1. ELECTRICITY
STORAGE
Increasing the proportion of UK The Institution of Mechanical Engineers
urges Government to adopt the
electricity supply from renewable following recommendations:
energy sources is a critical part 1. Support actions to identify the true system
of achieving a sustainable energy benefit of electricity storage. As a matter of
priority the UK’s Department of Energy and
framework for the nation. To date, Climate Change (DECC) should carry out a
relatively small proportions of wind, detailed analysis to estimate the realistic
requirements for electricity storage across the
solar and biomass based power have whole UK power system and its corresponding
been installed in comparison to value to the nation.
conventional generation. However, 2. Develop policy frameworks that reward the
value of electricity storage in the UK’s power
the Government expects the markets. The UK Government’s Electricity
proportion to increase over the next Market Reform (EMR), which is examining
and revising the commercial and regulatory
ten years. structure of the nation’s electricity market,
should take into account the unique nature of
As wind and solar power are intermittent forms of
electricity storage and remunerate investors and
generation, when the proportion of these sources
operators accordingly.
increases in the mix, additional measures are
needed to maintain a safe and efficient balance 3. Encourage and support UK development of
between electricity supply and demand on the power storage technologies for exploitation in world
system. To date, the adoption of electricity storage markets. The UK Government should advance
technologies as a means of providing power system the commercial-scale demonstration of electricity
support has been limited, due to a combination of storage technologies in the UK, and thereby
regulatory, commercial and technical factors. create technical value that UK companies can
exploit in markets worldwide.
This position statement examines the role that
electricity storage could play in our future networks.
Improving the world through engineering

2. ELECTRICITY STORAGE
RENEWABLE ENERGY POLICY Benefits of electricity storage
Renewable energy provision is a substantial part of The key benefit of storage on a power system
current UK energy policy and commitment. The EU is to increase the efficient utilisation of assets
Renewable Energy Directive[1] sets the immediate on the network. In addition to maximising the
goal of meeting European targets that require use of output from renewable-based electricity
the UK to deliver 15% of the nation’s energy from generation technology, storage enables an
renewable sources by 2020. In addition, the UK’s increased return on investment (ROI) for base-
Climate Change Act 2008[2] places a legally binding load plants through enabling longer periods
longer-term commitment on future Governments to of operation at higher output. Electricity
achieve an 80% reduction in the nation’s greenhouse distribution infrastructure, such as transformers,
gas (GHG) emissions by 2050 relative to 1990 levels. cables and overhead lines can also be installed to
This target can only be realistically met only through meet average loads instead of being oversized to
an energy mix consisting of a high proportion of meet peak loads, thereby avoiding unnecessary
renewable and other low GHG-emitting sources. The expenditure on power infrastructure.
Committee on Climate Change (CCC) predicts that a
generating system largely free of GHG emissions will A number of other benefits also result for the
be needed by 2030 and that by 2040 most transport power system:
and heating will be transitioned to electricity-based
• Fast acting and responsive; most storage
technologies [3]. The outcome of such a scenario will
can be switched to discharge or charge
potentially be a doubling of UK electricity demand
electricity in a time period, often quicker than
requirements by 2050[4].
generating plant can be bought online or
switched off.
Considerable challenges exist in the adaptation
of the UK power network to support this • Deployable as large or small units; there are
anticipated increase in the use of electricity while a range of technologies, some of which are
simultaneously integrating a substantial renewables suitable for small unit sizes and some for
capacity into the generation mix. The scale of the larger installations, making it possible to
challenge ahead is evident in the estimates for design a project to meet a specific application.
investment in the system: up to £75 billion for new
• Deployable where it is most required; storage
generation assets[5] and about £35 billion for power
can be positioned in small units throughout
transmission and distribution infrastructure[6] over
the distribution network, as well as in larger
the next ten years. Other changes in the power
and centralised installations.
sector, for example increased loads from digital
devices and heat pumps as well as new forms of • Modularity; many of the technologies
micro-generation, such as solar power and wind can be scaled to suit a required size or
power connected at consumer premises, will also configuration and are able to be transported
increase the complexity in managing the system. For to a new location should the application or
most of the time the effects of these changes will be circumstances change.
small, but there will be periods when they will have
serious implications for the network’s operation.
STORAGE TECHNOLOGY
MITIGATION OF VARIABLE There are a number of electricity storage
GENERATION USING STORAGE technologies, each with their own particular
characteristics of size, cost and performance[7].
