Despite structural challenges in the UK, market-ready AI technology offers a game-changing stimulus for BESS operators and investors
Flux in the global energy market has become normalised during the past two years, reducing the clarity of the role of renewables in the energy mix. And over this period of volatility, clean energy has been regarded as everything from strategic imperative for energy security to being too long-tail to offer remediation to the threat of immediate supply-side shortages.
Despite this, a new normal has begun to take shape with many economies deploying significant subsidies to stimulate renewable energy investments. While China has been busy incentivising its entire renewables supply chain for years, the Biden Inflation Reduction Act and its ‘matching’ by the EU just over 12 months ago brought the world’s three most significant trading blocs into broad, subsidising alignment in each of their respective economies.
Meanwhile, one of the first mover markets in renewable power generation, the UK, has been pegged back in the absence of comparable investment incentives. Without equivalent subsidies, the UK has dropped from a leadership position to eighth in EY’s latest Renewable Energy Country Attractiveness Index.
The report cites the ‘failure of Contracts for Difference (CfD) Round 5 to attract new offshore wind capacity, plus the diminishing of green policies, leaving investors with reduced confidence in UK renewables’. And industry agrees too. The UK Sustainable Investment and Finance Association, which represents £19 trillion of investments, reports that 87% of UK energy businesses agree that changes to policy are essential to make the UK an attractive investment location for green energy.
With the UK languishing in the global marketplace while US customers benefit from battery packs discounted by an effective 45%, technologists point to other ways to sharpen up the sector’s competitive edge without waiting for government handouts. While renewable energy generation technologies have become progressively more optimised, the same cannot be said for the essential – but sometimes overlooked – energy storage technologies that constitute a critical part of the investment case for both operators and investors. And that criticality is growing as the grid struggles to contend as new renewable capacity comes on stream. This has been drawn into sharp focus by data from the electricity system’s balancing market platform, Elexon, that showed in 2022 how the National Grid spent £215m paying wind generators to stop generating power while turning on gas-fired power at an additional cost of £717m.
Stationary storage is therefore an essential component to buffer energy generation from supply and provide a controllable way to balance the renewables contribution to the grid.
So, while the role of storage is incontestable, it had until recently been something of a spanner in the works for investors. That’s because the grid-scale batteries that make up stationary storage don’t last as long as the systems they power. Much to investors’ and operators’ distaste, the only solution to this functional shortcoming is to either oversize the capacity of battery storage solutions at the point of commission by an order of 30 to 50%, or augment deteriorating battery capability partway through the storage facility lifecycle. According to the National Renewable Energy Laboratory, this adds 20 to 30% to a storage project cost – or in hard numbers, another $58.2m to supplement a typical 400MWh, 4-hour system.
However, this challenge has been addressed by market-ready tech that embraces AI to significantly mitigate the oversizing conundrum. Adrien Bizeray, Co-Founder and Chief Data Scientist at Oxford-based Brill Power explains: “Artificial intelligence has a crucial role to play in enhancing the efficiency of battery systems. By identifying latent weaknesses within battery energy storage systems, our AI system mitigates factors that impair overall system performance. Acting as a vigilant monitor, this allows us to detect anomalies early and enables more effective management of conditions that could compromise battery performance.“
Bizeray points to independent validation of Brill’s battery management toolset that can significantly reduce $58m of battery augmentation needed to make a battery last as long as the systems it powers by intelligently managing the load and discharge cycles of the battery. The full suite of Brill technologies provides up to 46% better battery performance, up to 60% longer battery life, and 30% lower lifetime costs.
For investors seeking to avoid the ‘black box economics’ of BESS systems, Bizeray adds: “AI models also contribute to a deeper understanding of the cost dynamics associated with energy storage asset usage. By providing insights into battery degradation and remaining useful life of systems, owners can make better-informed decisions about usage strategy, improving margins and boosting ROI..”
As storage assets become increasingly more important to solve strategic grid problems while the market simultaneously demands end-to-end efficiency from renewables, optimising the performance of BESS using homegrown AI technology looks to be one route to the UK reasserting some form of leadership in the eye of the renewables investors.
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