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11

June 24, 2015

Energy Storage Takes the Global StageWhat’s the Value Proposition for Your Region?

A UK Perspective – Presented by Dr. Matthew Rowe

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Overview

Energy Storage – A UK Perspective

An Overview of Current UK Energy Storage Projects

UK Funding Streams and Opportunities

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UK Energy Storage Business Models

Projects of Interest

The Future of Energy Storage in the UK

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Energy Storage – A UK Perspective

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The UK market is poised for an energy storage evolution

One of the ‘eight great technologies’ which will propel the UK to future growth

In the past 24 months, more than £80m of funding has

been committed to support

research in energy storage

In the EU the UK is leading in terms of the investment made and the number of smart grid

demonstration projects

‘2000 MW of new storage by

2020’ would provide annual savings of ~£120

million/year

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Example Energy Storage Projects in the UK, Capacity ~ 25 MWh

44

L

BP

P

P

P

B Batteries 100 kW / 200 kWh

Pumped Hydro

Batteries 250 kW / 500 kWh

Liquid Air 0.3 MWh

Pumped Hydro

Pumped Hydro

Pumped Hydro

BB

Batteries 1 MW / 3 MWh

Batteries 2 MW / 500 kWh

BBatteries 90 kW / 216 kWh

B Batteries 250 kW / 200 kWh

B Batteries 50 kW / 100 kWhBBatteries 2.5 MW / 5 MWh

BBatteries 75 kW / 75 kWh

B Batteries 6 MW/10 MWh

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Funding Streams

5

DNOs / TSOs IndustryAcademia

LCNF (£500 million over 5 years)

Now superseded by the NIC (£27 million annually) and NIA funding streams

The Energy Systems Catapult

£14 million invested by the ETI to demonstrate pumped heat energy storage

£30 million – investment from the EPSRC into grid scale storage to develop five academic centres across the UK.

£15 million awarded by DECC to 4 consortiums via the Energy Storage Technology Demonstration Competition

£4 million fund for the establishment of a SuperGen Hub in Energy Storage managed by the EPSRC

Public Sector Funding (excluding the above)

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Business Models

6

Operated by….

Financed and/or Owned

by…

Utilised for….

Network Operators Market Participants

Network Support Alternative Revenue

Streams

Network Operators Other Participants

Breaking down an energy storage business model

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Examples of potential energy storage business models (business models found in operational UK projects to date are highlighted)

Ownership Operated by Utilised for

Network operator

Independent(Investors and

Market Participants)

Consumer(End User and Community)

Network Operator

Other Participants

Network Support

Other Commercial Revenue Streams

Behind the meter Consumer

ü     ü   ü    ü     ü   ü ü  ü       ü ü    ü       ü ü ü  ü     ü ü ü ü  

   ü   ü   ü      ü   ü   ü ü    ü     ü   ü    ü     ü ü ü    ü     ü ü      ü   ü ü ü ü       ü   ü     ü    ü   ü   ü ü

ü ü ü ü ü ü

Business Models

UK regulatory barriers restrict certain business models

Note: The energy is currently settled in a variety of ways across the business models

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Examples of potential energy storage business models (business models found in operational UK projects to date are highlighted)

Business Models

Ownership Operated by Utilised for

Network operator

Independent(Investors and

Market Participants)

Consumer(End User and Community)

Network Operator

Other Participants

Network Support

Other Commercial Revenue Streams

Behind the meter Consumer

ü     ü   ü    ü     ü   ü ü  ü       ü ü    ü       ü ü ü  ü     ü ü ü ü  

   ü   ü   ü      ü   ü   ü ü    ü     ü   ü    ü     ü ü ü    ü     ü ü      ü   ü ü ü ü       ü   ü     ü    ü   ü   ü ü

ü ü ü ü ü ü

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22

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UK regulatory barriers restrict certain business models

Note: The energy is currently settled in a variety of ways across the business models

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Locating Storage with Renewables

Renewable Source

Renewable Source

Storage

Meter

Meter

Meter StorageRenewable

Source

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Potential Revenue Streams

Renewable Source

Renewable Source

Storage

Offtaker

Revenue via energy payments (Variable Fee)

Ancillary Services (Frequency and Reserve products from the TSO) National

Grid indicates possible revenue of ~£50,000/MW/year

PPA

Contracts with Network Operators

Trade on the spot market

?

Revenue via availability payments (Capacity and Fixed Fee)

Revenue via energy payments (Variable Fee)

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Two Projects of Interest

Smarter Network Storage

Kilroot Energy Storage

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Projects of Interest

Smarter Network Storage Kilroot Energy Storage Location: Kilroot conventional power station near Belfast (Northern Ireland)

Funding: Support through the Energy Catalyst Market Innovation funding

Storage: 100 MW

Goal: Smoothing the intermittent output

from wind. Helping Northern Ireland meet policy

goals while reducing the cost of energy for electricity customers.

System savings of €11m/yr and 123kt CO2.

Improve flexibility of the power system managed by the System Operator of Northern Ireland.

Status: 10 MW expected operational in second half of 2015

Location: Leighton Buzzard Primary Substation

Budget: £13.2 million from the LCNF, £4 million UK Power Networks and £1 million Project Partners

Storage: 6 MW/ 10 MWh Li-ion battery

Goal: Commercial learning, developing business cases for the integrated use of storage. Frequency regulation, peak shaving, reactive power support, defer network reinforcement, overcome intermittency of renewable generation, wholesale market opportunities.Operational since Dec 2014

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Challenges

There is limited experience in the UK of proven business models

There is uncertainty in policy and the regulatory landscape

Regulation will need to change to incentivise energy storage - Professional forums lobbying for regulatory changes

Limited experience in storage as a network connected asset

The high capital cost of commercial storage technologies requires multiple benefits

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The Future of Energy Storage in the UK

The UK market is poised for an energy storage evolution

DECC have recently created a new department which covers Energy Storage and Demand Side Response

Recent studies and projects have shown significant opportunities for energy storage in the UK

Watch this space…

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Contact Our Energy Storage Experts Today!

Dr. Martijn Huibers Richard Fioravanti Dr. Matthew Rowe

Contact us:energyadvisory.energy@dnvgl.com

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www.dnvgl.com/energystorage

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