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Publications / Blogs

Long duration energy storage: ‘frozen’ green electrons and the ‘decarbonisation dividend’  

Energy storage, put simply, is the ability to capture energy for use at a later time.

Energy storage can increase the resilience of a renewables-led system (‘keeping the lights on when the sun doesn’t shine and wind doesn’t blow’). It also retains value for ‘excess’ renewable output – storing green electrons (to be used later) when output is higher than demand, or when networks are congested. If energy storage can be achieve this at a lower overall cost than alternative approaches, it can drive value by reducing system costs.

At a recent select committee hearing[1], Laura Sandys CBE, Chair at Energy Digitalisation Taskforce referred to ‘the decarbonisation dividend.’ Whilst current energy bills are driven by global commodity prices, prices in a renewables-dominated system will be determined firstly by infrastructure costs and then by the costs of ‘keeping the lights on’ when renewables are not sufficient to meet demand. By making better use of the UK’s potential for abundant, low cost, renewable energy, energy storage can pass through more of this benefit to consumers (who ultimately underwrite these infrastructure costs).

Modelling[2] led by Professor Goran Strbac at Imperial College, London indicates that a future system with a high level of demand side flexibility, including energy storage, could deliver savings of around £17 billion per year by 2050. Whilst this includes reduced system costs (constraint and balancing costs exceeded £2 billion and £4 billion respectively last year), the main saving is from the lower requirement for generation and network infrastructure. This suggests that energy storage can enable a leaner ‘build-out’ without risking security of supply.

Whilst the definition can vary, long duration energy storage (LDES) usually refers to an ability to provide energy for over 4 hours. This is longer than other demand-side approaches such as demand side response (DSR), individual lithium-ion batteries (and often longer than interconnectors).

It can be useful to further segment LDES technologies into medium duration (4 to 200 hours) and longer duration (+200 hours). Whilst there are a range of medium duration technologies, hydrogen storage is the main storage technology for providing inter-seasonal resilience.

Laura Sandys describes the integral role of storage in a renewables-led system as analogous to refrigeration in the food sector explaining that before refrigeration, we wasted 60 percent of our food. In a similar way, long duration storage is like frozen food, reducing waste and improving system efficiency.

This analogy becomes all the more powerful when we contrast the need for flexibility in the 2035 system with today’s ‘on-demand’ energy system. Currently, flexibility is provided almost wholly on the supply-side (via dispatchable gas generation and via gas linepack in heating). By 2035, however electricity demand will be around fifty percent higher (driven by increased electrification of transport and heating) but with far ‘peakier’ supply, since the main source (around 70 percent) will be intermittent renewables rather than on-demand generation. Modelling by consultancy LCP Delta[3], for example, suggests that by 2030,[4] output from renewables will exceed demand around half the time. If this cannot be stored  (or demand ‘flexed’ to absorb it), it will increase rather than decrease system costs, reducing the overall ‘decarbonisation dividend’.

This increased requirement for flexibility means that, as well as low carbon dispatchable generation (gas with combined capture and storage [CCUS], hydrogen and biofuel), we will need new demand-side approaches to maximise the value from our renewable energy infrastructure. This will include making demand more flexible (See our forthcoming blog on the future of the Demand Flexibility Service) and energy storage.

Whilst short duration storage technologies, such lithium-ion batteries, are commercially viable now[5], the UK Government acknowledged that LDES ‘face significant barriers to deployment under the current market framework due to their high upfront costs and a lack of forecastable revenue streams.’[6] In response, Government has committed to  ensure the deployment of sufficient LLES to balance the overall system by developing appropriate policy to enable investment by 2024’.

Whilst welcoming these conclusions, Energy UK urges an accelerated timeframe. Our members are at the forefront of many of these technologies (both established and emerging). A clearer indication of the likely approach to de-risk investment would support industry to ensure sufficient deployment by 2030 (by when the energy system could look very different). Delays here could result in an insufficient reserve storage capacity which could undermine energy security and reduce the ‘decarbonisation dividend’ for consumers.

Current deployment of LDES

The UK currently has around 3GW of large-scale, long-duration electricity storage. This is all pumped hydro storage, built before the privatisation of the electricity system.

The following categories can be used summarise LDES technologies:  

  1. Flow batteries – these work by converting electricity into chemical energy.
  2. Mechanical – these convert electricity into mechanical energy with the released energy is used to drive turbines or generators, producing electricity. These include flywheel storage, compressed air or liquid air storage, gravitational storage and pumped hydro.
  3. Thermal – these store energy as heat in various materials. Energy is then discharged directly into heat networks or reconverted into electricity.
  4. Hydrogen – Low-carbon hydrogen can be stored as a gas in underground salt caverns (or as ammonia or methane) and converted back to electricity when needed (power-X-power)

The UK Government is currently supporting the demonstration and commercialisation of new technologies  via the Longer Duration Energy Storage Demonstration Competition (LODES) which has provided £69 million in capital funding available to actual and prototype demonstrations. Examples include flow batteries, mechanical and thermal storage, and hydrogen.

Further links:

Department of Business, Energy and Industrial Strategy (BEIS): Facilitating the deployment of large-scale and long-duration electricity storage: initial government response (August 2022)

[1] BEIS Committee – Decarbonisation of the power sector, March 2023

[2] Flexibility in Great Britain report, Carbon Trust. 2022

[3] British Energy Security Strategy: Homegrown clean power, but at what cost? 20 April 2022

[4] If the renewable generation ambitions set out in the British Energy Security Strategy (April, 2022) are met

[5] Octopus Energy estimate that the electric vehicles connected to the grid by 2035 could be the equivalent of three nuclear power stations

[6] BEIS: Large-scale long duration electricity storage Government response: August 2022.