Scottish Power has proposed a change to the classification of storage within the capacity market. The energy firm says it is misleading to assume storage such as batteries is as reliable as pumped hydro storage.
Current rules assume the same derating factor for both technologies. Scottish Power, which owns the 440 megawatt Cruachan Pumped Storage hydro plant near Oban, says that risks too much or too little capacity being procured via capacity auctions, with batteries taking an increasing percentage of the contracts offered to ensure secure supply margins over winter.
Some 6% of the contracts (3.2GW) awarded in December for delivery from 2020 were awarded to storage providers, with around 500MW to new build battery storage projects.
“Pumped storage has historically shown extremely high levels of availability and has high de-rating figure of 96.29%. Given that battery storage uses an entirely different technology, there is no justification for assuming that the reliability of battery storage is the same as pumped storage,” said Scottish Power’s director of regulation Rupert Steele, in the proposal.
“It will be important to assess independently what level of reliability it is appropriate to assume for battery technology. The impact of inappropriate de-rating factors could be an under or over procurement of capacity, both of which are potentially harmful to end consumers through lower system security (under procurement) or higher costs (over procurement).
“This proposal is therefore in accordance with Ofgem’s principal objective to protect the interests of consumers, including in respect of security of supply. It is also aligned with the CM rule change objectives in facilitating efficient operation and administration of the Capacity Market and promoting security of supply.”
See details here.