Shell: Subsidise batteries for faster flex


The UK government should consider targeted support for small-scale battery storage if it wants households to participate in a smarter, lower carbon energy system, according to Brian Davis, vice president, Energy Solutions at Shell International.

Shell New Energies acquired German battery storage firm Sonnen in February. The company has deployed hundreds of megawatts of storage into households and small businesses in its home market, where domestic storage penetration, roughly 600MW, is greater than industrial storage (around 380MW, according to Bloomberg).

Sonnen and others use domestic battery to help balance the German grid. While there are companies in the UK providing grid balancing services via domestic batteries, the market is small in comparison.

Speaking at Aurora’s Summer Renewables Summit, Davis said storage, both short-term and seasonal, “is critical to get the system to balance” in a decarbonised power system.

Yet while renewable generation creates an “increasingly intermittent supply picture, the demand picture is becoming increasingly controllable,” said Davis. Technologies such as electric vehicles, heat pumps and batteries “all internet connected” can help “balance what can’t be controlled on supply”.

Asked if there was a policy impediment to unleashing storage, Davis replied “some form of focused subsidy” for domestic batteries would help provide that flexibility faster and deliver lasting benefits.

“Our batteries last 10,000 cycles, they are a long-term asset,” said Davis. “They can be aggregated to provide grid resource and services over what a household needs.”

Power play

Davis helped conceive Shell’s New Energies business and the company is busily buying up energy companies and investing in cleantech. Davis said the unit’s “overarching perspective is starting with the customer, understanding what they want across markets and working back from that”.

While smarter power grids are central to decarbonised power system, Davis indicated it has no current plans to get into UK distribution.

“It’s good to have a degree of value chain integration, playing in the parts that are right for specific markets. I don’t see network assets as a pre-requisite as the UK is unbundled.” He said Shell’s focus is “value chain integration versus vertical integration”.

Davis said that approach gives the firm optimism it can profitably continue its own pivot as the energy sector undergoes systemic change: Shell aims to become the world’s largest power company by 2030.

“The energy system of the future is different to the past. The value chains in 2040 will be different … margins will shift over time.” As such, said Davis, any energy company that thinks revenues can be mapped out “is probably wrong”.

“Portfolio diversification creates resilience… we think that is the way to create a business that in aggregate is more stable.”


Gas remains part of the future. Even in a world of net zero emissions, Davis suggested there is “an ongoing role for gas, there will still be molecules out there … in an affordable economy”.

That may ultimately be biomethane or hydrogen said Davis, with UK natural gas infrastructure potentially acting as seasonal storage for those fuels. “So no, it’s not the end of gas.”

Davis said hydrogen created from renewables (using excess wind to power electrolysis, for example) could become a significant business.

“Globally, some areas don’t have the landmass for renewables, so they will require some other form of clean energy solution. We believe hydrogen [can work] particularly through electrolysis. You can liquefy the hydrogen and ship it around the world. That is no more incredible than in the 1950s when shell was creating the LNG business.”

Asked if that might be too expensive, Davis suggested markets tend to provide answers.

“What do people value and what will they pay for. It will always work if cost is below value.”

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  1. Good to read that Brian Davies includes hydrogen as a means of storing off peak electricity generation, as his company Shell is already installing hydrogen filling points in some of their filling stations, but not fast enough in my view, when you consider that the long term future of electric cars is likely to have their fuel stored as hydrogen and converted to electricity with a fuel cell, rather than just storing it in a large battery which is heavy, has a limited life and takes a long time to refuel.
    Shell is working with ITM Power in the UK and Germany to install these hydrogen filling points, but not fast enough to encourage us to buy hydrogen powered cars (FCEVs). Chicken and the egg again?

  2. We have looked at battery storage for both electric car re- charging and use in lighting from a 9.6kW Pv array. . This interest from Shell in this area is very welcome , but can the cost of battery storage be cost effective ? The actual charging of electric cars is controlled by the car itself and the available speed from Grid or battery does not relate to the ability of the car to receive it, so this too is of some concern. .


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