UK battery storage sector can thrive with better policies, report finds

A new report estimates that 12GW of subsidy-free battery deployment could be possible in the UK by 2021, despite only 0.6 GW of capacity being installed and operational so far, but only if the Government learns from past failings in the solar market.

Launched by the All-Party Parliamentary Group (APPG) at it’s Winter Parliamentary Reception in the House of Commons, the report notes that the UK has a unique opportunity to become a leader in energy technology, providing it doesn’t underestimate the benefits like it has done with certain renewable energy generation technologies.

The UK has moved to back renewable electricity and electric vehicles (EVs) in recent months. The latter is set to act as an integral market for the Government’s Industrial Strategy, while renewables such as offshore wind set record low strike prices in the recent Contract for Difference (CfD) auction.

However, the Renewable Energy Association (REA), the authors of the new report, argue that these two markets need to be backed by a prosperous energy storage boon. Specifically, the report notes that promoting the growth of battery storage to 12GW of capacity would improve energy security and support domestic manufacturing and export opportunities post-Brexit.

“Most people in the UK know the story of renewable energy technologies such as solar and wind, the price of which has collapsed globally due to international supply chains and Government support,” the REA’s chief executive Dr Nina Skorupska said.

“The UK Government and many in the industry significantly underestimated how cheap and popular solar PV was to become. The technology and deployment patterns for battery storage and solar PV are similar, and this report is intended to drive big thinking and put the UK on the front foot, rather than react after-the-fact.”

Despite the potential of battery storage, the REA claims that current policy signals would create a “medium deployment” scenario of 8GW by the end of 2021. A low-deployment scenario - a likely occurrence if minimal regulatory change occurs – was also examined, with the report finding that just 1.7GW would be installed in the same timeframe.

The report notes the similarities in public opinion and potential cost reductions that battery storage shares with solar. In 2011, Ofgem predicted that less than 7GW of solar photovoltaics would be deployed by 2030 in the UK. However, tumbling costs and economic benefits for consumers saw 12GW deployed by 2016. The report calls on regulators and policymakers not to underestimate battery storage in a similar fashion.

Renewables account for nearly 126,000 jobs in the UK, but the report claims that the UK has “missed the opportunity” to become a technical and manufacturing powerhouse in this area. With Bloomberg New Energy Finance (BNEF) estimates suggesting that battery prices have fallen by 73% since 2010 – and will more than halve again by 2040 – the report calls on the UK Government to push for an ambitious deployment strategy.

In fact, the new report is already more optimistic that the National Grid’s – which gave half of its Enhanced Frequency Response tender contracts to battery storage project last year – forecasts of a 10GW deployment by 2050.

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