Investing in the storage of clean energy is critical for the future of energy security and of our planet. While the last few years have seen tackling the climate crisis fly up the agenda, energy storage hasn’t been a big enough part of the conversation.
To reach net zero, we need to drive forward a huge change to our energy infrastructure in a very short amount of time. Energy storage solves the mismatch between intermittent renewable energy supply and varying electricity demand, so forms a critical piece of the net zero puzzle.
The reason Field exists is to provide the missing component that allows renewable energy generation to scale: batteries.
As we all know, the sun can’t always be shining and the wind can’t always be blowing, but that doesn’t mean the need for energy suddenly stops. So we need something to plug the gap - which is where our batteries (and other storage technologies) come in. They allow us to store energy when there’s more than we need and release it when we don’t have enough, ensuring demand for electricity can be met no matter the weather.
This makes our energy system more reliable and helps us move away from other more carbon-intensive technologies such as the gas peaking plants that are frequently used as an alternative solution.
Much more than just balancing supply and demand.
What many people don’t realise is that battery storage delivers value far beyond solving the problem of intermittent renewable supply. When the technology is harnessed properly, it can solve a whole host of the problems facing the energy system; a renewable Swiss Army knife of sorts.
What’s more, battery storage represents a significant commercial opportunity.
Let’s take a closer look, in approximate order of market size, at how we can use battery storage to generate strong returns on investment whilst also strengthening the energy system.
- Energy trading - This allows operators like us to generate revenue by charging up our batteries when electricity prices are low, and then discharging them when electricity prices are higher. This is the deepest market for energy storage.
- Frequency services - National Grid pays operators to ensure that the grid remains at a frequency of 49.5-50.5Hz, which is important for ensuring equipment in our thermal (e.g. nuclear) power stations and businesses works properly. This is a smaller market, which is reaching saturation in GB.
- Capacity market - Battery storage businesses can win long-term contracts of up to 15 years from the Government in which they’re paid a guaranteed revenue stream to provide power in the event of a short-term national energy shortage.
- Constraint management - We can also secure National Grid payments for charging our batteries to deal with thermal constraints (where too much renewable energy is being generated and it can't all be sent to where it's needed). By absorbing some of this excess energy, we prevent the need for more expensive solutions like shutting down renewable generators or using thermal generators that create more pollution. So overall it helps to reduce carbon emissions and make the grid more efficient.
- Reactive power and voltage control - The National Grid pays all transmission-connected generators for providing reactive power, which involves adjusting power output to keep the system voltage within statutory limits. Batteries are particularly good at this. This helps to ensure it can operate safely and efficiently, avoiding things like blackouts, equipment damage and power quality issues, which can happen when voltage becomes unstable.
- Inertia and stability management - Grid operators can make payments to battery operators whose services improve the stability and reliability of the grid during challenges such as a fault. These kinds of services fall into two main categories: through inertial response, where batteries provide synthetic inertia to stabilise the grid through fluctuations in supply or demand; and short-circuit current infeed, where they provide high levels of power to stabilise the grid if there’s a short circuit. These innovative services are typically procured via industry tenders, and require specialist battery engineering and equipment.
- Restoration (aka Black Start) - Finally, grid operators pay providers of restoration services to enable the grid to be restarted in a full or partial blackout. Given their ability to provide frequency response and excellent reactive power capabilities, battery energy storage projects make excellent “top-up” service providers to stabilise the initial power islands that are formed. Larger projects that can provide inertia and inject significant fault current can also make excellent anchor generators.
The next big investment opportunity
Investing in battery storage comes with a host of ways to recoup costs and continue to generate higher and higher returns through varied revenue streams, whilst working towards a greener economy. For operators, this will result in a lucrative business model, and for investors, a highly rewarding investment - both financially and for the planet.
Costs per unit for energy storage projects are falling again, price volatility is paving the way for increased returns, and political and regulatory tailwinds are in our favour, making battery storage one of the most versatile and attractive impact investments around.
There’s no better time to commit to aligning capital wealth with planetary health.