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Electricity Storage and Renewables: Costs and Markets to 2030 Paper

  • Global
  • Energy and infrastructure

24-11-2017

IRENA, the International Renewable Energy Association, has published a detailed paper entitled ‘Electricity Storage and Renewables: Costs and Markets to 2030’. Click here to access the full paper.

IRENA is an intergovernmental organisation that supports countries in their transition to a sustainable-energy future and is the principal platform for international cooperation. Eversheds Sutherland is one of the lead law firms working on IRENA’s ground-breaking solar standardisation initiative, an ambitious project to help reduce the cost of solar projects worldwide.

The paper gives a thorough and detailed review of the progress of, and the pros and cons of, the various types of energy storage that are currently in use, and of those that are in development. It explains what storage types are suitable for what applications.

Highlights within the report include:

1. IRENA’s acknowledgment that new renewable energy additions have been growing year upon year since 2001, reaching a record of 161 gigawatts of new capacity additions in 2016. It is noted within the report that this renewable energy contribution is being driven by Government policies as well as worldwide support. It goes on to compare the position of current battery storage with that of wind and solar power over the last fifteen years, where increased roll out led to a virtuous circle of improving technology and reducing prices. It also highlights the fact that the increased contribution from renewables itself drives the need for storage in order to manage the variable nature of wind and solar generation. This is what is fuelling the development and deployment of storage and in particular, batteries.

2. A prediction that energy storage for stationary applications, i.e. not including storage vehicles, will grow seventeen fold by 2030.

3. An explanation of why energy storage will grow in importance as ever-increasing deployment of variable renewable energy is installed worldwide. IRENA has considered a recent report for the G20 analysing energy transition until 2050. It has found that over 80% of the world’s electricity could derive from renewables by that date, with solar PV and wind accounting for 52% of total electricity produced. This overwhelming contribution from renewables will, in some countries, require a complete rethink on transmission and distribution networks, with storage playing a central role in electricity distribution and grid management

4. Recognition that, in developing counties, local PV with storage is rapidly replacing kerosene powered lanterns as the main light source. Interestingly, in European countries, storage is increasingly penetrating the market. The report gives the example of Germany, in which 40% of small scale solar PV systems have been installed with integrated battery systems in recent years. The recent VAT reduction in the UK on solar PV and storage when installed concurrently may promote a similar move in the UK.

5. IRENA’s acknowledgement that a critical issue for battery storage is the lack of ability to stack revenues from multiple income streams. The benefit of this would be that one battery may create the maximum financial returns, with an ability for behind-the-meter batteries to have access to aggregators who can exploit the contribution of batteries on a utility scale.

6. Analysis of the 26 different uses to which batteries may be put. It is explained within the report how and why different types of battery are suited to different uses, taking into account matters such as speed of charge and discharge, energy density and efficiency.

7. A valuation tool to assist those considering deploying or investing in batteries develop insights into the costs.

8. A prediction that utility scale battery storage will grow strongly. It is suggested within the report that there will be growth from an estimated capacity of 10GWh in 2017, to between 45GWh and 74GWh in IRENA’s reference case, and perhaps even 81-197GWh in another study. It is noted that many countries are developing markets for ancillary services which are suited to battery provision, citing the UK as an example. In the UK, the market for balancing services will be worth around £871million.

The paper provides a thorough review from a global perspective, giving examples and evidence from various countries around the world.

Our team are pioneers in providing legal advice for battery storage projects. We are one of few teams that is providing legal counsel to companies developing battery storage projects. Our experience includes advising on the first ever battery storage PPA, planning and consents aspects of co-located battery storage facilities, and full suite of EPC and O&M documentation for externally funded modular battery storage solutions.

If you would like to discuss the energy storage market and opportunities further please contact the team below.

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