throughouttransmission and distribution infrastructure over the distribution network, as well as in largerthe next ten years. Other changes in the power and centralised installations.sector, for example increased loads from digitaldevices and heat pumps as well as new forms of • Modularity; many of the technologiesmicro-generation, such as solar power and wind can be scaled to suit a required size orpower connected at consumer premises, will also configuration and are able to be transportedincrease the complexity in managing the system. For to a new location should the application ormost of the time the effects of these changes will be circumstances change.small, but there will be periods when they will haveserious implications for the network’s operation. STORAGE TECHNOLOGYMITIGATION OF VARIABLE There are a number of electricity storageGENERATION USING STORAGE technologies, each with their own particular characteristics of size, cost and performance.Power systems must be operated so that supply is Electricity storage can therefore be considered inequal to the real-time demand and system losses terms of its application and it would be incorrectat all times. If this balance is not maintained, the to consider any form of storage as a ‘one-size-system becomes unstable and may quickly fail, with fits-all’ device; some applications being morepotentially severe economic and technical effects. suited to particular technologies, for technical asAs the proportion of intermittent renewable energy well as commercial reasons.sources increases substantially on the UK network inthe coming decades, there will be occasions whennearly all the demand is being met by a combination Mechanical systemsof wind power and inflexible base-load generatingplant (such as nuclear and biomass), resulting in Pumped hydro electricity storageconsiderable stability challenges. In order to match Energy is stored when electricity is used toeven small changes in production, the network pump water from a lower level to a higher leveloperator may take a number of steps to manage the in a reservoir. Electricity can then be generatedsystem, including: by water flowing through a turbine as it passes back from the high level to the lower level. Thisa) Holding of reserve on existing flexible generation system is typically of large scale and suited to (ie gas turbines) mountainous regions.b) Management of demand (ie voluntary and compulsory disconnections) Compressed-air energy storage Air can be pressurised using electrically drivenc) Use of interconnections to adjoining systems compressors, stored, and then the energy (ie Europe) recovered when the air is expanded back tod) Electricity storage atmospheric pressure through a turbo-expander.
Storage can be underground, using salt caverns Electro-chemicalor other structures, or above ground in vesselsor pipes (a new variation is to use fabric bags Batteriesto contain the air underwater). Although large- There are many types of battery which can be usedscale implementation is possible, few large-scale for small and large applications of electricity storagecompressed air plants have been built. on the power network. The lead acid battery is still the most widely used battery type, but recently thereFlywheels have been developments in the use of lithium ionElectricity can be stored as kinetic energy in a technology. Other battery types include those basedspinning flywheel. A motor is used to increase the on high-temperature systems and flow batteries. Therotational speed of the flywheel, and when it slows latter store energy in electrolyte tanks outside thedown the motor operates in reverse as a generator battery cell, and have potential for both medium andto recover electricity. Large flywheel systems have large-scale applications.been used to provide frequency response services tothe transmission system. The hydrogen cycle A popular concept for electricity storage is to consider electrolysis of water to produce hydrogenThermo-mechanical storage and oxygen. The hydrogen can be used in a fuel cell to generate electricity. Alternatively,Cryogenic energy storage the hydrogen can be utilised as a chemicalAir can be liquefied through cooling using electricity feedstock for manufacturing synthetic liquid fuels,and stored as a cryogen. The liquid air is then thereby transferring the stored energy to theexpanded upon demand through a turbine and the transportation sector.energy recovered as electricity. The system usesexisting technology in a novel configuration and hasbeen recently demonstrated at pilot plant scale by a POTENTIAL APPLICATIONSUK company. OF ELECTRICITY STORAGEPumped heat At present there is little storage capability on the UKElectrical energy is stored in a thermo-mechanical network, the principal capacity being approximatelydevice when the temperature difference between a 2,800 MW of pumped hydro-electricity storage,hot and cold store is used to drive a reversible heat which can store approximately 27,000 MWh (2.5%engine. A UK company is developing this process of daily average electricity production). Initialand is building a demonstrator project. estimates suggest that the reserve requirement will rise from just under 4,000 MW at 2011 levels to 8,000Latent heat recovery MW in 2025 if there is penetration of wind of 30%.Compressed air can be used for the storage of energyas latent heat and that energy is later recovered by In addition to considering more pumped storage,generating electricity from a captive hydroelectric