With blackouts and transport chaos affecting substantial parts of the UK on 9 August, it is not surprising that Ofgem has launched an investigation following the initial report provided by National Grid.
One focus of the investigation will be on whether National Grid was holding sufficient back-up power to manage the loss of generation supplies. Following the loss of two generators, National Grid called on reserve and flexible generation capacity to fill the gap and, during the 40-minute disconnection of these substantial generators, battery-stored power played an important role in preserving supplies as far as possible. However, the flexible reserve capacity was not sufficient to meet the shortfall and National Grid had to cut off some customers to protect its infrastructure.
Although National Grid’s initial report found that this was an unusual set of circumstances, battery storage operators have said this incident provides a perfect example of the current and growing need for additional power storage and that far greater quantities of flexible storage capacity are required for future anticipated growth in demand. Gas peaking plants are another means by which peaks in demand can be managed more effectively, particularly the uncertain output from wind and solar energy sources.
While this power outage may well have been caused by an unlikely combination of factors, it is well accepted that energy demand is rising. There is a growing demand for electronic goods around the globe and the particular push for electric vehicles (EVs).
For energy supply companies the advantages of battery storage and peaking plants are clear. But is there enough battery capacity?
Further investment in this area is being seen worldwide, and storage has increasingly attracted the attention of investors in the UK, with many seemingly poised to enter the market. Early investors have notably included Foresight Group. Peaking plants have also seen interest from UK investors, with companies such as Forsa Energy having a particular focus in this area.
Technology needs to keep pace with developments because it is crucial to control the flow of electricity into and out of the grid quickly and efficiently. A number of UK investors who have been monitoring the storage market for the past few years have been cautious about being caught out by changes in technology. Going forward, investors will need to feel comfortable about technology risk, as well as sufficient back-up power contracts to underwrite their investment.