The recent announcements by the UK Government of an investment programme for energy storage and the publication of the results of the Smart Systems and Flexibility plan represent a watershed moment for the electricity storage sector and, subsequently, for the wider renewable energy generation market.
The details of the announcement can be found on the Department for Business, Energy and Industrial Strategy website.
It was good to see so many of the recommendations by our friends at the Electricity Storage Network being incorporated into the announced plans for the regulatory framework for networks, markets and the creation of a more flexible energy system.
The increase in funding for smart technologies innovation (up to £70m from £50m) in addition to the £246m available from the Industrial Strategy Challenge Fund is welcome but the most significant impact the announcements are the policy clarity and standard definitions that will remove much of the uncertainty that has held back the sector for many years.
One of the key clarifications is that the Electricity Act 1989 will be defined in policy terms so storage will be explicitly defined as a sub-set of generation. Ofgem is also seeking to address the “double charging’ of network costs, with the presumption that storage should not be charged residual charges at transmission and distribution level. By the summer of 2018, Ofgem has also promised to introduce a modified generation licence for storage.
The changes will have a significant positive impact on the commercial viability of storage projects, although implementing the changes effectively and efficiently will still require great clarity and commitment.
Of course, there is always a significant gap (both in timescales and actual results) between expectation and reality when such announcements are made, but the generally positive industry response the government proposals have had so far should give us all with an interest in the wider energy systems real encouragement that yet another barrier to the adoption of renewable energy as a significant part of the energy mix appears to be shrinking.
