Should you be tapping into battery storage opportunities behind the meter?
Battery storage located ‘behind the meter’, as opposed to having a dedicated grid connection, is an emerging market which holds huge potential for energy cost savings and income opportunities for some commercial businesses, industrial businesses, farms and estates.
What is behind the meter?
As the name suggests, a behind-the-meter energy system is installed on the customer side of the meter (electrically, downstream of the boundary between the Network Operator’s assets and the site). The opposite is a standalone system which, by definition, has a dedicated grid connection and can only access ‘front-of-meter’ revenues.
Behind-the-meter technology isn’t always energy storage. Gensets or renewables, for example, can be readily deployed either side of the meter point. Indeed, if a site already has intermittent renewables generation, such as solar, hydro or wind, then the business case for locating battery storage behind the meter is normally stronger.
Who is behind-the-meter battery storage for?
Behind-the-meter battery storage is mainly appropriate for larger commercial and industrial business with high electrical demand, and who are looking to reduce energy costs and/or generate additional income from within their energy system.
What are the benefits of behind-the-meter battery storage?
- Reduce energy bills – behind-the-meter battery storage allows half-hourly metered businesses to buy and store power when electricity is at its cheapest and to use it at peak times when electricity prices are at their most expensive. (This is referred to as energy price arbitrage). More importantly, storage can be used to shift a site’s electrical demand away from costly red and amber ‘time-of-use’ tariff bands and can flatten the demand profile of a site. Such ‘peak-shaving’ is used to reduce standing charges and (from April 2018) avoid costly penalties for exceeding contracted maximum import capacity.
- Generate additional revenues – behind-the-meter schemes can also access National Grid’s ancillary services markets. These services are used by National Grid to balance the UK’s electricity supply and demand in real-time (on a second-by-second basis), and are procured via an array of auctions. There are various income streams available to storage schemes from National Grid (directly or indirectly), including frequency response, the Capacity Market, triad avoidance and reserve revenues. With the help of a reputable aggregator, even smaller businesses can stack these revenues to maximum benefit and participate in Demand Side Response mechanisms that would otherwise be out of reach.
- Compliment and benefit from existing renewables schemes – if located behind the same meter as intermittent wind or solar generation, for example, battery storage can time-shift the energy generated by the renewables. This shift can either be away from a time at which energy might otherwise be exported from the site (peak generation or reduced demand) or to a time of use when costs are higher – or both.
- Provide stand-by or emergency power – businesses can insulate their operations from power outages with behind-the-meter battery storage. Combining this with revenue and savings benefits will bring better value from a storage investment – and will be a cleaner and greener option than a backup generator.
- Compliment export limitation – sites with limited export capacity can apply to the Network Operator to deploy approved export limitation technology. In these circumstances a storage system can be used, in conjunction with the export limitation device, to absorb excess energy when a generator would otherwise be curtailed or constrained off. This option can rarely (if ever) be justified financially without stacking additional revenues.
- Allow business growth where grid capacity is limited – as some businesses grow and develop, they may require access to more power on site. They may wish to increase core operations, or start charging electric vehicles on site, for example. However, the costs of increasing import capacity can include investing in reinforcing the Network Operator’s network and this can cost millions. Where such costs are an obstacle to future business growth, deploying generation or storage behind the meter can help a business meet its needs without recourse to expensive grid development. Indeed, generation or storage assets can be sold or deployed elsewhere if peak power demand subsequently reduces and the investment might have represented a stranded asset.
But, take care
However, beware the pitfalls of behind-the-meter storage investments. Not all sites and not all businesses have a genuine business case for a battery storage scheme behind the meter, and misselling of storage technology by installers is a growing problem.
At Roadnight Taylor we can rapidly assess whether you currently have a genuinely viable opportunity to invest in storage with our Stop/Go feasibility study. We can ensure that you receive competing quotes for the right technological solution from the best-performing installers and that your scheme is installed and maintained to the highest standards. We’ll even find you the right aggregator to deliver you the very highest revenues.