Highview Power Storage (HPS) welcomes the opportunity to
respond to this consultation. HPS is an award winning, UK based
energy technology company focused on a cleaner, more efficient and
secure energy future. HPS has developed a proprietary energy
storage technology that uses surplus electricity, at times of low
demand/low cost, to make liquid air, which can be stored and
released later to generate electricity at times of high demand/high
cost.
HPS technology uses proven components from the industrial gas
and power generation sectors, is unconstrained geographically, uses
no exotic/rare materials and produces no harmful emissions. It has
the potential to provide a large scale, long duration solution to
the challenges to the electricity supply chain associated with
increased intermittent low carbon generation and low carbon
technology.
The energy mix
How can we
decarbonise our energy system at a sufficient pace to achieve the
necessary reductions in emissions?
Answer:
What mixture of distributed generation resources best
meets Wales' renewable energy needs in respect to the supply of a)
electricity, b) gas, and c) heat?
Answer: No
Comment
The grid
How does the
grid distribution network in Wales enable or restrict the
development of a new smarter energy system?
Answer: No
Comment
What changes
might be needed in terms of ownership, regulation, operation and
investment?
Answer:
Energy storage (ES) could make a significant contribution to
electric power systems by providing benefits across the entire
value chain. To date, the deployment of ES has been limited, in
part, due to the current electricity market structure and
regulation.
The main problems identified in projects such as the
Smart Network Storage project ran by UK Power networks are the
following:
-
Undetermined asset class for ES as
such and unbundled electricity system limiting stakeholders, in
particular distribution and transmission system operators, from
appropriating ES benefits. Currently ES is classified as a
generation asset limiting the ability of Distribution System
Operators (DNO) and Transmission System Operators (TSO) to recover
investments in this type of assets. This issue has been raised at
European and International level and some progress has been made in
the state of New York. Distribution Utilities will be allowed to
own storage systems that are located on utility property and meet
the following criteria - they must be integrated into the
distribution system architecture and used to enhance overall grid
reliability and integration of increased levels of distributed
energy resources.
The proposed change in regulation is
the creation of a separate asset class for ES and associated rules
for regulated and competitive operations.
-
The lack of ES deployment experience
results in the absence of common standards and procedures for
evaluating, connecting, operating and maintaining ES. This in turn
results in barriers to the deployment of storage.
Integrating the findings of energy storage demonstration
projects in codes and standards and furthering the knowledge and
experience on ES assets is a necessary step to streamline its
deployment.
Additional barriers to the deployment of storage as
presented in a paper published in 2014 by Anuta[1]
et al. are the following:
-
Renewables integration policies. No
benefit for controlled and dispatchable RES.
-
Transmission and distribution
use charge, tax exclusions and renewable energy
subsidies
-
Energy storage not being
considered as a renewable energy source (RES) under RES
targets
Storage
How can energy
storage mechanisms be used to overcome barriers to increasing the
use of renewable energy?
Answer: In general terms, the
marginal costs associated with the integration of renewables into
the energy portfolio of a power system increase with the share of
renewables. The Potsdam-Institute for Climate Impact Research
analysed the impact of wind integration on the levelised cost of
energy (LCOE) of a power system as a function of the final share of
wind in the energy portfolio. The study was based on the
German power system where the penetration of renewables is among
the highest in the world, but the study is applicable to other
countries. As can be seen in Figure 1 below, the LCOE
of wind remains constant at €60/MWh and is labelled as
Generation costs whereas Integration costs increase proportionally
with the share of wind. Integration costs are divided into Profile
costs, Balancing costs and Grid costs and account for variability,
uncertainty and location-specificity respectively. Profile
costs are associated with over generation and the need to cycle
base load power plants. Balancing costs are associated with the
costs incurred by the Power System Operator to keep the balance
between power supply and demand. Finally, Grid costs are associated
with grid reinforcement costs. The dashed line and shaded area
reflect short-term integration costs before the power system adapts
to the deployment of higher shares of variable renewable energy
sources.
|
|
Figure 1. Source:
Ueckerdt Falko , Hirth, Lion (2012): “System LCOE: What
are the costs of variable renewables?” , Potsdam-Institute
for Climate Impact Research.
|
Energy storage (ES) can be used to reduce Integration
costs. In California, where the share of renewables is significant
and Profile costs associated with the integration of solar PV are
expected to be significant by 2020, the regulator has required
investor owned utilities to procure 1.3 GW of ES for different
applications. These include network reinforcement deferral, which
is seen as a cost effective alternative to traditional
reinforcement. The procurement mandate requires that ES projects be
evaluated based on a cost benefit analysis. This implies that the
benefits that a storage system can generate are as important as its
costs. Table 1
presents the levelised cost of energy
for a range of ES technologies for power and energy intensive
applications as presented in a study[2]
supported by the European
Commission.
Table
1
As can be seen, Pumped Hydro (PHES) and Compressed
Air Energy Storage (CAES) exhibit the lowest LCOE but these are
geographically constrained, which might limit their ability to
appropriate the value they generate. By looking at the results of a
study[3]
undertaken by Imperial College,
presented in Figure
2, it is clear that a
significant proportion of the value created by storage is related
to savings in Distribution CAPEX (i.e. grid reinforcement
investment deferral), especially by 2020, so it’s evident
that location will play a key role in the financial viability of an
ES project. On the other hand, the LCOE of batteries such as
Lithium-ion (Li-ion) is significantly higher. This is due to the
costs incurred every time batteries are replaced, which are a
consequence of electrochemical degradation. This is affected by how
often the battery is used and is worsened if the battery is fully
discharged every time it is used.
Figure 2
A Liquid Air Energy Storage (LAES) system can be
located where required and because it doesn’t use toxic
materials, this can be achieved near demand centres where it can
monetise the value it generates across different layers in the
network.
Ownership
To investigate
the desirability and feasibility of greater public and community
ownership of generation, transmission and distribution
infrastructure and the implications of such a change.
Answer: No
Comment
Energy efficiency and demand reduction
How can the
planning system and building regulations be used to improve the
energy efficiency of houses (both new build and existing
stock)?
Answer: No
Comment
What would the
environmental, social and economic impacts be if Wales set higher
energy efficiency standards for new build housing? (e.g. Passivhaus
or Energy Plus)
Answer: No
Comment
Communities - making the case for change
How can
communities, businesses and industry contribute to transforming the
way that Wales thinks about energy?" Does the answer to this
challenge lie in enabling communities to take greater
responsibility for meeting their future energy needs?
Answer: No
Comment
