Download to read offline
![www.storelectric.com© 2018 Storelectric Ltd This presentation represents the current views and intentions of Storelectric at the time of writing.
Notes page for The Market
In the UK the market is over 20GW.
The government’s TINA (Technology Innovation Needs Analysis) for Electricity Networks and Storage determined that the country needs a
median 27.4GW and 128GWh (i.e. 5 hours average duration) of new storage. https://www.carbontrust.com/media/168551/tina-electricity-
networks-storage-summary-report.pdf – see Chart 2.
• We can ignore their breakdown of technologies. Total new pumped hydro planning applications are 1.05GW, none of which looks to be
sufficiently cost-effective to be built.
• For batteries, 0.1GW are operational, 0.6GW in construction, 1.1GW planning approved, 1.7GW planning pending [total so far 3.4GW]
and a further 12GW with DNO applications outstanding (see https://auroraer.us11.list-
manage.com/track/click?u=095bcc5477fce868775bbbd67&id=ded62ab359&e=e8860559df) but most of which are unlikely to be built due
to:
1. The elimination of EFR (see Stage 1: Rationalisation p14 in https://www.nationalgrid.com/sites/default/files/documents/Product
Roadmap for Frequency Response and Reserve.pdf ),
2. The saturation of the Primary Frequency Response market (see https://utilityweek.co.uk/frequency-response-market-nearing-
saturation-industry-warned/ ) and
3. The heavy de-rating of batteries in the Capacity Market (see https://www.emrdeliverybody.com/Lists/Latest
News/Attachments/150/Duration Limited Storage De-Rating Factor Assessment - Final.pdf – table E1 p5).
Other analyses lead to similar conclusions: superimposing actual wind patterns on 2030 forecast wind generation yields a need for 30GW
storage; the National Infrastructure Planning document sees needs at a similar level, etc.
And that is just for peak smoothing, i.e. enabling renewables to deliver variable power. When baseload plants close (and few, if any, nuclear
plants will open in time) then we need 3-6 times as much storage to enable renewables to supply baseload. And much more is needed to
support the greening of heating (mainly via electrically driven heat pumps), transportation (electricity and hydrogen) and industry.](https://image.slidesharecdn.com/33storelectricprescleantechinnovate20031816-9extended-180327131211/85/Storelectric-12-320.jpg)
More Related Content
More from CleantechInnovate
Storelectric
- 1. www.storelectric.com© 2018 StorelectricLtd This presentation represents the current views and intentions of Storelectric at the time of writing. Mark Howitt, Director 07910 020 686 mhowitt@storelectric.com www.storelectric.com Storelectric Ltd Enabling Renewables to Power the Grid
- 2. www.storelectric.com© 2018 StorelectricLtd This presentation represents the current views and intentions of Storelectric at the time of writing. The Problem and Solution The Problem • Renewables are intermittent • GW scale renewables need GW scale back-up GW = Gigawatt, enough electricity to power a million people with their industry and infrastructure The Solution • Large scale, long duration storage • Each plant stores more electricity than a year’s output of Elon Musk’s Gigafactory • The UK has geological potential to power Europe for a week
- 3. www.storelectric.com© 2018 StorelectricLtd This presentation represents the current views and intentions of Storelectric at the time of writing. Notes page for The Problem and Solution The Problem Renewables are intermittent They generate when they want to, not when we need them Therefore they need back-up – at the same scale Fossil fueled power station operating inefficiently £2bn p.a. to back up electricity now, doubling in ~5 years GW scale renewables need GW scale back-up Consider a windless winter night (a frequent occurrence) when renewables are powering all variable demand on the grid There is a 5-hour peak in demand coming up, as happens every night The peak is up to 30GW more demand than baseload generation, which is normal Will 30-60 minute duration battery supply the 5-hour peak? Will megawatt scale batteries satisfy gigawatt scale need? The Solution Large scale, long duration storage Each installation can replace a power station Complements batteries, interconnectors and other technologies The UK has geological potential to power Europe for a week Suitable geologies globally Does not compete with batteries, except on the periphery. Consider the road system: side and feeder roads are needed to support trunk roads and motorways; the latter are required to take the load off the former and enable them to work effectively. We are like the trunk roads and motorways; they are like the side and feeder roads. All are needed, all are complementary – as with interconnectors, flywheels, demand side response etc. With large scale long duration storage, the system works; without it, it fails.
