By Paul Sheffield, Chief Operating Officer, Haven Power
According to UK greenhouse gas emissions figures, the combustion of fuel in public sector buildings directly accounts for 7.8 million tonnes of CO2 emissions and leads to an annual energy bill of more than £2 billion in England and Wales.
Therefore, driving energy efficiencies and reducing carbon emissions play a huge part in the public sector achieving a sustainable future. And it is leading by example by reducing greenhouse gas emissions in its own buildings, according to 2017 greenhouse gas emission figures. The intent to see a more efficient, less polluting future is clear. However, it can be difficult to decide which areas to focus on and how to prioritise budgets in order to gain the best returns in reduced carbon and increased energy efficiency.
One potential area of focus on is battery storage technology. Planning applications for battery storage capacity in the UK rose from just 2MW in 2012 to a cumulative total of 6,874MW in 2018 according to renewableUK.
So, how can public sector organisations harness this technology to reduce carbon emissions and improve energy efficiency, as well as becoming more resilient to fluctuating energy prices, and reducing their reliance on the grid?
Technology is moving forward
Battery costs have dropped significantly in recent years, largely driven by economies of scale in the electric vehicle industry. In fact, according to the Guardian, prices have fallen by more than €1,000 per kilowatt of energy capacity from 2010, to about €150-200 per kWh today. Additionally, lithium-ion batteries have been maximised in terms of charge speed and energy capacity over the last few decades.
Batteries are integral to electric vehicles (EVs) and the government is planning for the public sector to ‘lead the way’ by increasing the use of these vehicles in their own fleets. Many EVs are becoming quick to charge and smart chargers make it possible to avoid peak charges on the grid. And the EV batteries can be used in the same way as any battery storage technology — providing energy for public sector estates during peak times or even putting energy back into the grid — a process known as vehicle-grid technology.
Battery technology can also be put to use to enhance the function of sustainable sources such as wind and solar power. Although renewable, they are an intermittent and unreliable sole source of energy supply. But solar power is a low maintenance and effective form of energy supply when used in conjunction with battery storage as electricity generated via solar power can be stored for later use. Solar technology has also moved on significantly in the last ten years — and prices have dropped by 70% since 2010— leading to 3.4% of the UK’s total electricity now being generated via solar panels.
Public sector organisations are well positioned to use the technology for their own energy consumption and storage, but the benefits in terms of energy resilience, cost and sustainability need to be identified before embarking on any strategy.
Maximising cost savings
Across the UK, electricity demand reaches a high from 4-7pm which leads to higher prices due to high third-party costs at this time. These costs are passed on by all electricity suppliers, so there is no way to avoid them during this period. However, switching to battery storage can help avoid these peak times and lead to large cost savings.
Additionally, each winter season (running from November to the end of February), the National Grid retrospectively identifies the three half-hour periods – called Triads – with the highest system demand. These Triads are then used to calculate Transmission Network Use of System (TNUoS) charges for medium and large-sized businesses, including public sector organisations, based upon consumption during these three half-hours.
By stopping or reducing consumption from the National Grid during predicted Triad periods – potentially by using battery stored energy – a public sector organisation could reduce its TNUoS charges and achieve significant savings.
Demand Side Response (DSR)
DSR rewards organisations financially for switching their electricity use at certain times. Balancing the flow of power through the Grid is enormously challenging and DSR can be used to balance peak demand.
The rewards increase according to how rapidly an organisation can switch its electricity use. Some use automated systems to switch at less than a second’s notice. Others adopt a simpler approach, but all benefit financially. And the rewards increase accordingly for organisations which also sell some electricity back to the Grid. In summary storing, and possibly generating renewable power, not only meets reduced CO2 government targets, but also has the benefit of generating income for public sector organisations.
Batteries for the future
The UK energy landscape is changing and with political instability around the world, wholesale energy prices are set to rise. And although Feed in Tariffs (FiTs) can no longer be claimed for new solar power installations, the business use case is still strong. When used together, solar and battery storage technology maximise cost savings. Furthermore, installation costs are falling all the time and are likely to keep on doing so. Additionally, the public sector can take advantage of energy performance contracts (EPCs) to finance the technology. These contracts have the benefit of no up-front costs, while delivering immediate cost savings, reduced carbon emissions and improved energy efficiencies. And these can be realised as soon as the installation is up and running.
These factors have created an ideal landscape for public sector organisations to consider adopting battery storage as a way to reduce their costs and emissions. In addition, choosing an energy supplier which can optimise the battery by carrying out in-day trading and provide day ahead pricing, can assist public sector organisations to maximise these savings by informing when to buy and when to rely on battery-stored electricity. Suppliers should also provide reporting which shows energy use from renewables and can be fed into an organisation’s total emissions report.
Battery technology is certainly here to stay — it is attracting $620 billion of investment over the next 22 years according to Bloomberg. Expect to see lower costs, and innovative solutions which help to optimise both battery performance and charging times.
And the public sector is ahead of most in the EV revolution — there are around 75,000 central and local government fleet vehicles and the government has committed to making 25% of its central vehicle fleet electric by 2022. The sector is already a leader in driving sustainability through EV battery technology — battery storage installations should be the next step.