On the Role of Regulatory Policy on the Business Case for Energy Storage in Both EU and UK Energy Systems: Barriers and Enablers
Abstract
:1. Introduction
2. Energy Storage Classification
3. Market and Regulatory Changes for Energy Storage
3.1. Definiation and Classification of Energy Storage
- Defining storage as a discrete activity or asset class to ensure investment certainty.
- Introduce storage provisions within the distribution license so network operators can be free from some generation license rules.
3.2. The Interaction of Storage with Final Consumption Levies
3.2.1. Energy Storage Treatment in FiT/RO Sites
3.2.2. Energy Storage Treatment under CfD
3.2.3. Energy Storage Interaction with the CCL
3.3. Network Charges for Energy Storage
- Removing the TNUoS demand and generation residual charges;
- Removing DUoS demand residual charges;
- Removing BSUoS demand charges;
- Introducing new fixed charges to cover the increased implementation of ‘behind the meter’ storage.
3.4. The Treatment of Energy Storage in the Capacity Market
3.5. Energy Storage Ownership
3.6. Energy Storage Planning System
- If ES capacity is below 50 MW, the storage developer obtains planning consent from the local council.
- If ES capacity is above 50 MW, it is regarded as a nationally significant infrastructure project, and thus, storage owners obtain consent from the government.
- If storage is included in a composite project with other forms of generation, and the capacity of each of this installation is below 50 MW, this falls under the local planning regime.
4. SWOT Analysis Method
5. Results
5.1. Strengths
5.1.1. Removing Double Network Charges
5.1.2. Energy Storage Co-Location with Final Consumption Levies Sites
5.1.3. Facilitating Grid Access for Energy Storage
5.2. Weaknesses
5.2.1. Energy Storage Definition and Classification
- The ES system can be centralised or distributed.
- The ES system may be owned by a load serving entity, a customer, a third party, or local publicly-owned electric utility.
- The ES system can provide generation, transmission and distribution services.
5.2.2. Strengthen the Unbundling Requirements
5.2.3. Payment of FCLs for Small-Scale ES
5.2.4. Employing De-Rating Factors in the Capacity Market
5.2.5. Introducing Fixed Charges for behind the Meter Energy Storage
5.3. Opportunities
5.3.1. Encouraging Private Parties’ Investment in Energy Storage
5.3.2. Ancillary Services Aggregation
5.4. Threats
5.4.1. High Capital Cost
5.4.2. Cannibalisation of Revenue Streams Available for Energy Storage
6. Summary and Brexit Discussion
7. Conclusions
Author Contributions
Funding
Acknowledgments
Conflicts of Interest
References
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The Barrier to Energy Storage Deployment | References |
---|---|
The absence of ES definition and classification | [29,37,38,39,40,41,42,43,44,45,46,47] |
Storage ownership by network operators | [37,38,40,41,43,45,46,48,49] |
Payment of double network fees | [29,37,38,41,44,46,50,51] |
Payment of final consumption levies (FCLs) | [37,38,43,46] |
Lack of ancillary services remuneration | [29,37,38,39,40,41,43,52] |
Reserve market requirements | [29,38,39,45] |
Fixed electricity pricing | [37,43,53] |
Absence of direct subsides | [29,38] |
Factors | Helpful to Storage Business Case | Harmful to Storage Business Case |
---|---|---|
Internal | Strengths | Weaknesses |
|
| |
External | Opportunities | Threats |
|
|
Project Name | Capacity and Locations | ES | DNO | Type of BM |
---|---|---|---|---|
CLNR | RiseCarr: 5 MWh, H.Ngate: 0.2 MWh WoolerRamsay: 0.2 MWh Maltby: 0.1 MWh, Wooler St. Mary: 0.1 MWh Harrowgate Hill: 0.1 MWh | Li-ion | NPG | DNO Merchant |
Short-Term Energy Storage | Hemsby: 200 kWh/200 kW | Li-ion | UKPN | DNO Merchant |
SNS | Leighton Buzzard: 6 MW/10 MWh | Li-ion | UKPN | DNO Contracted |
FALCON | Milton Keynes: 100 kWh | NaNiCl2 | WPD | DNO Merchant |
Orkney Park | Kirkwall: 500 kWh, 2 MW | Li-ion | SSEPD | Contracted Services |
NINES | Shetland Iceland 3 MWH, 1 MW | Lead-Acid | SSEPD | DNO Merchant |
Low Voltage Connected Energy Storage | Chalvey, Berkshire 2 kWh, 25 kW | Li-ion | SSEPD | DNO Merchant |
Application | DNO | TSO | Energy Supplier | Generators | Private Operators |
---|---|---|---|---|---|
Energy Arbitrage | x | x | √ | √ | √ |
Peak shaving | √ | x | x | x | √ |
Voltage support | √ | √ | x | x | √ |
Constraint management | √ | x | x | √ | √ |
System balancing | x | x | √ | √ | √ |
Portfolio balancing services | x | x | √ | √ | √ |
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Gailani, A.; Crosbie, T.; Al-Greer, M.; Short, M.; Dawood, N. On the Role of Regulatory Policy on the Business Case for Energy Storage in Both EU and UK Energy Systems: Barriers and Enablers. Energies 2020, 13, 1080. https://doi.org/10.3390/en13051080
Gailani A, Crosbie T, Al-Greer M, Short M, Dawood N. On the Role of Regulatory Policy on the Business Case for Energy Storage in Both EU and UK Energy Systems: Barriers and Enablers. Energies. 2020; 13(5):1080. https://doi.org/10.3390/en13051080
Chicago/Turabian StyleGailani, Ahmed, Tracey Crosbie, Maher Al-Greer, Michael Short, and Nashwan Dawood. 2020. "On the Role of Regulatory Policy on the Business Case for Energy Storage in Both EU and UK Energy Systems: Barriers and Enablers" Energies 13, no. 5: 1080. https://doi.org/10.3390/en13051080