This summer the government issued its new strategic plan entitled Upgrading our Energy System.
This came alongside major financial support for battery R&D and the remarkable – albeit long-term – target that by 2040 pretty much the only new vehicles available will be electric.
Hopes for the government’s vision of smarter energy infrastructure are high. It’s part of both the government’s industrial strategy (aiming to boost UK GDP and productivity) and the much-anticipated Clean Growth Plan (targeting significant carbon reductions).
As such, construction companies will benefit from finding synergies between the government’s new energy plan and the industry’s proposals for its own ‘sector deal’, which should be ready this autumn.
Despite the considerable hype, batteries still comprise only a fraction of UK energy storage (pumped hydro is a key component). However, the huge attraction of batteries is that you can site them pretty much anywhere, while some – such as lithium-ion – offer highly responsive and much-needed grid support features.
High-profile lithium-ion cells are still expensive, but as prices continue to fall we move along the pathway to nothing less than major disruption of the UK energy market.
Changing the system
When that point is reached, UK asset managers will have the viable option of storing cheap electrical energy rather than buying it at peak rates, and providing energy support services such as grid balancing and uninterrupted power replacement.
“New energy technology and lower prices will not deliver this future at scale without UK market and regulatory reform”
Alongside this, depending on the hour and the weather, renewables are already revolutionising how the UK buys its low-carbon primary energy. Together, renewables and battery storage could be the combination that underpins a future low-carbon economy.
Even so, the ECA and other trade bodies have pointed out that new energy technology and lower prices will not deliver this future at scale without market and regulatory reform.
Untying the knot
In principle, it’s good to see that the government’s new plan aims to remove barriers to deploying batteries, in addition to boosting their role with renewables and electric vehicles while providing vital grid services. It’s also worth noting that large-scale energy supply and demand management, enabled by increasing digitisation, would also mean fewer new power stations need to be built.
Upgrading our Energy System attempts to untie the existing knot of complex and often conflicting regulatory and market measures that are obstructing the future outlined above. It also aims to ensure safety, quality and even cyber-security are maintained as we embark on the transition.
Achieving this will be a major challenge. But in construction, asset management and beyond, success could open the door to an array of commercial opportunities.
Paul Reeve is director of business services at the Electrical Contractors Association