Electricity generation from wind and solar PV is intermittent, so as the % of renewables increases, the UK will have a need for grid scale electricity storage, right? After all, storage already exists in the form of the 1.7GW Dinorwig pumped-storage hydroelectric plant in Wales and its sister facility.
On the flip side, Germany with approximately 30% renewable electricity (versus approximately 15% in the UK) has recently mothballed its storage capacity due to an insufficient price difference between peak and overnight electricity prices.
The reasons include increasing interconnection between electricity grids and flexible gas combined cycle plants that can go from idle to full power in around 30 minutes. Smaller gas reciprocating engines can be at full power in under 10 minutes. In addition, demand shifting (programming electrical loads to avoid periods of peak demand) will have an increasing impact.
So is there or is there not a need for electricity storage?
It depends on the cost. Flexible gas plant is currently providing peak loads which could be provided by energy storage, but only if the storage technology is cheaper. Calculating the levelised cost of storage (LCOS) is not straightforward and requires various assumptions which are hard to estimate such as how many hours the plant will be used for and the price of input electricity.
Short Term Operating Reserve (STOR) contracts give a high export electricity price but demand is only for approximately 30 hours per year, favouring low capex options such as diesel gensets. The cost of gas generation ranges between (at the low end) the operating cost of existing capacity and (at the high end) the levelised cost of new gas plants, which should take account of potentially higher gas prices and a cost for carbon emissions.
While storage may soon be cheaper than gas (and certainly lower carbon), there is currently no commercial framework to underpin a large investment in capacity. This will require a new policy framework covering storage as part of the UK Capacity Market.
In the short term, the early adopters of storage will be islands and remote communities which currently use imported diesel for electricity generation (costs ~$0.40/kWh) and could replace it with wind and/or solar PV plus storage. But large-scale gird storage in developed markets will be much slower to emerge.