Much hope is vested in electricity storage technology as a game-changer in efforts towards decarbonising the energy sector. The idea of storing electricity for use at a later time, and even place, dates back to the inception years of the electricity sector.

Hydropower and pumped storage were used early on, and in 1907 battery-driven electric buses briefly operated in London. As with most new energy technologies, storage faced material, scaling and other challenges. However, storage technology was soon surpassed by the rapid progress of combustion technologies and the path dependency that followed.

In most industries, storage and conservation of goods smoothens production to match demand and supply. The conventional wisdom has been that electricity is special because demand and supply must match in real time, making the operation of the system and the market considerably complex.
It then followed that, if we could store electricity, the electricity market could behave more like normal markets. Electricity storage can be viewed in terms of its location in the system, the type of services it provides and the time scale of those services. Storage facilities can be placed at all levels of the system: distribution, transmission, generation, and at consumer sites. Storage can provide balancing services that range from a fraction of a second to seasons.

Recently, consumer storage has become part of the concept of consumer generation for self-consumption and even energy self-sufficiency. While this notion holds some promise, it raises important questions about the future of the electricity sector and in particular that of the distribution networks. A recent study by Richard Green and Iain Staffell of Imperial College London in Economics of Energy & Environmental Policy examines the viability of the emerging concept of ‘prosumage’ — the generation of electricity for self-consumption by households using solar photovoltaic systems combined with a storage device3.
The storage component of prosumage retains the excess supply of electricity from intermittent solar power for later use when supply is lower than demand. The aim is to maximize the self-sufficiency of the individual consumer and even gain full independence from the grid. Green and Staffell’s study is framed in the context of the British electricity market and simulates the consumption patterns of three types of representative households equipped with solar panels during a full year, taking into account the seasonal variations in demand and using the projected demand in 2030.

The sizes of solar panels are scaled to the needs of each consumer type and are complemented with Tesla’s larger Powerwall 2 (13.5 kWh) storage device.

The simulations show that consumers with electric heating have most to gain from storage, followed by those with electric vehicles, and then those with neither electric heating nor vehicles.
However, the researchers also show that savings on electricity bills do not offset the purchase and installation cost of the batteries, making the technology uneconomical for the mainstream.

Green and Staffell then discuss that prosumage would also be uneconomic in Germany and even in Spain where the solar resource base is more favourable than in Britain. Furthermore, by extending the modelling to explore the aggregate effect of prosumage with solar and wind power on net system load, Green and Staffell find that ‘selfish’ or uncoordinated prosumage of individual households will not result in significant system benefits, although it slightly flattens the load duration curve.

Despite the lack of a clear economic case for consumer-scale storage, some users will always opt for this option and leave the grid for a variety of motives4. The key issue is, however, the scale of storage solutions. The discussion of consumer-scale versus grid-scale storage is important because it ultimately can decide the future shape of the grid, or whether it even has a future. Grid-scale storage can provide different technical and economic benefits due to a set of potential system-wide services it may provide, although this requires substantial cost reductions and new business models. Indeed, each type of storage service may require a different storage technology. Grid-scale storage can then facilitate more efficient use of both renewable and conventional generation capacity.

There is therefore a need for policy debate and research, as the outcome of this transition process should not be left to chance, markets or the technology.

Regulators and policy-makers need to protect the network benefits of the grid arising from aggregation of diverse sources of generation and demand. Cost reductions in grid-scale storage could make it a distributed network resource but it will also challenge the business models of established utilities, for example, by facilitating the separation of conventional and renewable businesses.

Future innovations can further increase the network benefits of grid-scale storage through smart technologies, market design, and renewable support policies. Furthermore, electricity storage should not be viewed in isolation from the energy and infrastructure services. The emerging paradigm of energy systems integration explores the efficiency gains from integrating the different energy vectors (for example, electricity, gas and heat) with other network industries (for example, water, transport and communications). Storage can then prove even more useful and feasible in such a ‘network of networks’ context.

Without doubt, energy storage has a great role to play in facilitating the integration of renewable energy and brings with it a host of benefits.

Creating market conditions conducive to energy storage being financially viable is a challenge of global significance.

These changes will take time to get right, but since ultimately an electricity sector that makes full use of the potential of storage should be cheaper, more secure and more environmentally sustainable than one that does not, there should be no delay in identifying and pursuing them.

  2. Nature Energy – Nature Energy 2 – doi:10.1038/nenergy.2017.92

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