other types of electricity storage will be applicableturbine. A UK company is currently demonstrating to the UK and there is an urgent need for a thorough,this system at small scale. detailed assesment of potential opportunities. Fundamentally, storage should be located where it will be of most value to the network. Table 1 illustrates the relationship between different scales of storage and various operator types. Large-scale storage may be installed at main transformer substations, and medium-scale storage would be appropriate at the distribution transformerTable 1 Examples of different scale applications of substations which supply towns and largeelectricity storage and potential users: industrial sites. Small Medium Large Very large Under 1 MW 1 – 10 MW 10 MW – 100 MW 100 MW +Power producers Standalone Energy trading systems for self- Supply of ancillary generation and services renewablesNetwork operators Deferral of network Local network Deferral of system Network constraint reinforcement management reinforcement management Deferral of network Peak shaving reinforcementConsumers of Small commercial, Local load Peak shaving Peak shavingpower domestic users management, for energy cost for energy cost for local load smart grid support reduction and reduction management and and external ancillary services tariff reduction ancillary services
Within the urban environment, storage installed VALUE OF STORAGE INDUSTRYat a community level can be used to support the IN WORLD MARKETSdevelopment of distributed energy systems, as wellas the smart grid, and defer other expenditure on Several studies have been carried out that examinethe network. and indicate the potential size of the electricity storage market. The Electric Power Research Institute estimates opportunities for up to 50 GWCOMMERCIAL INFLUENCES of storage in the USA, at price structure fromAND REGULATORY POLICY $4,000/kWh to $300/kWh. Other reports suggest a worldwide market of US $20 – 25 billion annually byThe UK electricity market is dominated by a 2020, which suggests a global opportunity of 13competitive generation and supply sector and a GW/year for storage.highly regulated transmission and distributionsector. The opportunities for transmission and However different countries have differentdistribution companies to own and gain value from regulations for electricity storage. The USA isstorage have been limited by the allowable rates of embracing storage as an enabler of the smart gridreturn on assets, which do not compare favourably and renewable energy, and changes in legislationagainst other allowable expenditure. More are under way at Federal and State levels to ensurerecently, incentive schemes for novel technologies storage is considered as part of the future network.have allowed network companies to develop Conversely, in Europe directives have been writtendemonstration projects to illustrate the value of to exclude network operators from the role ofstorage, but the scale of these projects is small and generating and supplying electricity, but the role oflimited to initial demonstrations of applications. storage has been recognised as an integral part ofWithout a change in the regulatory and commercial network operation[13/14] and as a major component offramework in the power sector, there is unlikely to future smart networks.be a significant expansion of electricity storage. There is an urgent need in the UK for a detailedNumerous past reports on the general value of analysis to be undertaken to estimate the realisticstorage indicate that it is usually necessary to requirements for electricity storage across the powercombine income streams in order to achieve a system and realistically determine its correspondingsatisfactory rate of return to investors. For example, value to the nation.large users of electricity may install storage sothat they can take advantage of off-peak energyprices. As well as reducing their own peak prices,they may choose to use storage to offer frequencyresponse or reserve services to the system operator,or be available to offer network support to the localnetwork operator.Commercial operators who wish to develop storage,find that rates of return are much lower than forother investments in the energy sector, because ofthe higher discount rates attached to projects withan uncertain income stream. Technologies such aswind or solar power receive Renewable ObligationCertificates (ROCs) or Feed-In-Tariffs (FIT) whichprovide a long-term certainty for revenue toincentivise the capital investment. However, becausestorage is expected to operate in a commercialenvironment, taking revenue from energy trading,ancillary services and possibly a credit fordeferring other capacity, it can be challenging fora developer to consider storage as a commerciallyacceptable alternative.This uncertainty creates two significant issues:a) The development of storage projects is inhibited and the introduction of storage is likely to be delayed further, up until a point when it may be too late to consider storage as a solution for providing flexibility to the operation of the system.b) Manufacturers, researchers and developers in the UK are not benefiting from early opportunities to demonstrate their technology in the home market and thereby drive costs out through innovation. At best, this means that technology will be exported and the engineering benefit transferred overseas, at worst, the opportunity for the UK to benefit from this significant emerging industry is lost.
