Getting to net zero power is an enormous challenge. As set out in the Government’s recently published Clean Power 2030 plan, battery storage will play a critical part in system decarbonisation. Batteries enable the system to absorb cheap (and often free) power flowing from renewables generation at times of excess supply, and then release this back into the grid at times of shortage. Batteries, therefore, don’t just help optimise our use of zero carbon power but also help to reduce price spikes, keeping customer bills down.
The problem is that batteries keep being ‘skipped’ in the power balancing mechanism controlled by the National Energy System Operator (NESO). Legacy systems and procedures get in the way. According to the most recent data from Modo Energy, battery utilisation is languishing at just 10% of available capacity; and 70-80% of ‘in-merit’ battery power is being skipped.
While these figures are an improvement over a year ago, we believe more can be done to unlock battery storage to support both decarbonisation and the delivery of cheaper power. We were pleased to see this issue highlighted by NESO in its response to an industry letter last month but wish to underline the urgency of the matter as investors. With share prices in battery power sector down over 20% per year over past three years and a further 47% year to date, many investors are clearly already turning their back on the sector.
As Mission Control and NESO map out their priorities for the coming year, we have written to both to request that battery skipping comes top of the to-do list. While fixing battery skipping may not make for grand headlines, it is likely to offer one of the cheapest and easiest actions to generate early momentum in transforming the UK’s power system. It should not be delayed.
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