Growth in electricity generated from renewable sources results in an increasing need to manage network constraints. In February 2021 we launched our Constraint Management 5 Point Plan, which included a commitment to work with an external consultant to understand the role of storage in managing constraints.
We invited consultants to send us evidence of their capability to do the work and in parallel we invited industry stakeholders to comment on the Draft Scope of Work. The feedback we received was incorporated into the Final Scope of Work and a shortlist of preferred bidders were invited to submit proposals. We selected DNV Services UK Ltd to perform the technical analysis and we worked with them from August to December 2021.
This analysis is now complete, and the key messages of the conclusions we reached are listed below. For more detail on the conclusions we reached, you can read our Storage for Constraints thought piece and for more detail on the analysis DNV performed you can read the Storage for Constraints summary report.
1. In a net zero world, the electricity system looks very different to the one which we have today.
The Government’s target of net zero by 2050 is driving the biggest change in energy technologies since the industrial revolution. The electricity network we have today was built for a centralised system with a generation mix predominantly made up of large, dispatchable, synchronous generation. Tomorrow’s energy system will see increasing amounts of transmission connected renewable generation, changing consumer behaviour patterns, and more decentralised, embedded generation. We need smarter, flexible technologies to help manage the inherent variability we get from renewable generation connected to the transmission system.
2. Energy storage is an essential part of the electricity system transition to net zero.
Our Future Energy Scenarios indicate that significant volumes of energy storage will be required to efficiently manage growing variability in electricity generation and demand, as we decarbonise the energy system. We see storage as a technology that can provide the electricity system with a range of different zero carbon services.
Storage is already the main technology used to provide the grid with very fast frequency response services, and we expect this role to continue to grow. Some storage technologies can also provide other balancing services such as helping manage voltage and inertia. As renewable generation continues to displace traditional dispatchable generation, we see storage playing a role in shifting electricity from when it is generated to when there is the demand for it. As electrification of heat grows, winter electricity demand will increase, creating a new role for inter-seasonal storage which can store larger amounts of electricity for longer periods of time.
3. Whilst storage has value in other markets, our analysis indicates that using storage exclusively for constraint management would be uneconomic.
Operating energy storage exclusively for constraint management leads to low utilisation because for most of the time, the storage is in the wrong state of charge1 or the wrong location to alleviate the constraint. This low utilisation would make it very difficult for current storage technologies to recover their costs and be a more economic option for consumers than other constraint management solutions.
4. Combining constraint management with other services is possible, which would improve the economics, but it may be difficult
Most of the transmission system services that storage can provide can be combined with constraint management services. This indicates that the utilisation of storage providing constraint management could be improved. However, many balancing services cannot be usefully delivered from behind an active export constraint, which may limit the utilisation of storage at the most constrained locations.
5. In the long term, additional transmission infrastructure is the best way to minimise constraint costs. Until then, we are continuing to explore other ways to reduce constraint costs for consumers.
The best way to realise the full benefits of renewable energy generation and to reduce network constraints is to rapidly build additional transmission infrastructure, alongside new technologies and commercial solutions, so that the energy generated can be transported to where it is needed. However, we understand that new network infrastructure isn’t something that can be built overnight, so in the short to medium term we are continuing to work with stakeholders to identify new and innovative ways to reduce network constraints and minimise costs to consumers. Our 5-Point-Plan sets out some of the other options we are looking at to manage constraints.
If you have any further queries about the project, you can contact us at [email protected]
5-point plan to manage constraints