This project aims to understand how novel energy storage technologies might best be integrated into an evolving, lower-carbon UK energy system in the future. It will identify technical, environmental, public acceptability, economic and policy issues, and will propose solutions to overcome barriers to deployment.

As electricity is increasingly generated by highly-variable renewables and relatively inflexible nuclear power stations, alternatives to the use of highly-flexible fossil-fuelled generation as a means of balancing the electricity system will become increasingly valuable. Numerous technologies for storing electricity are under development to meet this demand, and as the cost of storage is reduced through innovation, it is possible that they could have an important role in a low-carbon energy system. The Energy Storage Supergen Hub is producing a UK roadmap for energy storage that will be the starting point for this project.

The value of grid-scale storage to the electricity system has been assessed for some scenarios. For extreme cases comprising only renewable and nuclear generation, the value is potentially substantial. However, the value of energy storage to the UK depends on the costs and benefits relative to sharing electricity imbalances through greater European interconnection, demand-side electricity response, and wider energy system storage, and the optimal approaches to integrating energy storage at different levels across the whole energy system are not well understood. This project will take a broader approach than existing projects by considering energy system scenarios in which storage options are more integrated across the whole energy system, using a series of soft-linked energy and electricity system models. Demand-side response and increased interconnection will be considered as counterfactual technologies that reduces the need for storage.

Three broad hypotheses will be investigated in this project: (i) that a whole energy system approach to ES is necessary to fully understand how different technologies might contribute as innovation reduces costs and as the UK energy system evolves; (ii) that a range of technological, economic and social factors affect the value of ES, so should all be considered in energy system scenarios; and, (iii) that the economic value of the difference between good and bad policy decisions relating to the role of energy storage in the transition to low-carbon generation is in the order of £bns.

A broader, multidisciplinary approach, which extends beyond the techno-economic methodologies that are adopted by most studies, will be used to fully assess the value of energy storage. This project will therefore also examine public acceptability issues for the first time, compare the environmental impacts of storage technologies using life-cycle analyses, and examine important economic issues surrounding market design to realise the value of storage services provided by consumers. All of these analyses will be underpinned by the development of technology-neutral metrics for ES technologies to inform the project modelling work and the wider scientific community. These multidisciplinary considerations will be combined in a series of integrated future scenarios for energy storage to identify no-regrets technologies. The project will conclude by examining the implications of these scenarios for UK Government policy, energy regulation and research priorities. The analyses will be technical only to the point of identifying the requirements for energy storage, with absolutely no bias towards or against any classes of storage technology.

Potential Impact:
Renewable and nuclear electricity generation is expected to have an important role in reducing UK CO2 emissions to achieve the 80% reduction by 2050 enacted by Parliament. Energy storage has been identified as a key potential technology to facilitate this transition. Yet substantial investments in energy storage technologies, and Government policies necessary to support them, are currently difficult to justify because the overall value of energy storage to the UK, and to companies in the supply chain, is opaque. This project will address these issues, which is why the Renewable Energy Association are so supportive in their attached letter and why they have agreed to become project partners.

DECC have specifically identified the "potential contributions to system balancing ...by electricity demand-side response (DSR), smart grids, interconnectors, and ES technologies (including heat and electric vehicles)" as an area in which they need further scientific evidence. This project will examine all of these areas holistically for the first time and will produce useable evidence using models that meet Government quality assurance standards, where possible. Improvements to the UKTM-UCL model from this project will directly benefit Government policy analysis as DECC will use this model as their principal tool for long-term energy system analyses from 2015.

The central and devolved governments will be able to use the insights and the models that we create as evidence to inform policy decisions about the development of the GB electricity networks, in particular policies that minimise energy costs, maximise decarbonisation and avoid unintended consequences such as stranded assets. The potential impact and importance of this project is demonstrated by the decision of DECC and the Scottish and Welsh Governments to become project partners and join the Project Advisory Board.

This project will take a whole systems approach to energy storage and will value energy storage as an integral part of the wider UK energy system. The integrated scenarios that we develop will account for technological, economic, social and other considerations relating to energy storage, and will thus be able to produce practical and viable plans for energy storage investments with demonstrable value across the supply chain. Electricity generation and network companies will be able to use the tools that this project creates to inform investment decisions, which is why SP Energy Networks, who own GB transmission and distribution networks, are partners of this project. Electricity network reinforcement is expensive and unpopular with the UK public and this project could lead to fewer new power lines and a more secure electricity supply, which could also improve the public opinion of renewables and accelerate roll-out of low-carbon technologies.

UK consumers are becoming more engaged in the operation of the energy system and already interact with mechanisms such as feed-in tariffs and the Renewable Heat Incentive. It is conceivable that consumers could provide important services to the electricity system in the future through the provision of small-scale energy storage or demand-side response. This project will assess the potential value of energy storage for these purposes and will consider how this value can be realised and rewarded through the electricity market.