Battery energy storage system

Why battery energy storage systems could be the answer to UK energy crisis

Image credit: Leowolfert/Dreamstime

The abbreviation BESS could equally stand for better energy stability and security.

The Energy Bill currently going through parliament recognises that energy storage will be instrumental in supplying the UK with stable, secure energy whilst also decarbonising the grid. One of its key objectives is to ensure the safety and resilience of the UK energy system by re-classifying battery energy storage systems (BESS) as a distinct subset of energy generation.

The Review of Electricity Market Arrangements (REMA) consultation, launched by the Department for Business, Energy & Industrial Strategy in July and closing this month, goes one step further. It states that the country will need access to unprecedented levels of investment in low-carbon technologies including low-carbon generation and electricity storage in order to completely decarbonise the grid by 2035.

Why is battery energy storage so necessary at both the national and individual level, for businesses? Well, to begin, any organisation with an annual energy bill of over £500k will be financially better off with a BESS.

Energy storage allows a site to take full advantage of energy arbitrage, where power is bought during off-peak hours, stored and used during peak periods. Stored energy not being utilised can also be sold back to the grid to improve return on investment. A BESS also allows for additional revenue generation through providing flexible grid balancing - a service that the National Grid pays businesses for. Both revenue-generating activities will allow most sites to see a return on their investment within six years or sooner.

A BESS can also overcome grid constraints, which many more sites will discover as they look to add EV charging, or other high-energy equipment, and find that their site doesn’t have the connection capacity to cope.

As an illustration, one electric vehicle charger will require anywhere from 15kW to 350kW depending on the speed of charge. Depending on the site and the constraints in the area, an additional electrical upgrade can be provided, but is often a cost-prohibitive option for businesses. In some places it will simply be impossible to increase grid connectivity. In these situations, a BESS is an instant solution, able to manage energy as needed to ‘bridge the gap’.

The UK’s lack of long-term storage means the country currently wastes enough wind energy every year to power more than a million homes. Solar generation increased from 21TWh to 156TWh in 2020 and a fourfold increase in orders brought on by the volatile energy market coupled with the extreme heatwave has been widely reported this summer. 

What hasn’t been widely reported however, but we have observed through customer queries, is that many new on-site and rooftop installations, and existing ones, are generating more electricity than the site can use. In this situation a BESS can be both a solution to energy ‘waste’ on a national level and an opportunity to generate revenue at an individual site level.

This is not just a UK challenge; the European Association for the Storage of Energy recently estimated that the continent needs 600GW of energy storage by 2050 to reach its renewable-energy goals. Embracing stored energy from renewables is going to be a major facilitator in achieving net zero.

While the UK pipeline of utility-scale battery-storage projects has reached 43GW across more than 1100 projects, the installation of individual smaller-scale projects is also growing. My company, Connected Energy, recently installed three 300kW BESS units at Cranfield University, each using 24 used Renault Kangoo batteries, and we have 15 other operational sites across Europe.

The use of second-life batteries is highly significant. While providing equivalent functionality to units made from new batteries, second-life storage units provide an additional positive carbon benefit of 450tCO2e for every 1MWh installed.

For large carbon emitters, this level of carbon saving is hard to achieve through any other means. When our 20MW and 40MWh systems become available, the carbon-saving opportunities increase significantly. Of equal strategic importance however is the role this second life plays in reducing supply chain pressures.

With an estimated 6.7 million pure EVs operational worldwide and 34.7 million predicted to be on the road globally by 2030, second-life use of vehicle batteries is an obvious way to take pressure off the supply chain and drive the circular economy. 

The EU Review of Critical Raw Materials for Strategic Technologies and Sectors [PDF] placed battery raw materials top of the critical list in 2020. Since then, supply chain pressure has only increased. A recent memorandum of understanding signed between Faraday and the US National Renewable Energy Laboratory to address battery material recycling highlights how critical this issue is.

Volvo, Caterpillar and Hinduja have all recently become investors in Connected Energy. This adds to a five-year partnership that the company already has with Renault which has been key to the development of the company’s products, which use Renault Kangoo second-life EV batteries. This reflects the importance strong pan-value-chain relationships have as a means to help redeploy batteries in second-life applications.

It is high time that BESS, alongside renewables, receive the recognition they deserve for their ability to reduce wasted energy and make a meaningful contribution to decarbonising the grid. BESS stands for battery energy storage system, but it is also interchangeable with better energy stability and security. 

Matthew Lumsden is CEO of Connected Energy.

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