Know How: The challenges of energy storage – batteries not included

by Gordon Brown

Gordon Brown

Gordon Brown of AMT-SYBEX explains why the commercial, financial and operational aspects of distributed energy storage are just as important as the technical aspects – and what you can do to escape some common pitfalls.

As the price of large-scale energy storage technology continues to fall and more battery vendors enter the market, it’s starting to look like an attractive option for a wide range of players in the UK energy sector.

However, although the technical challenges around managing large batteries have mostly been solved and the market for the hardware itself is reaching maturity, many of the companies we speak to still have concerns about the commercial, financial and operational aspects of building and managing energy storage. In particular, there are a lot of questions about how to store, manage and analyse data; about market interactions and about how to monitor key business metrics.
To make sound commercial decisions and manage financial risks, you need data about the energy network as a whole, about the energy markets, about the contracts you have with National Grid and those with other players throughout the energy sector. And last but not least you need information on the in-flight performance of the energy storage asset itself in relation to those contractual terms.

Taking an operational view, what’s needed is an end-to-end business management system that is capable of managing not just storage facilities, but all kinds of distributed energy resources. It’s important that such a system should take the unusual complexity of the UK energy market into account, and make it easy to communicate and collaborate with all of the different market participants who have an interest in responsive energy demand – whether they work in generation, transmission, distribution or retail.

Moreover, the management solution should support decision-making at all levels – not just decisions about the scheduling and optimisation of the battery itself, but also higher-level decisions about overall business performance and financial operations.

For example, your battery management software might tell you how much electricity was stored in the battery on a certain date and how much was discharged into the switchgear. But it won’t be able to tell you who was buying it, what the market pricing was at that time, or how much your customer should have or did pay you, or help you reconcile your invoices with measured data from the network. Are you getting paid properly? Can you forecast your revenues accurately? Are you getting the most out of your system? Those are the kinds of questions you need to be able to answer from a business perspective, if you’re going to make a success of your energy storage initiative.

For a holistic view, you need an independent management and analytics platform that can collect and correlate information from all your systems – and this is what we’re doing at AMT-SYBEX. Building on the success of our Affinity Networkflow Forecasting, Optimisation and Scheduling System (FOSS) for energy storage, we’re now creating a market-leading distributed energy resource management and optimisation platform which puts the technical aspects of energy storage management into context with the broader business objectives.

We’re uniquely positioned to deliver a solution that really makes sense in the UK market. First, our long experience of managing data flows between dozens of market participants means we understand the needs of each segment of the UK energy industry.

Second, our work in smart metering and meter data management means we’re well positioned to handle high-velocity data flows and integrate them with other financial and operational systems.

Finally, unlike most other vendors, we actually have first-hand experience of how large-scale energy storage technology can be managed successfully and profitably in the real world. We’ve been working with UK Power Networks on their Smarter Network Storage project since 2013 – a project that has served as a proof of concept for energy storage for the whole industry.

Energy storage is a great opportunity for the UK energy sector as a whole – as a new revenue stream for retailers and DNOs, as a smart way for generators to mitigate financial risk and grow their revenues, and as a cost-effective way to help National Grid maintain stability of the system as a whole. If you’re interested in seizing that opportunity, we’d be very happy to help.


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