Power systems must be operated so that supply is Electricity storage can therefore be considered in
equal to the real-time demand and system losses terms of its application and it would be incorrect
at all times. If this balance is not maintained, the to consider any form of storage as a ‘one-size-
system becomes unstable and may quickly fail, with fits-all’ device; some applications being more
potentially severe economic and technical effects. suited to particular technologies, for technical as
As the proportion of intermittent renewable energy well as commercial reasons.
sources increases substantially on the UK network in
the coming decades[3], there will be occasions when
nearly all the demand is being met by a combination Mechanical systems
of wind power and inflexible base-load generating
plant (such as nuclear and biomass), resulting in Pumped hydro electricity storage
considerable stability challenges. In order to match Energy is stored when electricity is used to
even small changes in production, the network pump water from a lower level to a higher level
operator may take a number of steps to manage the in a reservoir. Electricity can then be generated
system, including: by water flowing through a turbine as it passes
back from the high level to the lower level. This
a) Holding of reserve on existing flexible generation
system is typically of large scale and suited to
(ie gas turbines)
mountainous regions.
b) Management of demand (ie voluntary and
compulsory disconnections) Compressed-air energy storage
Air can be pressurised using electrically driven
c) Use of interconnections to adjoining systems
compressors, stored, and then the energy
(ie Europe)
recovered when the air is expanded back to
d) Electricity storage atmospheric pressure through a turbo-expander.

3. Storage can be underground, using salt caverns Electro-chemical
or other structures, or above ground in vessels
or pipes (a new variation is to use fabric bags Batteries
to contain the air underwater). Although large- There are many types of battery which can be used
scale implementation is possible, few large-scale for small and large applications of electricity storage
compressed air plants have been built. on the power network. The lead acid battery is still
the most widely used battery type, but recently there
Flywheels have been developments in the use of lithium ion
Electricity can be stored as kinetic energy in a technology. Other battery types include those based
spinning flywheel. A motor is used to increase the on high-temperature systems and flow batteries. The
rotational speed of the flywheel, and when it slows latter store energy in electrolyte tanks outside the
down the motor operates in reverse as a generator battery cell, and have potential for both medium and
to recover electricity. Large flywheel systems have large-scale applications.
been used to provide frequency response services to
the transmission system. The hydrogen cycle
A popular concept for electricity storage is to
consider electrolysis of water to produce hydrogen
Thermo-mechanical storage and oxygen. The hydrogen can be used in a
fuel cell to generate electricity. Alternatively,
Cryogenic energy storage the hydrogen can be utilised as a chemical
Air can be liquefied through cooling using electricity feedstock for manufacturing synthetic liquid fuels,
and stored as a cryogen. The liquid air is then thereby transferring the stored energy to the
expanded upon demand through a turbine and the transportation sector.
energy recovered as electricity. The system uses
existing technology in a novel configuration and has
been recently demonstrated at pilot plant scale by a POTENTIAL APPLICATIONS
UK company. OF ELECTRICITY STORAGE
Pumped heat At present there is little storage capability on the UK
Electrical energy is stored in a thermo-mechanical network, the principal capacity being approximately
device when the temperature difference between a 2,800 MW of pumped hydro-electricity storage,
hot and cold store is used to drive a reversible heat which can store approximately 27,000 MWh (2.5%
engine. A UK company is developing this process of daily average electricity production)[8]. Initial
and is building a demonstrator project. estimates suggest that the reserve requirement will
rise from just under 4,000 MW at 2011 levels to 8,000
Latent heat recovery MW in 2025 if there is penetration of wind of 30%[9].
Compressed air can be used for the storage of energy
as latent heat and that energy is later recovered by In addition to considering more pumped storage,
generating electricity from a captive hydroelectric other types of electricity storage will be applicable
turbine. A UK company is currently demonstrating to the UK and there is an urgent need for a thorough,
this system at small scale. detailed assesment of potential opportunities.
Fundamentally, storage should be located where
it will be of most value to the network. Table 1
illustrates the relationship between different scales
of storage and various operator types. Large-scale
storage may be installed at main transformer
substations, and medium-scale storage would
be appropriate at the distribution transformer
Table 1 Examples of different scale applications of substations which supply towns and large
electricity storage and potential users: industrial sites.
Small Medium Large Very large
Under 1 MW 1 – 10 MW 10 MW – 100 MW 100 MW +
Power producers Standalone Energy trading
systems for self- Supply of ancillary
generation and services
renewables
Network operators Deferral of network Local network Deferral of system Network constraint
reinforcement management reinforcement management
Deferral of network Peak shaving
reinforcement
Consumers of Small commercial, Local load Peak shaving Peak shaving
power domestic users management, for energy cost for energy cost
for local load smart grid support reduction and reduction
management and and external ancillary services
tariff reduction ancillary services

4. Within the urban environment, storage installed VALUE OF STORAGE INDUSTRY
at a community level can be used to support the IN WORLD MARKETS
development of distributed energy systems, as well
as the smart grid, and defer other expenditure on Several studies have been carried out that examine
the network. and indicate the potential size of the electricity
storage market. The Electric Power Research
Institute estimates opportunities for up to 50 GW[10]
COMMERCIAL INFLUENCES of storage in the USA, at price structure from
AND REGULATORY POLICY $4,000/kWh to $300/kWh. Other reports suggest a
worldwide market of US $20 – 25 billion annually by
The UK electricity market is dominated by a 2020[11], which suggests a global opportunity of 13
competitive generation and supply sector and a GW/year for storage[12].
