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Large market for energy storage in UK's net-zero emissions system

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A battery array managed by energy startup Limejump in the U.K., where emissions targets could spur growth for storage technologies.
Source: Limejump

Achieving the U.K.'s targets for reducing emissions will open a large market for balancing technologies from quickly dispatchable batteries to low-carbon backup supply and seasonal hydrogen storage, according to an analysis by consultancy Aurora Energy Research.

Reaching the net-zero target the U.K. passed into law earlier this year will need a surge in low-carbon power generation from renewables, likely alongside new nuclear plants and carbon capture and storage technology, the Committee on Climate Change, which advises the government, said earlier this year.

As more power is consumed by electrifying sectors such as transport and heating by 2050, Aurora forecast that wind and solar capacity will have to increase to 140 GW, from 33 GW today, alongside new nuclear capacity and gas-fired power plants with carbon capture technology. Balancing the variable output from renewables will naturally open a large opportunity for storage technology, with potential for at least 30 GW of batteries alone, according to the consultancy.

"Wind and solar, and particularly wind, are unpredictable," Ana Barillas, principal at Aurora, said during a presentation of the analysis Oct. 14 in London. Barillas said that in its study, Aurora focused solely on system needs and ignored the current economics of various storage technologies.

However, "The key takeaway is that we will need a lot more flexibility in a world [with] high renewables," Barillas said.

Other countries in Europe, including France, have already passed similar net-zero legislation, and many others are supporting an EU-wide 2050 target, which has so far been scuttled by opposition from a small group of Eastern European countries.

In Britain, decarbonizing the whole economy will require significantly more storage capacity to match supply and demand by quickly ramping up dispatchable generation while also storing excess capacity for long periods of time, Aurora said.

About 0.6 GW of grid-scale batteries are already online in the U.K., according to the consultancy. Batteries and demand-side response have squeezed out other technologies in tenders for firm frequency response held by system operator National Grid over the last two years. Volumes delivered by batteries and aggregators have also risen strongly in the balancing mechanism, Britain's core flexibility market.

Although some revenue streams for grid-scale storage have dwindled, distribution network operators have started directly procuring flexible capacity as an alternative to building additional network infrastructure.

Gigawatts of storage needed

Balancing variable renewables output and increasingly volatile demand on a daily basis will require up to 30 GW of short-duration storage by 2050, Aurora calculated. This could come from pumped hydropower or batteries, much of it likely provided by lithium-ion technology, where the development of electric vehicles is driving rapid cost reductions.

Batteries could also start to provide additional grid services beyond the very short-term response they are known for, said Marek Kubik, market director at Fluence, a storage solutions provider owned by Siemens AG and AES Corp.

"As costs fall, six-, seven-, eight-hour battery storage will be very feasible and very economically competitive against a broad range of technologies," Kubik said during a panel discussion at the Aurora event.

By 2050, Aurora also sees the need for about 8.5 GW of fast-ramping generation that can spring into action in less than 30 minutes. In addition to lithium-ion batteries and demand-side response, this could be met by younger technologies such as vanadium flow batteries.

At the same time, the surge in excess renewables capacity, particularly from the U.K.'s growing fleet of offshore wind farms, will open a market for seasonal storage, producing hydrogen through electrolysis, for example, which can then be used for decarbonized heating and transport or converted back into power.

Despite the additional capacity from nuclear and wind, managing longer cold and windless spells in the winter will still require about 21 GW of firm backup capacity to ensure supply security, according to Aurora. This could present the largest challenge in a net-zero world since that function is now filled by combined-cycle and other gas turbines, the consultancy said. Although less polluting than coal, these plants still emit carbon.

"Balancing a net zero power system will require low carbon forms of flexibility which are not yet commercially viable to be delivered at a large scale," said Richard Howard, Aurora's research director.

"Government will need to intervene to bring these options to fruition — through carbon pricing, and technology-agnostic flexibility markets to drive competition and innovation," Howard said.