Value stacking key for battery energy storage growth in UK
The white paper from the UK solution providers GridBeyond and Thrive Renewables reports an increase in the investor appetite for storage due to factors including the high energy prices along with capacity market auctions, new frequency response products and local flexibility tenders.
However, understanding the market and how it will alter over these assets’ lifetimes is crucial to maintaining its attractiveness and commercial profitability, without the risk of oversupply and consequent waning of interest.
The white paper quotes studies from various parties, such as RenewableUK, which found that the total pipeline of battery projects had doubled from 16.1GW a year ago to 32.1GW and operational battery storage project capacity has grown by 45% from 1.1GW to 1.6GW.
National Grid’s future energy scenarios projects requirements for battery storage between 8-17GW by 2030 and 20-43GW by 2050.
The white paper states that currently in the UK batteries can generate revenues in markets including frequency response, the capacity market, the balancing mechanism and wholesale market trading. But the markets are changing and how and where revenues can be stacked and optimised across the time frames from day-ahead to real time will be key to the business case, both in the current market conditions and into the future.
The white paper also notes that co-location of storage with renewables are becoming commonplace and also can increase project value.
Market forecasting, revenue stacking, dispatch optimisation and auction bidding strategies are all key in ensuring battery storage assets achieve their full value potential, says the white paper, pointing to the need for artificial intelligence to manage these complexities with the multiple data streams within the requisite timescales.
