fisher german magazine 1110 fisher german magazine

Advancements in global energy storage technology look set to transform the UK energy market and landowners should be ready to maximise the opportunities.

For further information contact Darren Edwards on 01858 411236 or darren.edwards@fishergerman.co.uk

Energy policy and technology have come on in leaps and bounds over the last decade, meaning it is not only possible to now generate your

own electricity, but it can be done more easily and profitably than ever before. The only drawback has been that, once created, electricity has needed to be used instantly – either locally, near the point of generation, or fed into the national grid.

But that’s all about to change as the technology for storing electricity, which for so long has lagged behind advances in renewable power, is finally coming of age. “Energy storage is a game changer for renewables and the grid network, and will allow for decentralised locally integrated markets to form,” explains Darren Edwards, partner at Fisher German.

Earlier this year an independent report (see box, right) predicted 2016 will be a milestone for the energy storage market, with the cumulative installed base set to

pass 2GW – that’s the equivalent of the original operating capacity of the massive Hoover Dam in the United States. The US, Japan and South Korea have been at the forefront of pushing forward the new technology that is now arriving in the UK.

Broadly speaking, energy storage facilities are building-sized versions of the lithium-ion batteries that power our smartphones, cameras and other gadgets. Advances in technology that allow more power to be stored longer and a reduction in battery manufacturing costs (which have fallen by 100% in the last five years) are combining to make energy storage viable on a nationwide scale.

Falling costsBy 2020 experts predict that around 1GW of energy storage will be installed across the UK – that’s enough to power 750,000 (or 3%) of the country’s homes. Earlier this year the UK’s largest battery array

totalling 10MW went online in Northern Ireland and a smaller test facility has been in operation in Bedfordshire for the past two years.

Costs for storing electricity are forecast to drop by up to 90% in the next seven years and could fall by a third again after that. US company Tesla has already installed domestic battery packs in houses in Wales, while the wider commercial applications are also generating a

ENERGY STORAGE

substantial amount of interest.

“In the short term, solar power installations are likely to be paired with new energy storage facilities,” predicts Darren. “At a time when financial support for solar has been reduced, energy storage could improve viability, so in that respect the technology has advanced at just the right time and it will not be long until renewables plus storage can be used for demand side management and balancing services.”

Timely solutionRural landowners are expected to benefit from the new technology either by pairing energy storage with existing renewable plants on their land or leasing land to commercial operators (see box, left). This market is likely to expand quickly over the next few years as the strain on the existing centralised structure of the national grid increases due to the closure of carbon-generating power stations.

In common with most countries, demand for electricity in the UK varies over a 24-hour period but as it hasn’t been possible until now to store electricity,

Opportunities for farmers and landownersRenewable energy installations like solar parks and wind farms that produce electricity largely or solely for the national grid are likely to be the primary focus for energy storage facilities in the next few years.

“Those who lease their land to third parties, who manage and operate the renewables installation, can expect that third party to be approaching them with a view to adding an energy storage facility,” says Fisher German partner Darren Edwards.

“It’s important to bear in mind that the new facility adds value to the existing scheme, so it’s only right that the landowner benefits from a share of any increase in project revenue. Aside from the financial implications, it will be important for landowners to consider any energy storage proposal in the context of existing lease arrangements and to ensure there are provisions for site remediation at the end of the battery life cycle. In essence, it is critical to think outside of the box and cover off all eventualities.”

And for landowners who have invested in a renewables installation themselves, adding an energy storage facility will allow them to maximise revenue streams. Perhaps most exciting are the prospects for landowners with remote sites that have no access to the national grid. “There will be instances where there is potential to match up a renewable generating technology with a storage facility to allow ‘off-grid’ locations to become virtually self-sufficient,” says Darren.

power stations have been kept running to meet the spikes of peak demand – an inefficient and expensive solution.

The new technology has the ability to smooth out the demand peaks as power is stored in batteries when electricity use is lowest (normally during the night) and then released into the national grid when demand is highest. Furthermore, electricity from intermittent renewable generation (in particular from wind farms and solar parks) can be captured when local conditions provide a lot of power and then stored until it is required.

“Again,” says Darren, “energy storage capability is emerging just at the right time. As the UK continues to close coal-fired power stations to meet emissions targets it is struggling to maintain supply, particularly in peak periods. Renewables combined with energy storage looks set to provide a timely solution and transform the marketplace.”

Off thegrid

Independent report endorses energy storageAt the start of 2016 an independent report by KPMG described energy storage as the “missing component” in the move towards a low carbon energy system. Commissioned by the Renewable Energy Association (REA) the report notes that many grid-scale projects are already economic, only requiring funding solutions before installation can commence.

REA chief executive Dr Nina Skorupska CBE says: “2016 is going to be the breakthrough year for energy storage and the growth of decentralised energy. This report shows that storage is already upon us and whilst traditional fuels like nuclear and gas are needing increasing help from the government, the cost of renewable technologies is coming down and many companies are looking forward to the post-subsidy business model.”

Energy storage is a game changer for renewables and the grid network”