Posted on: 18/08/2016
In the lead up to the first Enhanced Frequency Response (EFR) auction, we conducted our own survey of battery storage developers. Robert Owens, Vice President Demand Side Management, discusses the insight uncovered by our research.
With battery technology costs falling and the first EFR contracts due to be awarded imminently, interest in battery storage has never been higher. A total of 45 developers completed our recent survey, all indicating they are considering a project within the next 12 months.
The results of the survey are available in our “Making the commercial case for battery storage” report - download here.
Almost nine out of ten battery developers said they had high levels of confidence that battery projects were viable and they see storage as playing an important role in contributing to a secure electricity future.
The challenge for these market players appears to lie in translating confidence into commercial reality. They are investigating a number of different revenue streams to make their storage projects economically viable.
Almost 70% of the battery innovators indicated that the biggest revenue opportunity they were looking to employ would come from grid services such as EFR contracts. However, these contracts are limited and at a maximum of four years, fall short of the 5-10 year payback timeline expected by more than half of survey respondents.
It’s clear that the current EFR capacity in isolation will not be enough to unlock the full potential of batteries and at the moment, there is no clarity about further frequency response mechanisms for the projects that are unsuccessful in this auction.
National Grid needs to reassure these pioneers that there will be more revenue streams available for them in order to secure the battery capacity we need for the “smart power revolution”.
To find out more about the opportunities and challenges for battery pioneers, download our “Making the commercial case for battery storage” report or read about case study about UK Power Networks' 6MW battery.