criteria, as set out in decision letter.
financial benefits.
By progressing the development of energy storage, the project contributes to the
following aspects of The Carbon Plan (TCP):
Low Carbon Power Generation through the mitigation of intermittency
The `higher renewables, more energy efficiency' pathway of TCP implies a significant
increase in the need for additional reserve and response capacity beyond 2020 to
account for the variability in output. The Method of optimising storage for the whole
system aims to contribute to this, enabling low carbon generation to displace
high-carbon generation and reducing shedding of renewables.
Low Carbon Buildings through low carbon heating
During the 2020s, technologies such as heat pumps will begin to expand at scale into
residential areas, placing significant new demands on distribution networks. Cost
effective storage will allow these peaks to be flattened without the need for primary
system reinforcement, facilitating the adoption of these technologies without delay.
Low Carbon Transport through electric vehicles
The rapid uptake of low emissions electric vehicles will have implications for energy
security, with increased demands likely to be placed on the grid. Conventional
reinforcement to accommodate short-term spikes for charging may be increasingly
inefficient and costly. Energy storage to accommodate these peaks will ensure that
primary distribution infrastructure does not inhibit the uptake of this technology.
Delivering Benefits
Traditional 11kV reinforcement at the preferred Leighton Buzzard site involves
installation of a third circuit and transformer at a cost of circa £8m, although none of
the system-wide benefits associated with accommodating renewables is realised from
this traditional approach. Further, the delivery time could be several years, particularly
as additional cable routes or overhead lines are required.
Price pressure through economies of scale and investment in R&D is expected to
generally bring costs of many storage technologies down significantly, with some
research expecting up to 40% reductions by 2015. Therefore, once proven successful
and assuming savings on replication (for example project management and
dissemination), the cost of replicating the SNS Method is estimated to also be around
£8m. However comparing this to the Base Case costs of traditional reinforcement alone
does not capture the additional system wide benefits delivered through:
- Simultaneous provision of reserve and response capacity, mitigating costs of
additional generation and facilitating the increase of renewables into the mix.
4MW/16MWh of storage is conservatively estimated to provide additional system-wide
benefits valued at around £200k annually, for example from reserve and frequency
response services - the project seeks to validate this in practice;
- Reducing costs in the generation market by displacing high-carbon peaking plant and
reduced shedding, saving on capital, carbon and fuel costs. Simple displacement of
OCGT using Ofgem's annualised capital cost estimates of £58/kW/yr would yield
c.£230k per annum before any operational savings. This is expected to grow further
as levels of intermittency increase and demand shapes evolve and a study by Poyry
estimates additional gross savings of around £0.8m annually by 2030 for 4MW of
storage;
- The above gross savings include carbon emissions savings of c.1.3kt annually by 2030
associated with displacement of a proportion of CCGT and OCGT by storage
- Faster connection of low carbon technologies for customers without constraints from
primary distribution infrastructure
