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Energy: Storage

Volume 778: debated on Wednesday 1 February 2017


Asked by

To ask Her Majesty’s Government what action they are taking to address regulatory, economic and market barriers to energy storage.

My Lords, my department and Ofgem recently held a joint call for evidence on a proposed approach for addressing these barriers. A smart systems plan will be published in the spring setting out specific measures to be taken forward.

I thank the Minister for that Answer. Can he assure me that in the Government’s response to that call for evidence we will see the introduction of a regulatory definition for energy storage that will, among other benefits, eliminate the double charging that is currently imposed on such facilities?

In paragraph 32 on page 34 of the call for evidence there is a suggested definition of storage. That is very much part of the consultation, and we will have a very firm view on that definition. Clearly removing the double charging where people who are operating storage also have to pay the end consumption levies is something for which we will have clear plans when we publish our response to the call for evidence.

My Lords, with the exception of pump storage, is it not the case that genuinely commercial storage systems for electricity do not exist, even to compensate for unreliable renewable energy?

My Lords, as my noble friend will know, there are developments in new battery technology, such as lithium ion, which is a new technology that holds out huge hopes not just for powering electric vehicles but for storing energy, which could then be fed into the grid. The regulatory system is running behind the new technology, if you like, which is why we have issued the call for evidence.

My Lords, this is indeed a very complex area. To allow greater deployment, a new definition for storage should be developed to reflect its role in generation, demand and providing network balance. Does the Minister agree that the licensing of storage under the Electricity Act should be a special flexible case to allow these roles to develop?

My Lords, battery technology could offer huge benefits to the way that we both generate and store electricity and could provide better capacity to our electricity system in the UK. It could also enable us better to deal with the more intermittent nature of some renewable energy. The work done by Imperial College indicates that the savings per annum for producing electricity in this country could run at between £1 billion and £2 billion a year, so it is very important that we get the regulatory system right.

My Lord, the Government recently announced a special tariff addition to people’s electricity bills to cover emergency stand-by generation to meet the peaks in—I think this was the wording—“weekday evenings”. Apparently, they are particularly targeting coal-fired power stations and nuclear power stations. How do you switch them on and off just like that for a peak in one evening?

My Lords, I do not think that there is any intention to switch nuclear power stations on and off to cover short-term peaks in demand; coal-fired generation, on the other hand, is much more flexible in that regard. The whole point of these new smart systems is to allow much better demand management over the peaks and troughs of energy demand so that, hopefully, we will need less generation capacity in the future than we have done in the past.

My Lords, further to my noble friend’s last question, I believe that we are still using a good deal of nuclear energy—usually electricity—from France. Are we making any contingency arrangements, should there be problems post Brexit over the fact that we rely upon that source of energy?

My Lords, if there is any issue about availability of supplies from France, it probably relates more to the fact that a number of France’s nuclear plants are nearing the end of their lives than to anything that comes out of Brexit. In fact, as the noble Lord may know, we are investing in more interconnector capacity, which would increase the capacity from 2,200 megawatts to more than 7,000 megawatts. Again, that should reduce the cost of electricity to our consumers.

My Lords, I do not hear the Government talking much about microgeneration, which provides a real opportunity to get local people to invest. Is that something that the Minister’s department is looking at?

My Lords, again, the development of battery technology and electric vehicles means that every consumer in the country could become a small generator in due course and be able not only to take electricity from the grid during downtimes but also to feed back energy from their electric car or their own battery in their own home during peak times. We are looking at, I think, a revolution in the way that we manage electricity in this country.