Two years ago, battery storage enjoyed a quite different environment.
National Grid was offering attractively priced, bilateral Firm Frequency Response (FFR) contracts, so anyone on the enduring market could easily capture prices between £15/MWh and £25/MWh (and sometimes even higher). The Enhanced Frequency Response (EFR) tender also awarded 4-year contracts with an average price of £9.44/MWh to 201MW of storage projects. Back then, we were shocked by how low the price was, but over time, the price has only continued to fall.
Similarly, the lowest T-1 Capacity Market (CM) clearing price was £6.95/kW – which was again met with disbelief – whilst the T-4 prices stayed strong at around the £20/kW mark and battery de-rating was nothing but a rumour.
In short, high prices, long-term contracts and limited supply made a strong case to support any battery storage project in 2017.
With a current pipeline of almost 5GW of storage projects in various stages of development in the UK, the interest in this technology is very much alive and well. Battery pack costs continue to decline and the relentless march towards a carbon-free, renewables dominated system only reiterates the important role that flexibility (i.e. batteries) will play in the near future.
Although the fundamentals supporting the case of large-scale utility storage have remained largely consistent throughout the last few years, a lot has changed since 2017.
Read more: Current News