Blog

The below Parliamentary question was asked by Alan Brown on 2015-11-05.

To ask the Secretary of State for Energy and Climate Change, what comparative cost-benefit analyses her Department has made of electricity storage and constraint payments.

Andrea Leadsom

The Network Options Assessment (NOA) was introduced as a result of Ofgem’s Integrated Transmission Planning and Regulation project.It is an holistic, forward-looking analysis of the options for the development of the transmission system.The NOA has a 10-year outlook and will be published annually.In developing the annual statement, National Grid as System Operator must work closely with the three GB transmission operators to propose network solutions which facilitate an efficient, coordinated and economical system of electricity transmission. As part of this process, National Grid is required to consider the merits of solutions other than transmission build, such as storage. A cost-benefit analysis of storage compared to other assets is performed by National Grid as a part of this assessment, in which constraint payments form a part.

The below Parliamentary question was asked by Alan Brown on 2015-11-05.

To ask the Secretary of State for Energy and Climate Change, what assessment her Department has made of the merits of exempting operators of electricity storage from Balanced Services Use of System charges.

Andrea Leadsom

The Department and Ofgem are jointly considering the need to address the legislative status of storage, which has potential implications for the charging regime for storage. Ofgem have recently published “Making the electricity system more flexible and delivering the benefits for consumers”, in which they state, “While storage has been providing flexibility in other countries, and pumped storage has historically played a strong role in GB, the potential of battery and other forms of storage to smooth intermittent generation or contribute to local balancing has not yet been fully realised in the UK… We will therefore: undertake work with DECC to clarify the legal and commercial status of storage and explore whether changes to the regulatory and commercial framework are needed to enable its efficient use, seeking input on options from stakeholders. Where changes are needed, they will be informed by considering the interactions and implications of a new regulatory framework for storage on all segments of the market”:

https://www.ofgem.gov.uk/sites/default/files/docs/2015/09/flexibility_position_paper_final_0.pdf.

“

The below Parliamentary question was asked by Alan Brown on 2015-11-05.

To ask the Secretary of State for Energy and Climate Change, what estimate her Department has made of the likely effect on household electricity bills of the agreement of a £92.50 MWh rate for the proposed Hinkley Point C nuclear power station.

Andrea Leadsom

Under the CfD consumers will not pay anything for electricity until the plant is powering their homes and businesses. Payments under the CfD are expected to make up around £10 (real 2012 prices) of the average household energy bill in 2030. This should be seen in the context of Hinkley Point C meeting 7% of the UK’s energy needs, and set against our estimate that a new nuclear programme could reduce average household bills by up to around £30 in 2030. This is calculated by comparing the costs for consumers in a modelled scenario for the future electricity mix with Hinkley Point C and a further role out of the new nuclear programme with the cost for consumers in a scenario where there are no new nuclear power stations by 2030. Savings could be higher or lower depending on changes in the cost of alternative generation technologies and what mix of technologies would ultimately be used.

The below Parliamentary question was asked by Alan Brown on 2015-11-05.

To ask the Secretary of State for Energy and Climate Change, what assessment her Department has made of the comparative merits of electricity storage and transmission network upgrades.

Andrea Leadsom

The Network Options Assessment (NOA) was introduced as a result of Ofgem’s Integrated Transmission Planning and Regulation project.It is an holistic, forward-looking analysis of the options for the development of the transmission system.The NOA has a 10-year outlook and will be published annually.In developing the annual statement, National Grid as System Operator must work closely with the three GB transmission operators to propose network solutions which facilitate an efficient, coordinated and economical system of electricity transmission. As part of this process, National Grid is required to consider the merits of solutions other than transmission build, such as storage. A cost-benefit analysis of storage compared to other assets is performed by National Grid as a part of this assessment, in which constraint payments form a part.

The below Parliamentary question was asked by Alan Brown on 2015-11-05.

To ask the Secretary of State for Energy and Climate Change, what steps her Department is taking to identify locations for potential electricity storage schemes that would best supplement the existing National Grid system.

Andrea Leadsom

The Department has recently commissioned a study to assess the level of system flexibility (e.g. electricity storage, interconnection, demand side response) that may be required in the future. This study will consider how much and what type of flexibility is both least regrets and optimal for our energy system. This study is expected to conclude in the spring.

In addition, with support from a DECC innovation grant, a UK pumped hydro storage developer has assessed the potential viability of new pumped hydro sites around Great Britain. They concluded that up to 15GW of potential additional pumped storage capacity was available, using various criteria such as the presence of existing or potential reservoirs, grid connection distance and whether the site was in an environmentally sensitive area. Other pumped storage developers have independently identified over 1 GW of additional potential storage capacity.