Energy storage could cut bills by £50 by 2030, says Carbon Trust

Full utilisation of energy storage has the potential to cut household electricity bills by £50 a year through a system-wide saving of £2.4 billion, a new report by the Carbon Trust has claimed.

11th March 2016 by Networks

The report, funded by three of the big six energy suppliers – Eon, SSE and Scottish Power – in conjunction with the Department for Energy and Climate Change (Decc) and the Scottish government, has analysed the benefits of energy in three future energy scenarios.

But the report also highlights that an incompatible market structure has reduced the commercial viability of storage for investors by increasing risk and reducing revenue potential.

It also said that the split of benefits across network stakeholders makes it difficult for a single one to develop a business case.

It is therefore calling for a “clear and comprehensive strategic approach” to energy storage including the creation of a multi-stakeholder taskforce, an inter-governmental working group and joint industry projects.

Under National Grid’s ‘gone green’ scenario if just 50 per cent of the £2.4 billion system cost savings by 2030 are passed onto consumers, it would lower household electricity bills by £50 a year, the report found.

On a least-cost pathway for the UK to meet its 2030 carbon emissions reduction target developed specifically for the report, deploying storage could deliver cost-savings of £2 billion in 2030.

A further £5 billion would also be saved from improved use of generation assets and optimised investment in new low carbon generation.

Scottish energy minister Fergus Ewing said: “Scotland is already deploying storage technologies, with existing and proposed pumped hydro sites, as well as battery projects and the storage of renewably-generated hydrogen for use in heat, power and transport.

“The regulatory arrangements must change to recognise the economic and the energy security benefits of storage and I urge the UK Government to accelerate its work in this area.”

The Carbon Trust’s director of innovation Andrew Lever said: “An urgent rethink is needed so we can address and overcome the broken value chain of energy storage, which is essential if Britain is to provide low carbon energy at the lowest cost to the consumer.”

The UK energy storage industry has already outlined five regulatory changes that would help boost deployment. Decc is expected to consult with industry on energy storage this spring before publishing its position in the autumn.