RECOMMENDATIONS Appropriate changes in policies and mechanisms are needed: electricity storage should beThe large-scale deployment of electricity storage considered in a separate market category fromtechnologies, in common with many other generation, transmission, distribution and supply.technology-based approaches for mitigating GHG Market mechanisms will need to be adapted ifemissions, requires significant initial capital storage at the distribution level is to receive valueexpenditure. The incorporation of storage as a both for its role in network reinforcement and forsystem asset will result in reduced system capital energy and power trading.and operating expenditure and maximise the return • Encourage and support UK development ofon investments in electricity generation equipment, storage technologies for exploitation in worldwhether based on renewable or traditional energy markets. The UK Government should advancesources, as well as network infrastructure for power the commercial-scale demonstration of electricitytransmission and distribution. There is concern storage technologies in the UK, and therebythat the correct investment decisions should be create technical value that UK companies canmade now to prevent investment in the wrong exploit in markets worldwide. This will drivetechnologies that will restrict future options. innovation towards lower costs, support the provision of a more flexible and responsive UK power sector, and is an important step if the fullThe Institution of Mechanical Engineers benefits of the nation’s renewable energy sourcesurges Government to adopt the are to be realised.following recommendations:• Support actions to identify the true system benefit of electricity storage. As a matter of REFERENCES priority the UK’s Department of Energy and 1 EU, Directive 2009/28/EC of the European Parliament and of the Climate Change (DECC) should carry out a Council, 23 April 2009. detailed analysis to estimate the realistic 2 Crown, Climate Change Act 2008, 2008. requirements for electricity storage across the 3 whole UK power system and its corresponding Committee on Climate Change, The Renewable Energy Review, May 2011. value to the nation. This should be taken into 4 account by Government when determining the DECC, 2050 Pathways Analysis (HM Government, London, 2010). future policy for planning and developing the 5 power system and electricity market. There is DECC, Planning our electric future: a White Paper for a lack of understanding about the flexibility of secure, affordable and low carbon electricity, July 2011 (HM Government, London, 2011). electricity storage and the wider financial benefits 6 it can deliver, beyond enabling enhanced returns Ofgem, Project Discovery, February 2010. on the deployment of renewable energy-based 7 Parliamentary Office of Science & Technology, POSTnote 306, generation equipment. This is in part related to Electricity Storage, April 2008. the rapid development of a number of the newer 8 DECC, Digest of United Kingdom Energy Statistics (DUKES) technologies and needs to be addressed in the 2011 Edition, July 2011. near term. 9 National Grid, Operating the Electricity Transmission Networks in 2020, June 2011.• Develop policy frameworks that reward the 10 value of electricity storage in the UK’s power EPRI, Electricity Energy Storage Technology Options, EPRI TU markets. The UK Government’s Electricity 1020676, December 2010. Market Reform (EMR), which is examining and 11 Pike Research, Energy Storage on the Grid, July 2011. revising the commercial and regulatory structure 12 Escovale, Market Study for Flow Batteries, 2010. of the nation’s electricity market, should take 13 European Commission, Energy Infrastructure Priorities for 2020 into account the unique nature of electricity and beyond, COM, 2010, 677. storage and remunerate investors and operators 14 accordingly. Large-scale installations have to European Commission, Proposed regulation for Trans-European Energy Infrastructure, COM, 2011, 658. pay charges both as a generator of electricity and as a demand customer when charging up, which increases the costs disproportionately.Institution ofMechanical Engineers1 Birdcage WalkWestminsterLondon SW1H 9JJT +44 (0)20 7973 1293F +44 (0)20 7222 email@example.com/policyPUBLISHED MAY 2012