The government should re-design its Capacity Market to incentivise innovative energy storage and demand side response (DSR) technologies.
That could make the grid cleaner, more flexible and secure, said the Energy and Climate Change Committee (ECCC) in its final report before it is disbanded.
It recommends the government to quickly address regulatory barriers, setting a clear definition for storage and bringing an end to double-charging and a separate asset class for grid-level electricity storage.
It states although DSR can provide benefits to the grid and consumers, unfair bid bonds and the length of contracts available under the government’s Capacity Market are currently a disadvantage to providers in favour of more polluting new-build power stations.
ECCC’s Chair Angus MacNeil MP said: “The government must get a move on and encourage the energy market to embrace smart technological solutions like energy storage and demand side response. There is an incredible opportunity for the UK to become a world leader in these disruptive technologies. Yet our current energy security subsidies favour dirty diesel generation over smart new clean tech solutions.
“Getting demand side response right will empower consumers, reduce bills, ease pressure on the grid and lower Carbon dioxide emissions. Energy storage is a vital keystone in building a clean electricity system. It will mean we won’t have to wait for the sun to shine or the wind to blow to get our energy from renewables. We can generate electricity, store it and turn it on when it’s needed. If current regulatory barriers to storage were removed, some £7 billion per annum of savings to consumers could be achieved.”
The ECCC also said there are concerns that the UK’s departure from the EU could end its involvement with co-ordinated actions and processes in the long term.
It points out the EU “solidarity principle” proposed by the Energy Committee which aims to ensure Member States receive immediate assistance in the event of a gas supply crisis.
The report urges the government to examine how the UK can continue to participate in this process and investigate alternative back-up arrangements to ensure security of supply in the event of a crisis.
It added despite Brexit having reduced the “already-weak” investor confidence in the energy sector, the UK leaving the EU is not expected to change the general direction of the nation’s energy and climate change policies since this is driven by the Climate Change Act 2008 and domestic concerns about security of supply and affordability.
ELN has contacted BEIS for a comment.
Energy storage and demand side response will be part of the discussions at the Energy Live 2016 conference on November 3rd in London. Get your tickets now to book your place! Last few free tickets for energy end users and university students available.