highly regulated transmission and distribution
sector. The opportunities for transmission and However different countries have different
distribution companies to own and gain value from regulations for electricity storage. The USA is
storage have been limited by the allowable rates of embracing storage as an enabler of the smart grid
return on assets, which do not compare favourably and renewable energy, and changes in legislation
against other allowable expenditure. More are under way at Federal and State levels to ensure
recently, incentive schemes for novel technologies storage is considered as part of the future network.
have allowed network companies to develop Conversely, in Europe directives have been written
demonstration projects to illustrate the value of to exclude network operators from the role of
storage, but the scale of these projects is small and generating and supplying electricity, but the role of
limited to initial demonstrations of applications. storage has been recognised as an integral part of
Without a change in the regulatory and commercial network operation[13/14] and as a major component of
framework in the power sector, there is unlikely to future smart networks.
be a significant expansion of electricity storage.
There is an urgent need in the UK for a detailed
Numerous past reports on the general value of analysis to be undertaken to estimate the realistic
storage indicate that it is usually necessary to requirements for electricity storage across the power
combine income streams in order to achieve a system and realistically determine its corresponding
satisfactory rate of return to investors. For example, value to the nation.
large users of electricity may install storage so
that they can take advantage of off-peak energy
prices. As well as reducing their own peak prices,
they may choose to use storage to offer frequency
response or reserve services to the system operator,
or be available to offer network support to the local
network operator.
Commercial operators who wish to develop storage,
find that rates of return are much lower than for
other investments in the energy sector, because of
the higher discount rates attached to projects with
an uncertain income stream. Technologies such as
wind or solar power receive Renewable Obligation
Certificates (ROCs) or Feed-In-Tariffs (FIT) which
provide a long-term certainty for revenue to
incentivise the capital investment. However, because
storage is expected to operate in a commercial
environment, taking revenue from energy trading,
ancillary services and possibly a credit for
deferring other capacity, it can be challenging for
a developer to consider storage as a commercially
acceptable alternative.
This uncertainty creates two significant issues:
a) The development of storage projects is inhibited
and the introduction of storage is likely to be
delayed further, up until a point when it may
be too late to consider storage as a solution for
providing flexibility to the operation of the system.
b) Manufacturers, researchers and developers in the
UK are not benefiting from early opportunities to
demonstrate their technology in the home market
and thereby drive costs out through innovation. At
best, this means that technology will be exported
and the engineering benefit transferred overseas,
at worst, the opportunity for the UK to benefit
from this significant emerging industry is lost.

5. RECOMMENDATIONS Appropriate changes in policies and mechanisms
are needed: electricity storage should be
The large-scale deployment of electricity storage considered in a separate market category from
technologies, in common with many other generation, transmission, distribution and supply.
technology-based approaches for mitigating GHG Market mechanisms will need to be adapted if
emissions, requires significant initial capital storage at the distribution level is to receive value
expenditure. The incorporation of storage as a both for its role in network reinforcement and for
system asset will result in reduced system capital energy and power trading.
and operating expenditure and maximise the return
• Encourage and support UK development of
on investments in electricity generation equipment,
storage technologies for exploitation in world
whether based on renewable or traditional energy
markets. The UK Government should advance
sources, as well as network infrastructure for power
the commercial-scale demonstration of electricity
transmission and distribution. There is concern
storage technologies in the UK, and thereby
that the correct investment decisions should be
create technical value that UK companies can
made now to prevent investment in the wrong
exploit in markets worldwide. This will drive
technologies that will restrict future options.
innovation towards lower costs, support the
provision of a more flexible and responsive UK
power sector, and is an important step if the full
The Institution of Mechanical Engineers
benefits of the nation’s renewable energy sources
urges Government to adopt the
are to be realised.
following recommendations:
• Support actions to identify the true system
benefit of electricity storage. As a matter of REFERENCES
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requirements for electricity storage across the 3
whole UK power system and its corresponding Committee on Climate Change, The Renewable Energy Review,
May 2011.
value to the nation. This should be taken into
4
account by Government when determining the DECC, 2050 Pathways Analysis (HM Government,
London, 2010).
future policy for planning and developing the
5
power system and electricity market. There is DECC, Planning our electric future: a White Paper for
a lack of understanding about the flexibility of secure, affordable and low carbon electricity, July 2011 (HM
Government, London, 2011).
electricity storage and the wider financial benefits
6
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on the deployment of renewable energy-based 7
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near term. 9
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in 2020, June 2011.
• Develop policy frameworks that reward the
10
value of electricity storage in the UK’s power EPRI, Electricity Energy Storage Technology Options, EPRI TU
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Pike Research, Energy Storage on the Grid, July 2011.
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Escovale, Market Study for Flow Batteries, 2010.
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pay charges both as a generator of electricity
and as a demand customer when charging up,
which increases the costs disproportionately.
Institution of
Mechanical Engineers
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PUBLISHED MAY 2012