Connection queue arrangements deter co-location of storage with renewables 

The queuing arrangements for connections to electricity distribution networks are deterring developers from co-locating energy storage with generation, Renewable UK has warned.  

The trade association said developers who have already secured a grid connection currently face the risk of being “sent to the back of the queue” if they seek to add storage to their project, even if there is no need to increase export capacity from the site.  

In these instances, Renewable UK said distribution network operators (DNOs) carry out a connection reassessment process to determine the impacts on network fault limits and additional import capacity. However, the organisation said the addition of energy storage “should not imply a full reopening of a connection agreement but an update of an existing one” if there is no need increase overall capacity.  

The trade body said this is typically the case when adding storage, which instead enables more efficient use of network capacity and minimises the curtailment of renewables. It said this storage can also support the grid by providing ancillary and balancing services.  

In general, Renewable UK said the connections assessment process should be updated to “address the shortcomings of the current approach” and reflect these capabilities, which mean that “no additional reinforcements or investments, such as new or upgraded transformers, should be required.” It said such requirements increase the cost of hybrid projects and “make them unfeasible from a techno-economic perspective.”  

“A careful consideration should be made whether the addition of storage co-located with renewables will have any negative impact on higher or lower voltages of the network or in fact help to alleviate thermal constraints in the area,” it added.  

“There is a licence condition which places obligations to network companies to ensure whole system coordination in planning and operating the grid, however there is still a gulf between cooperation and a single whole system network treatment.” 

These were just a few of a long list of problems and recommended solutions in a new report from Renewable UK, which also highlighted the lack of clear and consistent definitions of co-location and hybridisation within policy and regulation.  

The trade body emphasised the distinction between these two terms that are “often used interchangeably even though representing two similar but operationally different concepts”. 

“Co-located assets could be geographically close together with some sharing of land and infrastructure” such as a grid connection but can have many different metering schemes within a single site for different purposes,” it explained.  

Meanwhile, hybridisation usually involves sharing of grid infrastructure such as substations or inverters between “a mix of generation assets all connected to a single metering point”.  

Renewable UK said there needs to be clear and consistent definitions of these terms across areas such as network planning, connections, permitting, energy codes, system operation and market arrangements.  

For example, the trade body said there is lack of appropriate definitions both within the Contracts for Difference and Capacity Market schemes. In the case of the Capacity Market, Renewable UK said there is also a need for corresponding de-rating factors.  

The report additionally called for: 

  • Changes to the Transmission Network Use of System charging methodology to encourage co-location in areas where this would reduce the need for grid reinforcements 
  • A process for pre-approving the design of retrofits to Renewables Obligation accredited generators. At the moment, Ofgem does not confirm re-accreditation until after a retrofit is completed, meaning the developer risks losing its subsidies 
  • The de-coupling of Contracts for Difference (CfD) payments from output, for example, through the introduction of ‘deemed generation’ CfDs – one of the reforms being considered by government as part of its Review of Electricity Market Arrangements. Renewable UK said the current arrangements discourage generators from using co-located storage to provide ancillary services 
  • The Low Carbon Contracts Company to develop a formal design approval process for co-location sites including CfD generation 
  • The Electricity System Operator (ESO) to publish more transparent and granular information on its flexibility requirements to incentivise investment 
  • The ESO to develop and publish comprehensive guidance on grid compliance for co-located sites 
  • Clarity over how co-located projects should be treated in the planning system in the case of the extension or repowering of existing onshore wind farms. Existing onshore wind farms are not subject to the same strict planning requirements as new wind farms, but Renewable UK said there is a lack clarity over whether this should be the case for projects adding storage, meaning planning authorities have taken different approaches 
  • The consistent treatment of storage across planning regimes in different jurisdictions 
  • Regular updates to “outdated” planning regulations and statements  

Report author and senior policy analyst Yonna Vitanova said: “The growth of much-needed energy storage projects, co-locating alongside wind and solar farms, is currently being hindered by out-dated policies and regulations which were drawn up in a different era.

“There isn’t even a clear definition of co-location applied consistently across planning policies, grid and market arrangements – which is one of the factors hindering the speed of deployment of co-located projects.” 

“Renewable energy developers should be able to include co-location in their business plans more easily, with a clearer rules and regulations being put in place to unleash the benefits which co-located projects can provide to the system and ultimately to consumers,” she added. 

 “Building a more flexible system by tackling the current barriers to co-location will require a coordinated effort and a holistic strategy cutting across markets, grid, planning and technical barriers, as this report shows. Although this is challenging, it will ultimately benefit billpayers in the long term by cutting electricity system costs.” 

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