Batteries – Ready or Not?

Nik Holland, Kinect Energy’s Consultancy and Market Analytics, Team Lead, explains the pros and cons of battery storage and what you need to know if you’re considering investing.

Batteries continue to be discussed as a potential saviour for businesses looking to decrease their reliance on electricity networks in general and fossil fuels, in particular.  Whilst the technology is still currently in its relative infancy, battery storage will become an important part of global plans for a zero-carbon future.  But are they a suitable option for businesses?

Regardless of whether it is generally a good fit with a business, each application should be considered by experts, on its own merits, to understand whether the installation of a battery is technically and financially feasible in each situation.

With Kinect’s clients spanning all four corners of the globe, we need to work on each instance to understand the individual requirements and technical issues facing our customer, to provide the best solution each and every time.

Alongside battery storage is the drive to a zero-carbon economy.  This means that there is a requirement to remove harmful fossil fuels from the generation mix, and replace them with less reliable renewable generation sources, such as Solar and Wind.  The use of such renewables alongside battery storage has also provided a huge amount of press coverage, leading this to be something of a “buzz term” currently.  It also provides an extra layer of confusion where battery storage is considered.

The power of batteries – what can they do for end-users?

So why are end-users of all sizes and grid operators looking to invest in battery storage? 

1.       Optimise the use of self-generated energy;

2.       Provide Demand Side Response (DSR) services;

3.       Resilience against grid outages;

4.       Provide large scale grid resilience.

Each of the four scenarios above would seem to be more suited to a particular area of the market. Domestic users may well find some use for the ability a battery gives to store energy generated on-site during periods where the power is not being used.  Solar panels, for instance, generate mainly during the day, when a house may well be empty. If the power is stored in a battery, this can then be used overnight when there is occupation but no sunlight. This optimises the use of renewable power generated locally, reducing that homes carbon footprint.

Larger installations may be able to use a battery to help provide DSR services such as Fast Frequency Response, Capacity Market services and TRIAD avoidance. In these instances, the battery could store either energy generated on-site, or even grid-supplied energy in periods of low demand, to be used during a DSR period. The energy stored does not have to be renewable, and in fact is unlikely to be so, even if the battery is paired with such technology. This is because most renewable installations on industrial and commercial sites are likely to be sized to the site’s demand requirements – if they are that big.  Therefore, the opportunities to charge the batteries using on-site renewables will be much lower.

All of the same issues apply to using batteries as a resilience to grid outages.  There is also the added issue of the size of battery required to provide the resilience you are looking for.  In effect, this is nothing new.  Many companies have some sort of Uninterrupted Power Supply (UPS) system in place to allow a site to turn off.  This is a battery.  Scaling this system up to move from giving you time to turn off everything safely, to entirely powering a site, will significantly increase the cost, complexity and physical space required for the battery.

At the far end of the scale, grid operators are also finding uses for ‘big batteries’ to provide resilience at a grid level against power outages, and peaks in demand. UK Power Networks (UKPN) recently ran a two-year trial of the largest grid-scale battery, increasing it from 6MW to 10MW. This ‘big battery’ can store energy when demand is low, releasing it back to the grid at peak times.  It has the potential to transform the energy grid, having the capacity to power 6,000 homes at peak times for one and half hours, roughly 1,100 homes for a whole day, or 27,000 homes for a full hour when demand is lower.  Whilst this sounds impressive, at an industrial scale, it is relatively small beer.  This battery could cover a car manufacturing plant for maybe an hour – and at a reported cost of £18.4 million, this is unlikely to be of interest to a commercial entity.

It is also theoretically possible to use batteries for price arbitrage – storing energy during the night when it is relatively cheap and using it during the expensive daytime hours. Again, it is likely that any installed battery system could only provide a small amount of the required demand each day, and given the current prices for batteries, it may be difficult to make the economics work.

Looking ahead - the future of batteries

Storing power in a battery may make it possible for businesses and domestic consumers to make more use of on-site renewables, provide some resilience against system outages and participate in DSR activities, but for each installation there is no guarantee that any of the above can be made economically viable.  Kinect would advise interested parties to always seek a full consultation with a qualified energy consultant to fully ascertain the commercial feasibility and potential advantages.  

Looking forward, it is clear that batteries will be part of the myriad of solutions that help move the planet to a zero-carbon economy, but for today, it is likely to be grid operators and national governments that are looking to invest as part of a range of options to ensure grid resilience. This will drive the future of batteries far more than the move to renewables, which is happening anyway as we strive for zero-carbon emissions.

At Kinect, we empower businesses to make the right energy decisions for their operation. Our global knowledge, perspective and capability provides local market energy solutions to every kind of business. Talk to us about your energy goals. Our certified consultants have full regulatory knowledge of your sector and have been delivering trusted advice on impactful energy solutions for decades.

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