蓄势待发：储能机遇（英）-2023.6-41页_4mb

Energy Storage Opportunities in the UK

Background

Energy storage plays a critical role in balancing the UK's electricity grid as the share of renewable energy increases. The UK energy market is currently dominated by short-duration storage, mainly Lithium-Ion (Li-Ion) batteries and pumped hydropower, but longer-duration storage will be needed as renewable penetration increases. Long-duration storage technologies like compressed air energy storage (CAES) and novel flow batteries are supported through programs like LODES, but incentives for 'seasonal' storage remain limited.

Revenue Streams

The main revenue streams for energy storage assets in the UK include:

• Wholesale power arbitrage (storing energy when cheap and exporting when expensive)
• Balancing Mechanism (adjusting supply to balance electricity demand)
• Frequency response services (maintaining grid frequency)
• Capacity Market (long-term security payments)

Battery assets with shorter durations (0.5-1hr) primarily participate in frequency response, while longer durations (2-4hr) target arbitrage and Balancing Mechanism markets. Sophisticated trading strategies that stack multiple revenue streams are essential.

Challenges

Key challenges include:

• Grid connection delays (assets face up to seven-year waits)
• Raw material and manufacturing supply chain constraints
• Market saturation risks reducing revenue from ancillary services
• Revenue volatility and limited contract certainty

Opportunities

Future opportunities include:

• Pathfinder programs offering additional revenue streams
• Co-location of storage with generation assets to reduce connection times and costs
• Development of long-duration storage through policy mechanisms like cap-and-floor regimes
• Role of REMA (Review of Electricity Market Arrangements) in shaping market structures

Key Considerations

Investors and developers should consider:

• Market access and offtaker experience
• Revenue stack design and risk allocation
• Grid connection variables
• Warranty and performance software
• ESG considerations including supply chain due diligence

The UK energy storage market is expected to continue growing, though faces challenges from grid access, supply chains, and market maturity. Long-duration storage will become increasingly important as renewable penetration increases, while co-location presents commercial opportunities.