- 4. www.storelectric.com© 2018 StorelectricLtd This presentation represents the current views and intentions of Storelectric at the time of writing. The world’s biggest battery, using just air, water, salt and equipment Typical sizes: 40MW, 200-500MWh 500MW, 3-12GWh Compressed Air Energy Storage using Thermal Energy Storage Storelectric’s TES CAES
- 5. www.storelectric.com© 2018 StorelectricLtd This presentation represents the current views and intentions of Storelectric at the time of writing. The world’s most efficient and cost-effective large scale electricity storage. Round trip efficiency ~62-64% for 40MW, ~70% for 500MW (existing plants are 42-50%) Almost as efficient as pumped hydro, less than 1/3 of the cost (depending in part on location), much closer to both supply and demand Capex for a 5 hour plant is comparable with capex of a half-hour battery of the same rating Efficiency increases with scale, in contrast with batteries Notes page for Storelectric’s TES CAES
- 6. www.storelectric.com© 2018 StorelectricLtd This presentation represents the current views and intentions of Storelectric at the time of writing. Comparison with other CAES technologies
- 7. www.storelectric.com© 2018 StorelectricLtd This presentation represents the current views and intentions of Storelectric at the time of writing. Compressed Air Energy Storage within a Combined Cycle Gas Turbine power station Grid, Storelectric’s CCGT CAES
- 8. www.storelectric.com© 2018 StorelectricLtd This presentation represents the current views and intentions of Storelectric at the time of writing. Notes page for Storelectric’s TES CAES Round trip efficiency ~60% (existing plants 42-50%; new versions aspire to 54%) The only CAES technology that can be retro-fitted to CCGT or OCGT power stations over the right geology Gives new life to stranded power station assets: • Almost halves emissions • Adds storage related revenue streams • As electricity price volatility increases (see a later slide), opex drops significantly below that of the power station Much cheaper than any other CAES technology – but can’t estimate costs because that depends on what we’re retro-fitting. New, it costs only ~£10-15m more than a CCGT.
- 9. www.storelectric.com© 2018 StorelectricLtd This presentation represents the current views and intentions of Storelectric at the time of writing. A salt mine much smaller than our caverns which are ~300m tall An Idea of Scale Cavern Size • Our small plants’ caverns ~2 x St Paul’s Cathedral • Our large plants’ caverns ~25 x St Paul’s Cathedral What is a Cavern? • Drill a hole, pump in water, pump out brine, what’s left is the cavern • Cheap, well known technology • ~1/3 of Europe’s natural gas reserve is stored in salt caverns • Naturally hermetic • Pressure is determined by depth
- 10. www.storelectric.com© 2018 StorelectricLtd This presentation represents the current views and intentions of Storelectric at the time of writing. Notes page for An Idea of Scale Note: This is a mine, not a salt cavern. It’s shown only to illustrate scale: for our small pilot plant (200MWh) we will use two caverns each almost as big as St Paul’s Cathedral in London. People and machines go down mines. To make a cavern, 1.Drill a hole into the salt basin 2.Pump in water, pump out brine; what’s left is the cavern. Salt caverns are naturally hermetic and self-healing in case cracks develop. Approaching 1/3 of all natural gas storage in Europe is stored in such salt caverns.
- 11. www.storelectric.com© 2018 StorelectricLtd This presentation represents the current views and intentions of Storelectric at the time of writing. The Market Top-Down • $1trn market to deliver dispatchable power • And that’s just the capital cost of building them • 3-6x more to deliver baseload • 3-10x more to support de-carbonisation of transportation and industry Bottom-Up • Each 40MW plant delivers 12-15% IRR • Each 500MW plant delivers 15+% IRR • Whole project IRR – much greater if largely project financed • IRR growing as renewables penetration grows
- 12. www.storelectric.com© 2018 StorelectricLtd This presentation represents the current views and intentions of Storelectric at the time of writing. Notes page for The Market In the UK the market is over 20GW. The government’s TINA (Technology Innovation Needs Analysis) for Electricity Networks and Storage determined that the country needs a median 27.4GW and 128GWh (i.e. 5 hours average duration) of new storage. https://www.carbontrust.com/media/168551/tina-electricity- networks-storage-summary-report.pdf – see Chart 2. • We can ignore their breakdown of technologies. Total new pumped hydro planning applications are 1.05GW, none of which looks to be sufficiently cost-effective to be built. • For batteries, 0.1GW are operational, 0.6GW in construction, 1.1GW planning approved, 1.7GW planning pending [total so far 3.4GW] and a further 12GW with DNO applications outstanding (see https://auroraer.us11.list- manage.com/track/click?u=095bcc5477fce868775bbbd67&id=ded62ab359&e=e8860559df) but most of which are unlikely to be built due to: 1. The elimination of EFR (see Stage 1: Rationalisation p14 in https://www.nationalgrid.com/sites/default/files/documents/Product Roadmap for Frequency Response and Reserve.pdf ), 2. The saturation of the Primary Frequency Response market (see https://utilityweek.co.uk/frequency-response-market-nearing- saturation-industry-warned/ ) and 3. The heavy de-rating of batteries in the Capacity Market (see https://www.emrdeliverybody.com/Lists/Latest News/Attachments/150/Duration Limited Storage De-Rating Factor Assessment - Final.pdf – table E1 p5). Other analyses lead to similar conclusions: superimposing actual wind patterns on 2030 forecast wind generation yields a need for 30GW storage; the National Infrastructure Planning document sees needs at a similar level, etc. And that is just for peak smoothing, i.e. enabling renewables to deliver variable power. When baseload plants close (and few, if any, nuclear plants will open in time) then we need 3-6 times as much storage to enable renewables to supply baseload. And much more is needed to support the greening of heating (mainly via electrically driven heat pumps), transportation (electricity and hydrogen) and industry.
