Energy storage: the innovation boom

Everybody understands that free markets are driven by the basic principles of supply and demand. Where demand for goods or commodities are not met by supply, the cost or value of these rises accordingly.

Similarly if there is excess supply the cost or value can fall. So, whenever there is disparity between supply and demand a commercial opportunity exists.

This principle applies to the energy markets. How can you make the most of the commercial opportunity which exists when disparity occurs? What do you need in order to sell (or use) energy when the price is high and buy (or store) when the price is low?

Part of the answer in the energy market is energy storage. Energy storage is a generic term which describes the concept of storing energy (in one of its many forms) in times of plenty so that it can be used later. Common forms include:


  • Chemical Storage – batteries, flow batteries

  • Potential Storage – compressed air, pumped hydro

  • Kinetic Storage – flywheels

  • Thermal Storage – heat (hot water, solid thermal mass, the ground) and cooling (ice storage, the ground).

Learn more about energy storage.

As it is not currently possible to store energy in the form of electricity, demand needs to be met instantaneously by electricity generation plant. Plus the increasing capacity of intermittent renewable energy means that we now have a greater degree of variability on the generation (supply) side of the equation as well as the demand side. Basically, the frequency and scale of the disparity between demand and supply are greater than ever and growing, which means that the commercial opportunity is also growing.

Greg Barker has previously stated that energy storage has the potential to save the energy system over £4billion by 2050(1) and recently the Electricity Storage Network reported that the application of energy storage technologies for renewable sources could potentially generate a total systems saving of £10billion per year by 2050(2). This illustrates the potential value of energy storage going forward.

Storing energy efficiently, safely and cost effectively is technically challenging. In response to this issue and spurred on by the massive commercial opportunity, new energy conversion and storage technologies are now being developed. This should mean that energy storage becomes more accessible to businesses. Examples include increasing interest in power to gas (P2G) where renewable electricity is converted in to hydrogen gas or synthetic methane which is either stored on site or injected in to the gas grid, effectively storing renewable electricity for later.

There have also been a number of high profile demonstrator projects showing that battery storage and liquid air storage can be viable at scale. It should come as no surprise that energy and its storage is the fastest growing area of innovation worldwide measured by the percentage increase in the number of patents filed(3)

The other part of the answer, aside from technical advancements, is the regulatory framework and policies which will allow companies to install and benefit from energy storage systems. One recent policy development, Electricity Market Reform (EMR), has given rise to the Capacity Market which incentivises and rewards businesses for responding to calls to generate electricity or turn-down electricity consumption.

Energy storage would allow an organisation to generate power and use it on-site or export or store it for future on-site use or export when market conditions are favourable. At each stage there is the potential to benefit financially from additional revenue streams, reduced energy costs and increased security of energy supply through the conversion, storage, use and export of energy.

Most organisations could benefit from energy storage to some degree. The key question is what is the financial justification to invest in these systems? EDF Energy is investing in energy storage on its own estate as well as developing solutions for its business customers. From our experience, evaluation of whether your organisation could benefit from energy storage should consider the following:

  1. What is your current energy profile for heating, cooling and power (by minute, hour, day, week, month and year)?

  2. What degree of flexibility could you tolerate – are you able to turn-down demand or shift it to another point in time?

  3. What type and capacity of energy generation/conversion technologies do you currently have on site and what are your future plans?

  4. What financial incentives are applicable to your organisation and how can you access them?

Or alternatively speak to our experts who can help you understand the size of the opportunity for your organisation.

Posted by Daniel Bentham, Head of R&D Smart Customers at EDF Energy

Dan Bentham MEng CEng MEI Chartered Energy Engineer, has worked in the low carbon energy sector for over 10 years. He is currently responsible for the research and development of future energy systems and technologies such as Smart Cities, Smart Grids, Smart Businesses, Smart Metering, Connected Homes, Low Carbon Transport and Energy Storage for the UK market.


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