The Impact of Grid Storage on Balancing Costs and Carbon Emissions in Great Britain

TL;DR

This study examines how different grid storage technologies in Great Britain influence balancing costs and carbon emissions, revealing complex trade-offs and the need for market reforms to align financial and environmental goals.

Contribution

It provides a detailed analysis of various storage technologies' impacts on balancing costs and emissions, highlighting the potential for increased emissions despite renewable integration.

Findings

Optimal storage operation can increase carbon emissions in some cases.

Storage can enable higher renewable use but may also increase gas demand.

Current balancing services are insufficient for storage project viability.

Abstract

Grid energy storage can help to balance supply and demand, but its financial viability and operational carbon emissions impact is poorly understood because of the complexity of grid constraints and market outcomes. We analyse the impact of several technologies (Li-ion and flow batteries, pumped hydro, hydrogen) on Great Britain balancing mechanism, the main market for supply-demand balancing and congestion management. We find that, for many locations and technologies, financially optimal operation of storage for balancing can result in higher carbon emissions. For example, the extra emissions associated with a 1 MW 2-hour duration Li-ion battery in winter vary between +230 to -71 kgCO2/h. Although storage enable higher usage of renewables, it can also unlock additional demand leading to greater use of gas. In addition, balancing services alone are presently insufficient for financial viability of storage projects. This work highlights the need for market reform aligning financial incentives with environmental impacts.