Rethinking battery storage
Grid-scale batteries are being deployed at pace across global electricity systems, driven by falling costs and rising renewable generation. However, Keith Bell of the University of Strathclyde cautions that their real-world behaviour may not always align with system needs.
Keith Bell says that battery storage is expanding rapidly, and “for good reason”. “There is lots of evidence from around the world that we are charging ahead with deployment,” he says, pointing to both cost reductions and increasing installed capacity.
He highlights the dramatic fall in lithium-ion battery costs, coupled with a “dramatic increase in deployment”. In Britain, this growth has already reached a notable milestone. “The megawatt capacity of grid-scale batteries now exceeds our capacity for pumped hydro storage,” he explains, although he also says this may “not yet be the case in terms of energy storage capacity”.
Balancing renewables
A key driver of battery deployment is the need to balance variable renewable generation. Bell highlights the example of California, where batteries are closely aligned with solar generation. “You can see batteries charging when it is sunny during the day and discharging in the evening,” he says.
“This kind of flexibility to help with balancing becomes increasingly important as renewable penetration grows,” he explains.
To illustrate the challenge, Bell uses the concept of residual demand, which is the difference between electricity demand and renewable generation. In a future system with high levels of wind and solar, this can become highly variable.
“You can see that, actually, that goes negative because there are periods where renewable generation exceeds demand potentially, by 2030, for up to roughly a quarter of the year.”
Bell explains: “This creates a dual challenge. There is a deficit to be made up and there is a surplus, so it looks like a really good case for energy storage.”
“While batteries will play an important role in future energy systems, they are not a standalone solution.”
Limits of storage
However, Bell cautions against overly simplistic interpretations of this opportunity. “One hour tends to follow another hour; we cannot just treat them in isolation,” he says.
“On some days, it is not very windy; on others, it is very windy. These conditions can last for multiple days, which has important implications for how storage technologies are used. So, it is about balancing out the variability of renewables,” Bell says.
The University of Strathclyde professor adds that storage is only one part of the solution. “Different technologies offer different characteristics. Wind generation, for example, is highly responsive in real time.
“If it is windy, you can reduce the power output very quickly and increase it again very quickly, but it is not controllable in advance. We can forecast but we cannot predetermine it. No single technology has a perfect combination of these characteristics,” he says.
Revenue models
The way batteries earn revenue varies significantly across markets. In California, Bell explains how revenues are split between capacity value and energy arbitrage by “moving energy from one moment in time to another”. In contrast, the British market initially relied heavily on ancillary services such as frequency response.
This has proven highly effective but also created new challenges. “So much so that the revenues for the battery owners have collapsed,” he says, as increased competition reduced returns.
As a result, battery operators are increasingly turning to energy trading. “They have had to be looking much more at those energy services,” he explains.
System operation challenges
Bell also points to operational challenges within electricity systems. In Britain, there has been controversy surrounding how the system operator balances supply and demand. “They have not really been taking the optimal actions,” he says, referring to instances where cheaper options were bypassed, so-called ‘skip rates’.
“Batteries, in many cases, are offering energy at a better price than combined cycle gas turbines, so this raises a lot of questions about dispatch decisions.”
Unexpected behaviour
A PhD student at Strathclyde, Susan Brush, modelled how batteries are likely to behave in the British market. The results challenged the assumption that they would charge when it is windy and discharge when it is not. “While batteries did charge during periods of high wind, there is still a lot of discharging when it is windy,” Bell explains.
The reason lies in how batteries generate revenue. “Rather than responding primarily to wind patterns, they are driven by price signals. The battery is earning its money by cycling as often as possible,” he says.
This leads to behaviour aligned with daily price fluctuations rather than multi-day weather patterns. “They will just charge and discharge, maybe two cycles a day,” he explains.
As a result, battery operation may not always support system needs. In some cases, it can “exacerbate network congestion, rather than relieve it”.
Duration challenge
Bell also highlights how duration is a significant limitation of current battery technology. While batteries are effective for short-term balancing, their typical capacity of between two hours and four hours is much shorter than the duration of some system imbalances.
“Curtailment events, where renewable generation must be reduced, can last significantly longer. Very much longer than the energy capacity of batteries,” he states.
“This limits their ability to fully address variability in renewable generation, particularly during prolonged periods of high or low output.”
Concluding, Bell says batteries are “provide extremely useful services, particularly in areas such as frequency response, where their speed is a major advantage”.
However, he cautions against overestimating their role. “These are less useful than expected as a complement to wind,” he concludes, due to mismatches in duration and operational behaviour.
“While batteries will play an important role in future energy systems, they are not a standalone solution. Instead, they must be integrated alongside other technologies and supported by market designs that better reflect system needs.”
