In this live panel interview about energy storage, Engerati invited three guests to the live studio at European Utility Week 2014: Stephen Jones, Sales Director, S&C Electric; Frank Baumann, Sales Director Energy Storage, Samsung SDI; Anthony Price, Director, Electricity Storage Network.
Reducing energy storage market price
The panel discusses the various types of storage solutions and how to bring the market price down. These include batteries, flywheels, different types of batteries, compressed air solutions, and liquid air, to mention a few.
Price points out that these solutions are not necessarily competing with each other since they are all part of a big spectrum of opportunity – each has its own parameters and is applicable for different applications.
Jones says the storage solutions are changing, however batteries are the main focus right now since these have been tried and tested. But what is clear is that the grid is changing and the whole grid is being affected. “The different technologies will be applicable all across the grid. There will also be a greater need for smaller distributed storage solutions for microgrids.”
Storage – economical justification
To make an energy storage solution financially viable, Jones explains that it is not uncommon for technologies to be mixed to provide a number of applications. There could be a primary reason for the storage to be implemented and then there are services that must be included which will be of benefit to the utility. Each application has a specific value, and these values must be added to create a justifiable case. People are looking for the right combination of technologies to create value, he explains.
However, Price notes, what is upsetting the storage community in several jurisdictions such as UK and in many parts of Europe, is that they would put in the storage and another party would get the benefit and they wouldn’t get paid for it.
According to Baumann, the incentivisation of lithium-ion batteries is improving the business case for these solutions, moving them to a positive range. He adds that the increase in volumes will also eventually bring the costs down and business cases will become even stronger and installations will increase.
Regulation needed to develop storage
There are a lot of applications where storage can be useful but they require a regulation change, explains Jones. If regulation is unlocked, there could be a good business case for storage and there will be a return on investment. “There have been many projects implemented but in reality a lot of them are funded by regulators from all around the world. While we are keen to learn from funded pilot projects, we also need to create a business as usual. The only way this will happen is through regulatory change.”
Price comments that the intention to change the regulatory framework is there in Europe. Directives states that energy storage should be recognised as a separate activity, and instructions have been given that distribution and transmission companies should view storage as an acceptable part of their assets. However, while the intention is there, the implementation is behind.
Price continues that the implementation of storage is not helped if the business case indicates that the cost of storage is higher than alternatives. This is due mostly to the fact that whole-life costing is not being calculated. The benefits of storage must be recognised as a demand and a generator at the same time to see its value.
Baumann says that storage technology appears to be moving faster than the regulatory framework and in Europe it is necessary to define whether storage belongs with the TSO or DSO. “The regulatory framework needs to be ready for the lower costs of the next one or two years,” states Baumann.
Updated on 27 November 2014