Energy storage could save UK £2.4bn every year

The implementation of energy storage systems could contribute £2.4bn to UK electricity system savings by 2030, but only if a range of 'necessary regulatory reforms' are introduced to steady the UK's energy market, a new report from the Carbon Trust has found.

The report, backed by the Department of Energy & Climate Change (DECC), states that energy savings could reach £7bn annually if the Government adopts energy storage as a central market incentive and combines it with the £5bn market potential of existing and optimised low-carbon generation assets.


The analysis within the report – considered the most comprehensive review of UK energy storage to date – was commissioned by utilities giants E.ON, SSE and Scottish Power. It discovered that a ‘least-cost’ pathway that produced just 50% of the potential savings would equate to a £50 energy bill reduction for every UK household.

Carbon Trust director of innovation Andrew Lever said: “Energy storage has long been seen as a panacea for a low carbon energy sector in the UK, offering a suite of services to balance the system, make electricity networks more efficient and help the UK to meet its carbon targets at the lowest cost. 

“We have now reached a stage where the technologies are looking promising, but will face challenges in deployment due to an outdated market framework. An urgent rethink is needed so we can address and overcome the broken value chain of energy storage, which is essential if Britain is to provide low carbon energy at the lowest cost to the consumer.”

Impending failure

The report states that many of regulatory reforms needed to compliment the uptake of energy storage systems would be cost neutral and provide no burdens to Government funding. But the report warns that failure to implement these changes could create a rigid and under-developed energy system.

The report has called on Government to implement a clear and comprehensive strategy to incorporating energy storage into the market in a flexible manner. Recommendations include the creation of a multi-stakeholder taskforce to develop frameworks, an inter-governmental establishment group and joint industry projects aimed at providing specific cost and performance analysis.  

Commenting on the report, a representative from DECC said: “The Department is investigating the likely barriers to deployment of energy storage and possible mitigating actions, focussing in the first instance on removing regulatory barriers. DECC will be publishing a call for evidence in spring 2016 on this area.

“More than £80m public sector controlled support has been committed to UK energy storage research, development and demonstration activities since 2012. This innovation support is driving down the costs of storage, demonstrating storage in the electricity networks and bringing new storage technologies closer to market.”

By adopting strategies such as the National Grid’s ‘Gone Green’ – which highlights the aforementioned £50 savings – the UK’s energy market could absorb energy and release it at times to suite demand. The report notes that this strategy would complement inflexible renewable sources such as wind and solar.

However, the report has noted that the current incompatible market structure has reduced the commercial attractiveness of energy storage for investors – a point which was echoed by MPs – a factor that could reduce the potential revenue benefit.

Storage warnings

The Government’s archaic approach to new energy methods is at risk of rusting away. But, ironically, rust could in fact be the solution to the energy storage problem.

Earlier this week, the Renewable Energy Association (REA) warned that the UK is at serious risk of missing the requirements set out in the legally-binding fourth carbon budget, due to the ‘Jenga like approach’ to green policy.

Maanwhile, another new report this week stated that British firms are missing out on a renewables revolution that adds less than 1% to power bills drives employee engagement and wins new customers.

Matt Mace

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