1. Barriers & Solutions to System-Wide Energy Storage Inputs & Scoping Workshop PLEASE LOG ON TO WIFI

2. Welcome & Introduction Peter Bance, Project Chair Origami Energy

3. Energy Research Partnership ERP Role & Remit  Announced March 2005 by Chancellor in Budget Statement to: bring together key public and private funders of UK energy RDD&D promote coherent approach to UK energy challenges increase long-term energy related activity and investments in the UK.  Provides leadership to guide public and private sector activities in energy research and innovation, reflective of the UK’s very broad energy portfolio.  Statement of Purpose Research and Development – targeting of UK priority technology areas; Innovation – developing partnership models to stimulate and deliver innovation; Policy – providing the factual basis to inform decision making; Delivery – promoting the role of social science in understanding consumer preferences for the deployment of new technologies and innovations.

4. Energy Research Partnership ERP Analysis Team Hosted by: Co-Chairs Public Prof John Loughhead Chief Scientific Advisor, DECC Private Dr Keith MacLean Independent Co-chair, formerly SSE Members Resource Secretariat support from DECC Structure

5. Energy Research Partnership Funders UK / Regional Government Industry Academia NGO / Advisors Membership Oil & Gas Manufacturing Utilities Consultancies SME / Venture Capitalist Observer Members

6. ERP’s Energy Storage Project / Inputs & Scoping Workshop

7. Energy Research Partnership Wider Project Aims & Objectives Focus on financial, legal, political, commercial and regulatory challenges to system-wide ES Consider the whole system need and: 1.Identify barriers & ways to overcome them to… 2.Provide clarity for: policy-makers, regulators, network operators, customers, investors & ES developers (tech & supply chain developers) to… 3.Where appropriate, help catalyse & mobilise an ES supply chain of UK value, stimulating investment

8. Energy Research Partnership 1. FINANCIAL 2. COMMERCIAL 3. REGULATORY 4. POLITICAL 5. LEGAL 6. SOCIAL TECHNICAL WHOLE SYSTEM NEED FOR ES 2016 FOCUS MORELESS

9. Energy Research Partnership Storage in Scope? Electrical Thermal Gas Hydrogen Transport Other? System-wide energy storage

10. Energy Research Partnership Aims & value of today’s workshop Inputs & Scoping Workshop - to inform ERP’s project work Direct relation to 1 st project aim: Identify barriers & ways to overcome them Interested in case studies to support these barriers Value of workshop is bringing a range of whole- system attendees together for discussion

11. Energy Research Partnership Previous & Related Works: ERP Energy Storage Report (2011) – ops & challenges for electrical storage Recent Carbon Trust (2016) Report … specifically addresses electrical storage with wind & PV case studies DECC –Report with Elec & Thermal use-cases –Call for evidence (2016)

12. Energy Research Partnership Feedback from Plenary Energy Research Partnership What services can ES offer? Heat storage & uptake of hot water tanks Value of ES to system – why needed? How much? Technology -agnostic Comparison with other solutions Energy Arbitrage &“market stuff” Storage in context of DR Focus on finance barriers (plus others e.g. social) solutions to barriers “Soft costs” Behind meter / customer -sited

13. Providence Policy Storage- T he new holy grail? Dr Keith MacLean 24 May 2015

14. Energy Research Partnership “Elon Musk hails 'crazy' response to Tesla battery launch” (Guardian, 6 May 2015)

15. Energy Research Partnership It’ called fire – it recycles wood!

16. Energy Research Partnership Why is storage so topical again ? - Decarbonisation All agree on need to reduce carbon emissions … but carbon is major source of energy storage –Oil (petrol and diesel) –Coal –Gas Unintended consequences of decarbonisation –Intermittency/security of supply –‘Range anxiety’

17. Energy Research Partnership Current storage comparison GasElectricity Coal Electricity Hydro Annual energy (TWh)800350 Peak capacity (GW)30060 Storage capacity (GW)60 20 3 Storage duration (h)900 1500 9 Stored energy (GWh)54,00030,00027

18. Energy Research Partnership Replacing carbon storage – questions we must answer What are we trying to achieve with storage? How much are we willing to pay? What role can it play in balancing electricity supply and demand? –Impact of electrification of heat and transport? 18

19. Energy Research Partnership What are we trying to achieve? Time shift – across the day and the seasons Location shift – mobility Sector shift – heat, transport and electricity 19

20. Energy Research Partnership What are we trying to achieve? – first define storage characteristics Energy (kWh) Power (kW) Duration (h) One or two-way Charging/Discharging rates Charging cycles Weight/volume

21. Providence Policy What are we trying to achieve? – Energy 21 OR 1,000,000,000,000 Wh 1 Wh

22. Providence Policy How much are we willing to pay? 22 OR £0.001 - £0.01/kWh £100 – £1,000/kWh

23. Providence Policy How much are we willing to pay? Electricity sector examples: Storage used for:Current market Grid services (eg fast reserve) £150m.pa (ca. £35/kW.pa) Capacity/Back-upCurrently £19.40/kW.pa (limited to £75) Constraint avoidance£0.15/kWh (limited volume) ArbitrageLimited volume (£0.001 - £0.10/kWh) Grid services - a limited market (£100m’s) Capacity - large quantum, but must be low/competitive cost Constraint payments - naturally volume and time limited Arbitrage - naturally limited 23

24. Energy Research Partnership JanuaryDecember

25. Energy Research Partnership Necessary storage capacity ~ 45 days JanuaryDecember

26. Providence Policy … and what about the impact of heat?

27. Providence Policy Storage technology performance

28. Energy Research Partnership Seasonal storage – the biggest challenge In the short to mid-term, natural gas can act as a bridging technology Other solutions must displace this (all year round), otherwise just an extra cost Hard to be cost competitive against something we currently hardly pay for! 28

29. Interactive Test Question