Energy Storage – What’s in Store for Out Electricity Supply

Energy Storage

What exactly is in store for our electricity supply?

Despite the drive to make our homes more energy efficient, the demand for electricity remains strong.  As the traditional generating stations come to the end of their lives and we strive for a lower carbon economy, there is an ever-increasing reliance on renewable sources of power. The costs are coming down, but wind is unpredictable and intermittent and we cannot rely on the sun to provide us with the electricity we demand at the flick of a switch, especially at night.

It looks as though energy storage will need to become an essential part of our electricity supply system if we are to achieve our green goals and keep the lights on. Electricity storage technology can overcome the issues associated with the intermittency of renewables and help to meet the morning and the evening peaks in demand, whether at a domestic, community or national scale.

At present, energy storage capacity in the UK represents a tiny part of our electricity consumption and depends heavily on a few pumped storage hydroelectric facilities. We are otherwise reliant on switching generating stations on and off, or on importing renewable hydropower from Norway to deal with the fluctuations.

Research into battery technology has really taken off. The Government’s January 2017 Industrial Strategy Green Paper (here) states:

Given the UK’s underlying strengths in science and energy technology, we want to be a global leader in battery technology…’

The Government went on to launch a £9 million competition to find ways of reducing the cost of energy storage technologies, including the Faraday Challenge – a £246m commitment up to 2021 on battery development for transport, home and industrial applications.

The costs of storage are reducing as this research progresses.  In its 2016 report to the Renewable Energy Association, The development of decentralised energy and storage systems in the UK, KPMG predicts that there will be a ‘steady cost decline of 12% per annum through to 2020…’ (available here).

At the moment, most of the interest is in lithium-ion batteries and this technology accounted for 83% of installed global storage capacity in 2016 (excluding pumped hydro). The costs continue to fall with close to a 20% reduction in 2016.  Some issues remain with the relatively short life of the batteries and a deterioration in their efficiency as they are cycled through charging and discharging.  The focus could change in the medium term to developments in hydrogen and heat storage that are creating some excitement.

Products are already appearing for domestic use. They are arguably led by Tesla which is building a ‘Gigafactory’ in the US to produce batteries for its vehicles and for other domestic and commercial uses. Once complete, Tesla expects the Gigafactory to be the biggest building in the world, and it will be entirely powered by renewable energy sources. The factory brings an economy of scale that should make batteries more efficient and affordable.

Tesla is already marketing its solar roof tiles and ‘Powerwall’ domestic energy storage systems. These harvest and store electricity produced during the day for use when household demand is greater in the morning, evening and at night.

New Records for Renewable Energy

Renewable Energy

Recently released figures show that 2017 was a great year for energy sustainability in the UK, with record-breaking levels of renewable energy production and historically low prices for electricity generated by the wind. It was our greenest summer ever, with nearly 52% of electricity generation between 21 June and 22 September 2017 coming from low-carbon sources.

For the first time in history, on 7 June 2017, low-carbon technologies (nuclear and renewables) provided more electricity than all of the fossil fuel sources combined (oil, gas and coal).

Another symbolic milestone was achieved on Friday 21 May 2017, the first full day since the Industrial Revolution of the 1880s when no coal was used to generate our electricity, an important step towards the Government’s commitment to phase out Britain’s coal power plants by 2025.

In the offshore wind industry, spectacular progress in turbine efficiency, larger turbine rotor sizes and growing experience with offshore engineering and maintenance technologies have all contributed to huge savings. Government figures show that the price paid for electricity generated by offshore wind farms fell by more than 50% in less than five years. The data suggest that new offshore wind farms that are due to open in 2022/23 will be viable with public subsidies as low as £57.50/MWh, compared with the £92.50/MWh subsidy that was secured for the Hinkley Point C new nuclear power station.

The UK now has the fourth greenest power system in Europe (and seventh in the world), and the British electricity sector has halved its carbon emissions since 2012, a remarkable record. Despite this, the UK is lagging behind schedule for achieving its longer-term carbon reduction targets. Going forward, other sectors will need to match the level of achievement of the electricity sector, and attention is being increasingly focused on transport and agriculture.

There is similar good news from the energy markets around the world. Global renewable energy capacity grew by a record amount in 2016, and nearly 25% of electricity came from renewable sources. Hydropower provided most of this, with contributions from wind and solar at around 4% and 1.5% respectively. 

Solar power is following in the footsteps of offshore wind as an increasingly viable technology, and power supply deals in countries around the world, including Mexico, Denmark, Egypt, India and the UAE, saw renewable energy projects being priced well below fossil fuel and nuclear power alternatives. 

Worldwide, new renewable energy projects accounted for some 161GW of new capacity in 2016 (a 10% increase over 2015 and another new record) at a cost of $242bn, which, despite representing a 23% reduction in investment compared to 2015, was greater than that for fossil fuel generation.  New solar power accounted for half of the new capacity, while wind power added a third and hydropower 15%.