Building on our previous bulletin where we looked at installation of rooftop Solar PV, we now turn to the topic of flexibility, focussing on battery energy storage technologies (BESS) as a key technology for the energy transition, enabling flexibility in real-time by shifting the time-of-use of energy to when is most efficient. This allows for multiple benefits for energy intensive industries and logistics hubs including:
- Maximising self-consumption of renewable energy and reducing reliance on the electricity grid to counteract outages risk and exposure to wholesale market pricing peaks.
- Enabling optimisation functions and managing infrastructure constraints on the grid or private networks.
- Providing instant back-up power.
- Opening potential new revenue streams providing capacity or flexibility services to grid operators.
The range of benefits that BESS systems can provide means they should be carefully considered by site owners and operators, especially for sites:
- with intensive or critical power demand requirements;
- with renewable generation on site or planned;
- that are facing delays or an inability to obtain a connection to the grid at the required import export/capacity;
- installing additional intensive and fluctuating power demands (such as EV charging);
- that are looking to procure optimisation and load management services; and
- where onsite security of supply is sufficient to allow the BESS to commit to various ancillary markets.
In the context of a highly regulated electricity sector, it should be noted that The Energy Act 2023 has clarified that energy storage is a subset of "generation" for regulatory purposes – meaning that, unless covered by an exemption, an operator of a BESS will require a generation licence.
One key difference between BESS and other forms of generation is that BESS is a reactive technology that only charges or discharges on command. Most owners will likely need to procure a service provider to manage the operational activities of a BESS, especially looking to take part in developing and highly regulated markets to create additional revenue streams for the owner.
BESS operations will likely sit within a framework of onsite activities, so regulatory and commercial contracting structures should be reviewed at an early stage to ensure the planned BESS can be installed and operated effectively as intended.
