The government has slashed the level of subsidies that developers of big batteries will receive to help to keep the lights on, after concluding that the products may not last long enough to prevent a blackout. Ministers have been backing the development of giant lithium-ion batteries, which can help to balance supply and demand on the grid by storing surplus electricity for use at times of scarcity. Most batteries built in Britain can provide their maximum output for only half an hour to an hour, however. New analysis from National Grid shows that a power shortage crisis would be likely to last two hours. As a result, the government said yesterday that it was significantly reducing the level of subsidy that such limited-duration batteries could secure through its “capacity market” scheme. The change could make it harder f or some proposed new batteries to go ahead, as generally they are not commercially viable without some sort of subsidy. Ministers said that it would “reduce the risk of insufficient capacity being secured”. Under the capacity market, energy companies win subsidy contracts by guaranteeing to provide a certain amount of power capacity in a system “stress event”, when national supplies run low. The costs of the subsidies are passed on to consumers’ energy bills.
Times 5th Dec 2017 read more »
Government reforms of the Capacity Market, announced today by The Department for Business, Energy, and Industrial Strategy, will limit the amount of innovative new battery storage capacity that will be able to compete in the auction. Commenting on the decision, Frank Gordon, Policy Manager at the Renewable Energy Association said: “The Capacity Market is an ever more crucial mechanism for delivering battery projects, which underpin the additional electricity system flexibility that is so urgently needed in the UK. “The changes unveiled today are slightly less drastic than those first proposed but could make it harder for a number of battery storage projects to compete. Storage projects over four hours duration, such as flow batteries that can hold power for longer lengths, will see no change from the decision. “One cannot forget that this is one of many recent changes that are undermining the growth of this sector. Recent revisions to “embedded generation” payments slashed the support that small-scale, distributed generation receives and there could be more pain for the sector in future grid payments reform. Considering the Government research and development funding going towards batteries at the moment and the drive to encourage future battery manufacturing it seems strange to undermine the development of a battery storage market. “The timing of these changes is our main criticism however. As they are being applied in the midst of an on-going auction process it akin to changing the rules of a football match at half-time.”
Renewable Energy Association 4th Dec 2017 read more »