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Energy storage is a key area for the UK government to explore the energy transition
The Energy Networks Association (ENA) has called on the UK government to update its energy security strategy and wants a storage strategy in place by 2023.The association believes the commitment should be published in the upcoming spring budget, which is scheduled for March 15, 2023.
Energy storage is a key area for the UK government to explore the energy transition, which could not only help achieve net zero targets, but also increase flexibility options for the grid. Energy storage systems will be a key part of the UK's future energy system because of their ability to store electricity from renewable sources to meet peak power demand.However, the UK Energy Networks Association (ENA) says that in order to really boost the growth of this emerging industry, the UK must clearly define which business model will be developed to ensure investment in seasonal storage systems.Doing so can help boost investment and innovation in the energy storage sector and support the UK's long-term energy goals.
Cornwall Insight, a consultancy, highlighted the need for greater UK investment in energy storage. In May 2022, the company said that a fifth of the UK government's total investment in energy technology between 2025 and 2030 must be spent on the deployment of battery storage systems to help meet the net-zero target.The UK government aims to deploy 50GW of offshore wind capacity by 2030, a target set out in the UK's energy security strategy.
Although installed capacity of deployed battery storage systems is expected to grow in the near future, with 2.6GW of additional battery storage systems being auctioned in the UK T-4 2025/26 capacity market, Cornwall Insight shows that this growth trajectory will be needed to continue to meet the demand of the energy market.
In addition to the commitment to storage deployment, the UK Energy Networks Association (ENA) also believes that private investment must be unlocked through energy network companies to build and transform the capacity of the grid.
Several commitments were highlighted, including regulatory reform, accelerating investment in hydrogen network infrastructure, reforming land rights and agreeing to build energy network infrastructure.
The regulatory reforms will include updating the remit of the Office of Gas and Electricity Markets (OFGEM) to incorporate the government's net zero target set out in the 2008 Climate Change Act. This includes reducing greenhouse gas emissions to at least 1990 emissions levels by 2050.Doing so will boost confidence in achieving the UK's net zero target and support a long-term strategy.
Alongside this, the UK government should provide guidance to OFGEM through a strategy and policy statement to unlock strategic energy network infrastructure investment.The upcoming spring budget should also emphasize the importance of hydrogen production, which has the ability to decarbonize various industries that are difficult to reduce emissions. Development of a regulated hydrogen network infrastructure asset-based business model should be accelerated and interim measures introduced pending the finalisation of the business model, according to the UK Energy Networks Association (ENA).
The UK should also develop a business model to support hydrogen producers in mixing hydrogen into the gas transmission network. Both measures could help the UK meet its 2030 hydrogen target set out in the UK Energy Security Strategy.
Energy Networks UK also called on the government to overhaul the planning system for the energy network. To this end, the association is calling for reform of the Planning and Electricity Act so that electricity infrastructure can be installed and maintained in a timely and cost-effective manner.Meanwhile, the UK Energy Networks Association (ENA) said there needed to be increased confidence in innovative funding to boost energy network infrastructure before renewable energy projects could enter the UK power system on a large scale.Increasing confidence in this regard could be achieved by confirming the extension of energy Network innovation subsidies until 2026 or by confirming the Government's intention to develop follow-up subsidies of a similar nature.
The UK government's spring budget must also include a commitment to develop new smart energy markets to maximise the capacity of energy network infrastructure, according to the UK Energy Networks Association (ENA). This commitment can be achieved in a range of different ways. These include the introduction of new financial support, subsidies, incentives or business models to reduce the upfront costs of smart user-side low-carbon technologies for households and businesses.
On top of this, the UK government should also ensure that the new low-carbon technologies installed by homes and businesses are smart to ensure they can participate in a flexible market. A final measure should consider licensing requirements for energy providers to provide flexible electricity services to household users.
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