Quantifying the impact of policy on the investment case for residential electricity storage in the UK
Author(s)
Gardiner, Dan
Schmidt, Oliver
Heptonstall, Philip
Gross, Robert
Staffell, Iain
Type
Journal Article
Abstract
Electrical energy storage has a critical role in future energy systems, but deployment is constrained by high costs and barriers to ‘stacking’ multiple revenue streams. We analyse the effects of different policy measures and revenue stacking on the economics of residential electricity storage in the UK. We identify six policy interventions through industry interviews and quantify their impact using a techno-economic model of a 4kWh battery paired with a 4kW solar system. Without policy intervention, residential batteries are not currently financially viable in the UK. Policies that enable access to multiple revenue streams, rather than just maximising PV self-consumption, improve this proposition. Demand Load-Shifting and Peak Shaving respectively increase the net present value per unit of investment cost (NPV/Capex) by 30% and 9% respectively. Given projected reductions in storage costs, stacking these services brings forward the break even date for residential batteries by 9 years to 2024, and increases the effectiveness of policies that reduce upfront costs, suggesting that current policy is correctly focused on enabling revenue stacking. However, additional support is needed to accelerate deployment in the near term. Combining revenue stacking with a subsidy of £250 per kWh or zero-interest loans could make residential storage profitable by 2020.
Date Issued
2020-02
Date Acceptance
2019-12-05
Citation
Journal of Energy Storage, 2020, 27
ISSN
2352-152X
Publisher
Elsevier
Journal / Book Title
Journal of Energy Storage
Volume
27
Copyright Statement
© 2019 Elsevier Ltd. All rights reserved. This manuscript is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Licence http://creativecommons.org/licenses/by-nc-nd/4.0/
Sponsor
Engineering & Physical Science Research Council (EPSRC)
Grant Number
EP/R045518/1
Publication Status
Accepted
Article Number
ARTN 101140
Date Publish Online
2019-12-24