- 13. www.storelectric.com© 2018 StorelectricLtd This presentation represents the current views and intentions of Storelectric at the time of writing. IP, Competition Intellectual Property • Patentable: thermal storage system • Knowhow: system integration, trading, sites, partnerships Competition Storelectric Adiabatic CAES Existing CAES Isothermal CAES Status Quo Efficiency 68-70% 50% Unsuccessful (targeted 70%) Power stations operate very inefficiently Emissions (% of a power station) 0% 50-60% Scavenging heat (large scale impossible) >> 100% Capex (% of a power station) 150% 180% >> 200% 100% Opex (2025 estimate) (% of a power station) 60% 85% n/a 100% CAES = Compressed Air Energy Storage
- 14. www.storelectric.com© 2018 StorelectricLtd This presentation represents the current views and intentions of Storelectric at the time of writing. Notes page for IP, Competition Intellectual Property Patentable: thermal storage system Over one-third more efficient than current technologies (~70% v 50%) IP will keep us ahead of competitors – efficiency goes straight to profits Knowhow: system integration, trading, sites, partnerships Competition Existing CAES 50% efficient – we are 68-70% 50-60% of emissions of a CCGT – ours are zero More expensive capex than ours The Status Quo Balancing renewables using fossil fueled power stations, inefficient and high emissions Isothermal CAES Different technology from ours: isothermal rather than adiabatic Adiabatic (us) balances heat over the whole cycle; isothermal (them) optimises compression Fundamentally weak concept: 3 existing businesses folded / folding
- 15. www.storelectric.com© 2018 StorelectricLtd This presentation represents the current views and intentions of Storelectric at the time of writing. The Team Partner Companies Paul Davies, Chairman Former Senior Partner, PwC Corporate Finance Infrastructure; former Director, HSBC infrastructure Tallat Azad, Managing Director Chartered Engineer; former Director, Alstom Power – new technologies, responsible for energy storage. Mark Howitt, Chief Technical Officer Inventor, Physicist, business experience in both multinationals and consultancy, 3 start-up subsidiaries, IP experience Jeff Draper, Chief Financial Officer Accountant, Physicist, entrepreneur, former partner in accounting firm
- 16. www.storelectric.com© 2018 StorelectricLtd This presentation represents the current views and intentions of Storelectric at the time of writing. Notes page for The Team Partner Companies Our partner companies provide all the capabilities we need. Siemens – top-side equipment and control systems Costain – engineering and civils PwC – corporate finance and advisory Maloney Metalcraft – thermal energy subsystem Dentons – legal and advisory Fortum – dynamic modelling and optimization support KBB UT – rock mechanical analysis, cavern design and support ERM – planning and environmental support Oswald – the initial calculations and analyses of alternatives Durham University – R&D on future technological developments Shell Springboard awarded us our first money when we won their regional competition
- 17. www.storelectric.com© 2018 StorelectricLtd This presentation represents the current views and intentions of Storelectric at the time of writing. The Ask: 4 investment opportunities – 1. Topco 1. Topco Storelectric Ltd • £1m at £10m valuation • Develop new sites in preparation for setting up an SPV • These SPVs will develop revenues in 6-12 months • Develop capabilities in project management, plant operation, trading • Already raised £550k at valuations up to £2.5m in previous rounds
- 18. www.storelectric.com© 2018 StorelectricLtd This presentation represents the current views and intentions of Storelectric at the time of writing. Notes page for The Ask: 4 investment opportunities – 1. Topco Topco £1m at £10m valuation IRR 15%, SEIS pre-approved, seeking EIS confirmation but this is far from guaranteed as Inland Revenue’s rules changed. Develop new sites (4-6 p.a. initially, increasing) using 2 technologies, to flip / spin off Develop capabilities in project management, plant operation, trading Will also develop new and hybrid technologies Storelectric licenses TES CAES from TES CAES Technology Ltd, whose three main shareholders / directors are common to both Storelectric owns the other technology and future developments that are not specific to TES CAES Already raised £400k at valuations up to £2.5m Also raised £150k for IP company
