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Quantifying the impact of policy on the investment case for residential electricity storage in the UK

Title: Quantifying the impact of policy on the investment case for residential electricity storage in the UK
Authors: Gardiner, D
Schmidt, O
Heptonstall, P
Gross, R
Staffell, I
Item 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.
Issue Date: Feb-2020
Date of Acceptance: 5-Dec-2019
URI: http://hdl.handle.net/10044/1/75516
DOI: 10.1016/j.est.2019.101140
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/Funder: Engineering & Physical Science Research Council (EPSRC)
Funder's Grant Number: EP/R045518/1
Publication Status: Accepted
Article Number: ARTN 101140
Online Publication Date: 2019-12-24
Appears in Collections:Centre for Environmental Policy
Faculty of Natural Sciences