Aggregator Flexitricity recently signed a 15-year deal to manage that CHP output within balancing markets, which it said would earn the council around £1m over the contract.
The council-owned Gateshead Energy Company aims to generate significant income from current and emerging markets via the speed of response of the batteries.
The battery facility, consisting of six units with a minimum response time of 140ms, holds the equivalent of one million AA battery cells. It is capable of storing enough power to meet the needs of 3,000 homes for one hour.
The facility can absorb or discharge power depending on local demand. The units will typically be discharged when required by National Grid, to maintain the frequency of the grid at 50Hz, and can also be used to manage peak power demand, or store excess electricity, for the Gateshead District Energy Network. The system absorbs or discharges power depending on local demand.
Centrica says it will operate the system to provide various grid balancing services, generating revenue for the council, on a ten-year contract. The company added that the system will also, eventually, provide local grid balancing services, which is where many analysts believe significant future value lies for battery storage investors.
The facility is set to be commissioned later this year.
Supporting National Grid
John McElroy, Gateshead Council’s cabinet member for environment and Transport, said: “This battery installation completes the wider District Energy Scheme, which will provide low cost heat and power to homes, organisations and businesses in central Gateshead.
“It’s a bold, imaginative scheme that means we can also store and release power when we choose, as well as supporting the National Grid, which helps raise more income to support Council services.”
Alan Barlow, UK&I Director for Centrica Distributed Energy and Power said: "The Gateshead Energy Centre is a ground-breaking scheme and an impressive demonstration of how distributed energy solutions can generate cost savings, strengthen resilience, by bringing together battery storage and other energy technologies."
The battery storage scheme builds on a long-term energy partnership between Gateshead Council and Centrica who have installed 2MW of solar panels on 34 public buildings in the town already.
The business has also separately installed CHP units at five council-owned leisure centres including Gateshead, Heworth and Dunston Leisure Centres.