National Grid has significantly scaled back its forecasts for the build-up of storage capacity in its latest annual Future Energy Scenarios report.
The system operator still expects to see “strong initial growth” in all four of its main scenarios in the 2020s, before deployments taper off as the market becomes saturated.
The lowest level of electricity storage is seen in the “steady state” scenario, which describes a future in which both prosperity and green ambitions are limited. In this world, storage capacity reaches just 5.2GW by 2050.
Deployments are expected to be highest in the “consumer power” scenario, in which there is strong economic growth but little focus on sustainability. Storage capacity rises to 10.7GW as large volumes of distributed generation, solar in particular, create favourable conditions for the stacking of revenues.
By comparison, the previous Future Energy Scenarios report projected storage capacity to rise to between 3GW and 11GW by 2030, and between 3.6GW and 18GW by 2040.
Storage capacity to 2050
Source: Future Energy Scenarios, National Grid
Explaining the reduction at the launch event for this year’s report, National Grid head of energy insights Marcus Stewart said: “Last year was the first year we included battery storage in the scenario modelling. We had a reasonably simplistic approach… This year we’ve built on that and improved our modelling in this area.”
Dispatch modelling was used to determine the amount of storage capacity which would be required in the different scenarios to smooth generation. “Beyond this required capacity, any additional storage will absorb revenue from other storage or flexibility providers, meaning that projects are less likely to be economically viable,” the report states.
The document says there has been “limited progress” on the required policy and regulatory changes identified in the previous report, such as the removal of double charging and a clearer definition for storage. It says storage providers also would benefit from greater “rationalisation, standardization and clarity” in the flexibility market.