UK capacity auctions: The future of energy storage

Last week auctions for the capacity market scheme took place in an attempt to secure the future of the UK’s electricity supply. The Government has decided to close all coal power stations by 2025, cutting the UK’s power supply dramatically. Therefore there is a need to secure power supply for the future, from a variety of sources to shift dependence from coal power. The majority of bidding ended in funding for storage facilities across the UK, and Demand Side Response schemes for delivery in the early 2020’s.

The bidding process began back in 2014 with the vision of opening up a market place environment, where companies could build proposals that will come to shape the future of the UK’s energy supply. Participants included significant national energy representatives such as Drax, SSE and Centrica. Drax’s proposal set out to install OCGT (Open Cycle Gas Turbine) plants across the country for rapid response during periods of increased demand. SSE pitched to install biomass plants at the existing coal fired power plants. Centrica proposals were centred on the idea of storage, setting out plans to conserve energy when demand is low, to use when required.

One of Centrica’s biggest wins was to introduce a new battery storage facility in Cumbria. This 49MW facility is one of the largest of its kind in the world. Further funding went towards backing a new 370MW combined cycle gas turbine at King’s Lynn in Norfolk. Additional storage was awarded to Centrica at other existing facilities. 

The majority of funding went towards increasing storage, and to DSR services, however many industry experts have suggested that this does not help to strengthen or secure the UK’s future energy supply. Some have explained that a secure system should derive from a variety of energy sources. Business and Energy Secretary Greg Clark said: 

Technological innovation, as part of our low carbon future, will create jobs and opportunities across the UK. We are rebuilding an archaic energy system, bringing forward brand new gas power and low carbon capacity like battery storage to upgrade our energy mix. This is about more than just keeping the lights on. A modern, reliable, and flexible electricity system powers the economy and Britain’s future success.

 

What is being neglected that as stated above, our future energy mix should consist of flexible, reliable energy sources, however increasing storage only re-enforces an aging concept and dependence on gas fired power. While capacity and storage will be improved for help during unexpected increased demand, the source of energy is not renewable.

Jorge Pikunic, Managing Director of Centrica’s Distributed Energy and Power business highlighted:

We’re very pleased to be in a position to make these important investments in new flexible generation and battery storage, which will play a crucial role in securing power supplies and supporting network stability as more renewables come online.

 

Such case studies are plugging the gap between coal coming off line and renewables coming online through the CfD scheme. This is highly advantageous for the UK to have such resources at our disposal as we make the transition from brown to green sources of energy. 

 

 

 

 

 

Sources: Reuters, Energy Live News, Financial Times, Energy news Live, Centrica Storage Ltd, Engie, SSE, Gazprom Energy, Npower (RWE)