SmartestEnergy has urged National Grid to set out a roadmap for batteries within the balancing services market.
Ahead of the results of the first Enhanced Frequency Response tender next week, the energy firm has surveyed commercial battery developers, most of whom will not receive a contract in the EFR auction.
Enhanced Frequency Response is a sub-second method of balancing the electricity grid in response to frequency fluctuations. As the power system loses inertia with the closure of thermal plant, National Grid needs to ensure it can keep the system stable by other means. Batteries offer very fast response times, and so will become increasingly valuable to the system operator.
The first EFR auction is for 200MW, but it was more than six times oversubscribed. Around 1.3GW of interest initially responded to the call, although some of this dropped out when technical and financial requirements were tightened.
Those that do receive contracts will receive four year terms, which are much longer than Grid usually offers, due to the development costs of battery storage, with costs and market barriers still with some distance to fall.
But the remainder will have to gauge whether their projects are viable under the current market structure.
According to SmartestEnergy’s survey of 45 such developers, 70% said the EFR tender was the main revenue stream they were investigating.
Robert Owens, vice president of demand side management at SmartestEnergy urged Grid not to waste the opportunity. Since the turn of the year, he said SmartestEnergy had gone from “people not really talking to us about battery storage to a potential pipeline of 800-1000MW”.
“Such exponential growth is almost unheard of in such a short space of time.”
However, if most of those projects fail to secure EFR contracts, that interest could disappear. Owens thinks National Grid should ensure momentum is maintained and tell developers what is next in terms of route to market.
He also called for collaboration between developers, aggregators and financiers to identify commercially viable ways to get projects off the ground.
“Given that storage is on the brink of commercialisation and has the potential to create transformational change in global energy systems, it is important that experience and best practice are shared in order to advance this sector,” said Owens.
Battery storage is one of the topics covered at Energyst Media’s demand-side response conference in London next month. There are a handful of tickets left for end users looking to provide balancing services. Click here to find out more.