Halfway through 2018 and large-scale battery storage in the UK has reached over 450MW installed capacity, with around 250MW being completed this year alone. This is made up of projects bigger than 1MW, including larger behind-the-meter projects that have begun to emerge.
The past few weeks have seen a flurry of activity with supply contracts being awarded, projects changing hands as well as those being completed. With sites under construction from the likes of Centrica, Anesco and Ørsted, and when projects from UK Power Reserve recently awarded to Fluence are factored in, it seems very like that the capacity installed in 2018 could reach over 500MW.
After a slow start to the year, which saw FFR (Firm Frequency Response) prices falling and Capacity Market revenues become more difficult to access, it looked like energy storage could be cut off before it had really got started. However, the energy industry is never one to sit still and immediately companies started discussing the opportunities in behind the meter storage, which is much less vulnerable to fluctuations in external revenue streams by providing wider benefits to the site owners.
The pipeline which we have been tracking for the past two years has reached over 8GW and we are now seeing the successful completion of projects proposed back in 2016 as more continue to add to the total pipeline.
Development timelines are also being reduced, with some projects only submitted into planning in the second half of 2017 already completed. Compare this with the two years it has taken for Enhanced Frequency Response (EFR) projects to come through and it’s plain to see just how quickly the industry is bringing new projects forward.
Uncertainty continues from the top
As always there is a degree of uncertainty in the sector from policy and regulation – summed up by last year’s Capacity Market being derailed for many developers by the changes to de-rating. At the same time the increased number of battery projects available to provide frequency response services has caused the prices being offered for these services to be reduced.
However, the System Needs and Product Strategy (SNaPS) work being undertaken by National Grid has offset some of this. There has been cause for some optimism owing to signals from National Grid that changes made through SNaPS will simplify the process for projects to be able to bid into its tenders, while opening up services that were previously not accessible to battery storage.
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