Energy storage set to boom

Posted: October 19, 2016 in battery storage, Energy management
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The advent of commercial-scale energy storage is set to be a key theme in the energy world for the next few years.

Storing renewable (and other) energy generated during periods of low demand to then release during peak demand periods offers huge potential while also limiting the need for new power stations.

To put that in context, National Grid’s Future Energy Scenarios predicts that by 2040 up to 18GW of batteries could be installed at commercial and domestic sites, five times the capacity of the £18 billion Hinckley Point C Nuclear power plant (raising further questions about the need and viability of new nuclear).

Production booming

Battery efficiency is improving and costs falling, which, coupled with incentives, are making battery storage a realistic option for many businesses, meaning they can avoid using peak price electricity from the grid, while selling excess capacity.

The main factor in the increasing uptake is the dramatic fall in the cost of lithium batteries (down 80% in last five years according to some estimates), with further falls expected. Tesla is the best known battery company, while China is ramping up production as only they can. Tesla’s planned gigafactory plans to produce 35GW of batteries a year from 2017, pushing costs down by 30%.

Storage contracts and incentives

National Grid announced the first 1GW of storage projects recently, potentially saving up to £200 million by balancing the system more efficiently. As storage capacity increases so flexible demand and response schemes become more viable and generate greater benefits, along with stronger business case for businesses investing in storage.

While mass uptake of battery technology may be a little while off, storage is set to be one of the main energy themes of the next few years, creating opportunities for businesses to reduce peak energy costs while profiting from excess capacity.

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