COP28: We need to more firmly add energy storage to the energy transition toolbox

Written By: Luke Gibson
Posted 05 Dec 2023
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Two years ago, just before the UK hosted COP26, we argued that energy storage needed to be a bigger part of the conversation on how we tackle the climate crisis.

In the UK alone, a target has been set to connect 50 GW of offshore wind to the grid by 2030, as well as lots more onshore wind and solar capacity. Storage, in the form of batteries and other technologies, will make that extra renewable capacity more effective, and lower both the cost of electricity and its carbon intensity.

So, two years on from COP26, where do we stand?

At Field, our batteries have started to play a critical role in the GB electricity grid. Since we started, we’ve always been keen to prioritise tangible action over big vision statements. Every time we (or other developers) bring a new project online, we’re a little bit closer to creating a net zero energy system.

Our first battery storage project, in Oldham near Manchester, has been up and running for around a year. We’ve raised over £250m in capital (equity) over two separate funding rounds, alongside debt, to construct storage assets across the UK. And we’ve expanded Field into other European countries (Italy, Spain and Germany) that face similar grid operability challenges, and the inherent need for storage. Several other companies are driving the deployment of storage too, in a positive sign that interest in this technology is accelerating.

COP28 is now underway in Dubai and the key day for the renewables industry is 5th December – Energy Day. The official schedule that day is packed full of events covering how to decarbonise and electrify heavy industry, invest in innovative and emerging technologies, accelerate hydrogen deployment, “drive transformative change”, decarbonise heating, electrify cooking and reform electricity networks among other things.

Strangely, storage – its role, what it can do, and how to accelerate its deployment – looks fairly absent. Obviously, we’re somewhat biased as an energy storage company, but we strongly believe storage needs elevating in any discussion of decarbonisation and climate action.

As COP28 continues, here are a few reasons why that’s the case.

Storage is recognised as vital to achieving net zero

BloombergNEF data shows that battery storage needs to grow to 720 GW worldwide to support a target to triple renewable capacity by 2030. If the world can hit these targets, then reaching net zero emissions globally by 2050 becomes a realistic goal.

However, tripling renewable capacity is only sufficient to hit that goal if the investment in storage goes with it. Reaching 720 GW of storage means we need to build 16x the battery storage capacity we have today over the next seven years.

The incentive for investors seems obvious. Backing batteries, as pieces of critical infrastructure for a net zero energy system, offers significant financial and environmental benefits.

Storage also helps reduce both energy bills and carbon emissions

This summer, a group of European solar and renewable trade associations wrote to the EU Energy Commissioner to argue for urgent action on the problem of curtailment (deliberately switching off solar and wind farms when they produce more electricity than the grid needs).

In the UK, Carbon Tracker estimated that this problem could cost the country (and its energy bill payers) £3.5 billion a year by 2030. The solution?

Build more storage, quickly, to absorb that excess electricity and use it later when needed. Doing so would also avoid 6.8 million tonnes of emissions in the UK alone, without even thinking about the potential cost savings.

Storage + renewables may enable some countries to leapfrog the interim step of gas dependency

Many countries increasingly talk about gas as a transition fuel, using it to generate power and heat buildings while welcoming its lower carbon footprint compared to coal or oil. While true, gas still creates significant carbon emissions. It too needs phasing out.

Developing countries have the opportunity to bypass this by leapfrogging straight over gas, from coal and oil-based economies to ones primarily built on renewables and storage.

We see this as a win-win: domestically, these countries end up with greater energy self-reliance and more efficient spending on energy infrastructure. And globally, we accelerate emissions reductions.

What we want to see at COP28

Even if the level of discussion on energy storage isn’t as high as we’d like it to be, there are still several things we strongly want to see emerge from the COP28 discussions. These include:

  1. Policy commitments: We need to create the right market conditions to enable energy storage to scale up alongside renewable generation. To do so, we need the right regulatory and economic mechanisms to allow assets to be financed and constructed quickly. There are few things that can make a big difference
    1. Speed up planning: We need governments to understand the value of critical infrastructure, and develop sensible (but accelerated) planning process for renewable assets, including storage.
    2. Speed up grid connection timelines: We need grid operators to speed up grid connection timelines, and also give grid operators the power to drop grid speculators from the queue (i.e. implement "use it, or lose it" grid connection policies, or formal grid auction processes.
    3. Develop new market mechanisms for storage: We need all countries to recognise the full value that storage brings to the system by providing attractive market mechanisms and/or stackable revenue streams, that enable lower cost financing. These could be via long term contracted revenue schemes (such as the upcoming Article 18 in Italy), or the Capacity Market (offered to varying degrees in a number of countries), or capex subsidies for storage (as we saw in the recent Spain storage tender), or specific tenders for more critical issues that batteries can help to manage (black start, voltage issues, inertia provision, to name a few) such as we have seen with the recent grid booster pilot in Germany (enabling more efficient use of existing transmission infrastructure) and GB's Pathfinder Phase III tender (inertia/short circuit level provision).
  2. Climate finance: A lot of developed countries have backtracked on previous pledges to provide climate finance funding globally. Much of this funding will be used to accelerate renewable and storage deployment in developing economies. It needs to be re-committed urgently.
  3. Backing commitments with action: The one thing Energy Day at COP isn’t short of are new ideas to accelerate decarbonisation. We need countries, companies and investors to be bold and follow through with action - deciding when and where new critical infrastructure can be built and what support can be offered to help new technologies to scale up manufacturing capabilities quickly.

This article was originally published by Field COO, Luke Gibson on LinkedIn.