There are quick bucks to be made from battery storage. But in three or four years, many assets will be in the bin, reckons redT chief Scott McGregor. He claims sustainable energy storage that can handle multiple functions for decades without degrading is now viable. Brendan Coyne reports
Predictions for battery storage penetration vary wildly. UK Power Networks recently reported it had received 12GW of connections requests in little over a year, much of it for batteries, much of it “highly speculative”. Western Power Distribution has 1GW of storage connections agreements on its network, with a further 1GW offered.
National Grid meanwhile, sees up to 18GW of all forms of electrical storage on the system by the 2040. Government predicts around 4GW of batteries by 2033.
But Scott McGregor, CEO of energy storage firm redT, believes market sizing predictions and the recent rush to secure frequency response contracts obscure fundamental truths. He says battery storage as opposed to energy storage is unsustainable – and many of today’s frequency response “arbitrage exploitation” opportunities may not exist in three years’ time.
Neither, he says, will some of the assets.
“The returns [for frequency response] are currently good. That’s nice, but they are batteries which will degrade and have to be thrown away – and that revenue opportunity will also run away pretty quickly.”
McGregor points to California, which he suggests is suffering a lithium hangover. Battery owners that piled into frequency response now spy other revenue streams. But, says McGregor, “they can’t access them because the battery is only warrantied to provide one service – and if they do more it will burn out”.
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