The role of large scale storage in a GB low carbon energy future: Issues and policy challenges

Large scale storage offers the prospect of capturing and using excess electricity within a low carbon energy system, which otherwise might have to be wasted. Incorporating the role of storage into current scenario tools is challenging, because it requires high temporal resolution to reflect the effects of intermittent sources on system balancing. This study draws on results from a model with such resolution. It concludes that large scale storage could become economically viable for scenarios with high penetration of renewables. As the proportion of intermittent sources increases, the optimal type of storage shifts towards solutions with low energy related costs, even at the expense of efficiency. However, a range of uncertainties have been identified, concerning storage technology development, the regulatory environment, alternatives to storage and the stochastic uncertainty of year-on-year revenues. All of these negatively affect the cost of finance and the chances of successful market uptake. We argue, therefore, that, if the possible wider system and social benefits from the presence of storage are to be achieved, stronger and more strategic policy support may be necessary. More work on the social and system benefits of storage is needed to gauge the appropriate extent of support measures. (C) 2011 Elsevier Ltd. All rights reserved.