- 19. www.storelectric.com© 2018 StorelectricLtd This presentation represents the current views and intentions of Storelectric at the time of writing. The Ask: 4 investment opportunities – 2. Development 2 and 3. Plant Development SPVs (both types) SPV = Special Purpose Vehicle / Company – a separate company from Storelectric • 2. Distribution Connected Plant (up to 50MW) • £2.5m at £4m valuation (60%) • IRR 12-15% • Develop a new plant to shovel ready, 1 year (local planning process) • Exit by flipping – reinvest in next plants if EIS invested • 3. Transmission Connected Plant (typically 500MW) • £8m at £13.3m valuation (60%) • IRR 15%+ • Develop a new plant to shovel ready, 3 years (NSIP planning process) • Exit by flipping – reinvest in next plants if EIS invested
- 20. www.storelectric.com© 2018 StorelectricLtd This presentation represents the current views and intentions of Storelectric at the time of writing. Notes page for The Ask: 4 investment opportunities – 2. Development Plant Development £2.5m at £4m valuation (60%) Connected to the distribution grid Typical size 40MW, 200MWh IRR 12-15% Develop a new plant to shovel ready, 1 year Exit by flipping – reinvest in next plants if EIS invested Note: EIS status is far from guaranteed as Inland Revenue rules exclude “generation”. Although we don’t generate (which we are discussing with HMRC), storage is defined legally as consumption plus generation. Even so, this is project development which, if it does not trade electricity (other than perhaps during commissioning) then it may be acceptable. £8m at £13.3m valuation (60%) Connected to the transmission grid Typical size 500MW, 2.5GWh IRR 15%+ Develop a new plant to shovel ready, 3 years Exit by flipping – reinvest in next plants if EIS invested Note: EIS status is far from guaranteed as Inland Revenue rules exclude “generation”. Although we don’t generate (which we are discussing with HMRC), storage is defined legally as consumption plus generation. Even so, this is project development which, if it does not trade electricity (other than perhaps during commissioning) then it may be acceptable.
- 21. www.storelectric.com© 2018 StorelectricLtd This presentation represents the current views and intentions of Storelectric at the time of writing. The Ask: 4 investment opportunities – 4. Construction 4. Plant Construction SPV SPV = Special Purpose Vehicle / Company – a separate company from Storelectric • £50m • IRR 12-15% at constant revenues and costs • Revenues are forecast to grow strongly • Operational costs are forecast to decrease strongly • Highly flexible plant able to accommodate a rapidly shifting regulatory landscape • 5-hour storage is not de-rated for duration on the Capacity Market, qualifies for Reserve revenue streams • Develop a new plant from shovel ready to post- commissioning, 2 years • An infrastructure play • Exit by either re-financing (e.g. 75% of the firm at 6% leads to a return on equity of ~32%) or sale ~25% of revenues are from arbitrage, following roughly the top blue dotted line ~80% of opex is electricity purchase costs, roughly the bottom blue dotted line ~50% of revenues are from balancing and ancillary services
- 22. www.storelectric.com© 2018 StorelectricLtd This presentation represents the current views and intentions of Storelectric at the time of writing. Notes page for The Ask: 4 investment opportunities – 4. Construction The IRR is calculated on the assumption of constant trading conditions. However, trading conditions are improving in almost all revenue sources and in the main operational cost source, as per the graphs. Therefore returns on investment should be considerably higher.
- 23. www.storelectric.com© 2018 StorelectricLtd This presentation represents the current views and intentions of Storelectric at the time of writing. Mark Howitt, CTO +44 (0) 7910 020 686 mhowitt@storelectric.com Storelectric Ltd Compressed Air Energy Storage Enabling renewables to power the grid Jeff Draper, CFO +44 (0) 7919 536 551 jdraper@storelectric.com Tallat Azad, MD +44 (0) 7875 880 262 tallat.azad@storelectric.com Paul Davies, Chairman +44 (0) 7802 869 074 pdavies@storelectric.com