An international review of the implications of regulatory and electricity market structures on the emergence of grid scale electricity storage

Oghenetejiri Harold Anuta*, Phil Taylor, Darren Jones, Tony McEntee, Neal Wade

*Corresponding author for this work

Research output: Contribution to journalReview article (Academic Journal)peer-review

58 Citations (Scopus)

Abstract

Energy storage systems (ESS) have the potential to make a significant contribution to planning and operation practises in power systems. While ESS can be used to provide multiple benefits in the power sector, widespread use has been restricted by high technology costs, lack of deployment experience, and the barriers and uncertainties caused by the present electricity market and regulatory structures that were designed for conventional electricity systems. This paper reviews countries with high renewable targets and with significant current or planned ESS deployments to ascertain the common problems affecting the use of ESS on the grid, and to establish where changes have been made or proposed to the electricity market and regulatory frameworks. Three major problems were identified as the undetermined asset class for ESS and unbundled electricity system limiting stakeholders from determining and realising multiple ESS benefits; low electricity market liquidity and changing market conditions; and a lack of common standards and procedures for evaluating, connecting, operating and maintaining ESS. Based on the established barriers, recommendations to update or create policies, regulation and market arrangements to increase the viability and wider use of grid level ESS are discussed. The three key regulatory and policy recommendations were identified as an alignment of renewable policies to that of ESS; creating a separate asset class for ESS and associated rules for regulated and competitive operations; and standardising assessment frameworks, connection and operational procedures for the use of ESS. Finally, three main electricity market recommendations include updating rules to support simultaneous ESS operation across wholesale, ancillary services and capacity markets; updating market rules to allow compensation for flexible and highly accurate responsive demand and generation technologies, such as ESS; and updating market ancillary services energy requirements.

Original languageEnglish
Pages (from-to)489-508
Number of pages20
JournalRenewable and Sustainable Energy Reviews
Volume38
DOIs
Publication statusPublished - Oct 2014

Bibliographical note

Funding Information:
The authors are thankful to Electricity North West Limited , Scottish Power Energy Networks and Ofgem in the UK for funding research under the Innovation Funding Incentive as part their effort to develop innovative cost-effective solutions for future distribution networks. The authors would also like to acknowledge the work of the numerous sources cited which informed this review.

Copyright:
Copyright 2020 Elsevier B.V., All rights reserved.

Keywords

  • Electricity market
  • Energy storage systems
  • Policy
  • Regulation
  • Renewable energy
  • Transmission and distribution networks
  • Unbundled electricity system

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