14 September 2017

Ofgem have made a decision that three solar farms operated by developer Anesco and accredited under the Renewables Obligation (RO) scheme, will be able to claim RO Certificates (ROCs) for all renewable electricity generated, even if it is used to charge an energy storage system. :

“We have determined that the arrangements in place at several commercial scale solar installations allow for ROCs to be claimed on all the renewable electricity generated, including any that is used to charge the storage devices.”

Luke Hargreaves, Head of Renewables, Ofgem, 13th September 2017

Ofgem has recognised the significant role storage is set to play in the ‘smart and flexible’ energy system that they outlined with BEIS, in their joint strategy document launched earlier this year.

It is therefore encouraging to see a positive regulatory position for storage, in a period where we have seen policy decisions that will have notably adverse effects on storage investment – such as the consultation around de-rating of storage in the Capacity Market.

Many solar farm asset owners may see this as the green light to pursue the storage business models they have been developing. Regen has seen the industry react very positively to this announcement so far, with organisations describing it as a “…landmark decision”, “…a game changer for the UK’s energy storage market[1]” and “a breakthrough… marking a new era for battery storage[2]”.

Whilst there was no updated or revised RO guidance documentation included alongside their blog announcement, Ofgem have indicated that specific guidance for how co-located storage will feature in the RO and FIT programmes, will follow later in the year. Indications were given that stakeholder engagement will be part of this process. Given that the RO is closed to any new generating capacity as of March this year, this “bespoke guidance” may be more of a pathway to describe how the co-location of storage with RO accredited solar can work in practice.

An interesting point here is that Ofgem have singled out the co-location of storage with solar PV, but give no direct mention to the other numerous eligible technologies under the RO. Many of these technologies have the technical and commercial potential to co-locate with storage. Therefore, can it be assumed that ROCs can similarly be claimed for RO accredited wind, hydro, sewage gas or anaerobic digestion sites (to name a few) that are looking to incorporate storage on site, to maximise their operational benefits? A question that is not directly answered here.

Regen are currently writing a follow-up publication to our 2016 energy storage paper, which is exploring the next wave of energy storage projects co-locating with generation and demand, this paper is set to be published and available at a launch event on 1st November in London.

Regen has also been working closely with WPD on modelling and consulting on the growth and operation of energy storage assets on their network. The results of this consultation can be seen in the report and webinar that were published at the end of August.

Regen will be keeping a close eye on any further information emanating from the regulator, as solar asset owners react to this decision and look to push ahead with installing storage on their RO accredited solar farms.

Author: Ray Arrell - Senior project manager

Contact: [email protected]

Photo Credit: BSR and WPD

[1] See Anesco article for further information (accessed September 2017)- http://anesco.co.uk/landmark-ofgem-decision-fuels-uks-energy-storage-market/

[2] See Climate Action Programme article for further information (accessed September 2017) - http://www.climateactionprogramme.org/news/uk-energy-regulator-made-a-breakthrough-decision-marking-a-new-era-for-batt