Post - Blog

The business of battery storage

  • 2 years ago (2019-05-18)
  • Junior Isles
Storage 24
Paul Sheffield

By Paul Sheffield, Chief Operating Officer, Haven Power

Hitachi Energy
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Hitachi Energy

Regardless of the industry a business operates in, managing costs is one of the major challenges. This is especially true in a market place characterised by political uncertainty and increased competition. As organisations try make themselves more agile, while balancing these costs, electricity is one of the areas of focus.

According to Businessenergy.com , electricity costs range from £3,664 a year for small businesses, to almost £60,000 for industrial concerns.

In addition to managing usage and cost, businesses must also consider their impact on the environment and long-term sustainability. While the energy market is stable at the moment, what can organisations do to be more resilient when it comes to price shifts, reduce their reliance on the grid and minimise their environmental impact?

The battery solution

The answer is battery storage. Battery storage allows businesses to take better control of their energy and gives them flexibility in terms of cost and usage.

And it’s not just the answer for large-scale energy users. All types of businesses can benefit, especially as the cost of batteries has decreased in the last few years — as a result of the growth of the electric vehicle industry. The price of batteries has dropped from more than €1,000 per kilowatt hour (kWh) of energy capacity in 2010, to approximately €150-200 per kWh today.

Battery storage is steadily gaining ground. In the UK, there is approximately 500MW of large-scale battery power installed, which is expected to double by 2022.

Consider that planning applications for battery storage capacity in the UK rose from just 2MW in 2012 to 6,874MW in 2018 according to renewableUK . Currently, just 4.8GW of battery storage has gained planning consent, but even if a fraction of the new applications gain approval, one thing is sure — battery storage on the grid could transform the UK energy market.

This is in line with the way batteries are being used in other countries too. According to research company BloombergNEF , the global energy storage market is expected to grow to 942GW by 2040.

Cost efficiency

There are a number of benefits to be gained from battery storage, with the main one being saving money. Organisations can rely on the grid when electricity is cheaper, that is during off peak periods, and then switch to battery storage during peak times.

In the same way, businesses can use off peak electricity to charge the batteries when consumption is cheaper and store the energy for use during peak periods.

Organisations can also take advantage of demand side response (DSR). To help balance demand and generation, the National Grid offers financial incentives to businesses who agree to increase or decrease their energy consumption at certain times. The rewards businesses receive increase in line with how quickly they can switch between electricity sources, with some using automated systems to enable the change.

The downside to this approach is that accessing these types of schemes can be challenging and time intensive. Working with the right energy supplier can smooth this process and ensure businesses can easily shift their usage without interrupting core operations.

Another area where businesses can save cost is by reducing Transmission Network Use of System (TNUoS) charges. In the winter months the National Grid identifies Triads, three half-hour periods of the highest demand that are separated by a minimum of 10 days. Triads are then used to calculate the TNUoS charges for medium and large businesses. Organisations can save money by stopping or decreasing energy usage during these periods, which is where battery storage can help.

Business continuity

Then there is resilience. In the event of a power outage — unplanned downtime of any kind can be costly for a business whether that’s loss of sales, loss of productivity or damage to customer trust — organisations can use battery storage to remain operating at usual with no disruption to their own operations, or the services they deliver to customers.

The opportunity

The use of battery storage also means businesses can make better use of low-carbon energy from renewable sources such as wind and solar. These sources provide intermittent, unpredictable energy as they rely on environmental factors. With battery storage businesses can store this energy as it becomes available, whether they are buying it or generating it themselves. In this way they can be more flexible, use the energy whenever they need it and can do all of this without increasing their carbon footprint.

There is also an opportunity for businesses to develop a new revenue stream. They can send any surplus energy from their battery storage back into the grid, generating additional revenue.

The future

Battery storage is on the rise; not just in the UK where demand is growing significantly, but worldwide too. The uptake could even rise further as technology advances and battery performance and charging times are improved and optimised. As it stands, battery storage presents great opportunity to businesses, from cutting costs and being more flexible and sustainable, to generating additional revenue, and taking advantage of renewable energy opportunities. Moving forward, it is also a clear solution to dealing with any potential shifts in energy price and putting businesses in a better position to deal with any changes.