UK Government Sets 8-Hour Minimum For LDES Cap-And-Floor Sheme
The title of this post, is the sa,e as that of this article on Energy Storage News.
This is the sub-heading.
The UK government has published a Technical Decision Document confirming crucial aspects of its long duration electricity storage (LDES) cap-and-floor scheme, which includes increasing the minimum duration required from six hours to eight
These paragraphs give full details.
The document, released by regulator Ofgem on 11 March, details the final overarching rules and requirements for the scheme as well as how it will be implemented, though significant detail still remains to be worked out.
The scheme will provide a cap-and-floor revenue protection for 20-25 years that will allow all capital costs to be recoverable, and is effectively a subsidy for LDES projects that may not be commercially viable without it. Most energy storage projects being deployed in the UK today are lithium-ion battery energy storage systems (BESS) of somewhere between 1-hour and 3-hour in duration (very occasionally higher).
One of the most significant new details of the scheme is that, following industry feedback, the minimum duration for projects to qualify has been increased from six hours to eight hours of continuous rated power.
The ‘continuous rated power’ aspect prevents shorter duration projects from bidding in a smaller section of their MW capacity in order to act like an 8-hour system.
Another interesting detail pointed out by several commentators is that the cap is a ‘soft’ one, meaning it will allow extra revenue to be shared between developers and consumers. Exact details on the ratio are yet to be determined.
As a Graduate Control Engineer from Liverpool University in the 1960s, I hope that the move from a six to eight hours minimum duration is feasible.
I wasn’t dealing with power systems, but with multi-vessel chemical plants.
These are my thoughts.
The biggest project, I was dealing with a few years later in the 1970s, was the modeling of all the the reservoirs and pipelines by the Water Resoures Board.
As the supply side of the water industry hasn’t had too many issues with the volume of water supplied, I feel that the main modelers must have done a reasonable job.
Six To Eight Hours Of Continuous Operation
The article says this about uprating from six to eight hours of continuous operations.
All the systems that have been proposed for cap-and-floor operation, seem to have some form of physical storage.
- Energy Dome appears to have tents of carbon dioxide.
- Energy Vault uses stacks of heavy weights.
- Form Energy has tanks of rust.
- Gravitricity has huge weights in disued mine shafts.
- Highview Power has large tanks of liquid air.
- Pumped storage hydro has two lakes, that hold water.
- Rheenergise has two large tanks, of a water-based slurry.
So to go from six to eight hours will hopefully just need some more storage.
Highview Power appears to use similar gas tanks to those used to store natural gas or hydrogen.
This image clipped from Highview’s web site, shows large tanks for liquified gas storage.
With tanks like these, which can hold GW-equivalents of liquid air, Highview could be building batteries with storage to rival the smaller pumped storage hydroelectric power stations. They are already talking of 200 MW/2.5 GWh systems, which would have a 12.5 hour continuous rating and would probably need two to three tanks.
Coire Glas Pumped Storage
I’ll use Coire Glas pumped storage hydro electric power station as an example.
As currently planned SSE’s Cioire Glas pumped storage hydroelectric power station is 1.5 GW/30 GWh, so it has a a 20 hour continuous rating.
In The UK’s Pumped Storage Hydroelectricity, I gave a rough estimate of the pumped storage hydroelectricity systems in operation or planed as nearly 11 GW/224GWh.
The Soft Cap
The article says this about a soft cap.
Another interesting detail pointed out by several commentators is that the cap is a ‘soft’ one, meaning it will allow extra revenue to be shared between developers and consumers. Exact details on the ratio are yet to be determined.
I seem to remember that when I was modeling a larger multi-vessel chemical plant at ICI, I was using sharing between vessels, to get the system to operate on a PACE-231R analog computer.
So I suspect a soft cap is possible.
UK To Fund Hydro Energy Storage Projects
The title of this post, is the same as that of this article on The Times.
This is the sub-heading.
New infrastructure aims to help balance the electricity system after the rapid growth in renewables
These three paragraphs infrastructure the article.
Projects that use water to store and release energy are to be given government support, in an attempt to help manage the volatility in supply and demand as more green power enters the grid.
From next year, pumped hydro storage projects will be able to apply for government subsidies, which will be provided via a “cap and floor” mechanism. These would guarantee revenues if prices drop below a certain floor but prevent providers from charging above a ceiling when power prices are high.
Like other government support schemes, any cost will be levied on energy bills, while consumers will be paid back any money generated above the cap. It is yet to be decided precisely how the cap and floor will be set.
I feel it is reasonable to expect the system to be a success, as a similar system is used for interconnectors and this article on Offshore Energy is entitled Over $86 million To Be Split Between UK and Belgium Consumers As 1 GW Subsea Interconnector’s ‘Remarkable’ Revenues Exceed Ofgem’s Cap.
It looks like Ofgem played this right for interconnectors and the Nemo Link is making a substantial payment.
It will be interesting to see what happens when “cap and floor” contracts are assigned.
This move by Ofgem will probably have effects in two areas.
- SSE, Statera and Statkraft, who are typically developing systems at the high end with a size of about 1.5 GW/25 GWh could find money is easier to come by.
- At the lower end, companies like Highview Power, who have systems of 50 MW/300 MWh and 200 MW/2.5 GWh under development, will also benefit.
My Control Engineering thoughts are leaning towards the 200 MW/2.5 GWh systems being the popular ones. Especially as they would appear to be close to the right size to support a 1 GW wind farm for two hours.
A Highview Power Two-Hour Liquid Air Battery could fit nearly with a fleet of Two-Hour BESS.
It should be noted that CAF use a little-and-large approach to theit battery-electric trams in the West Midlands.
A large lithium-ion battery is the main storage device.
A supercapacitor handles the high-frequency response and keeps the power steady.
Pairing a Highview Power Two-Hour Liquid Air Battery and a Two-Hour BESS could achieve the same performance and possibly result in some cost savings.
Cap And Floor Mechanism The ‘Standout Solution’ For Long Duration Storage, KPMG Finds
The title of this post, is the same as that of this article on Current News.
These are the first two paragraphs.
A cap and floor regime would be the most beneficial solution for supporting long duration energy storage, a KPMG report has found.
Commissioned by Drax, the report detailed how there is currently no appropriate investment mechanism for long duration storage. Examining four investment mechanisms – the Contracts for Difference (CfD) scheme, Regulated Asset Value (RAV) model, cap and floor regime and a reformed Capacity Market – it identified cap and floor as the best solution.
Cap and floor has been used successfully in the financing of interconnectors, so perhaps to apply it to long duration energy storage, will lead to greater use of such storage.
The Anonymous Widower 