Learn From California on Energy Storage, UK Lawmakers Say

The U.K. government should learn from California and incentivize energy storage technology to help move away from dirty fuels, a cross-party panel of lawmakers said.

Ministers should reform the Capacity Market, a subsidy program designed to lower the risk of blackouts, to reward both energy-storage projects and power users who lower consumption at times of high demand, Parliament’s Energy and Climate Change Committee said in a report published on Saturday. 

“There is an incredible opportunity for the U.K. to become a world leader in these disruptive technologies,” Chairman Angus MacNeil said. “Yet our current energy-security subsidies favor dirty diesel generation over smart new clean-tech solutions.”

Britain is trying to ensure it avoids power cuts as coal-fired power stations and aging atomic reactors close down. In March, the government said it would begin payments to power generators to guarantee electricity supply in the winter of 2017 to 2018, a year earlier than previously planned, in an attempt to encourage the building of new gas plants. 

Ministers should aim to spur projects that store excess power at times of low demand and feed it back into the grid when demand peaks, as well as those that encourage users to reduce their own demand, the committee said.

Get it Right

“We need to learn from California where strong public financial support and clear legislation have helped develop a storage industry and integrate storage infrastructure into the grid,” MacNeil said. “Getting demand-side response right will empower consumers, reduce bills, ease pressure on the grid, and lower carbon dioxide emissions.”

“We are fully committed to a low carbon energy future and the potential benefits that new technologies such as storage could bring to this,” the government’s Department for Business, Energy and Industrial Strategy said in an e-mailed statement. “However, for the capacity market to work effectively it relies on flexible technology that is ready to be deployed.”

The committee also concluded that there are only “limited” short-term effects on electricity and gas supply of the U.K.’s decision to withdraw from the European Union. It urged ministers to publish an emissions-reduction plan because “the vote to leave has reduced already weak investor confidence in the energy sector.”

Remaining within the EU Emissions Trading Scheme could help Britain avoid extra costs of reducing global warming pollution, it said.

“Government should bear in mind the challenges associated with alternative options,” according to the report. “These include the potentially costly and complex option to establish a U.K. ETS linked to the EU System, and the politically difficult creation of a direct carbon tax.”

©2016 Bloomberg News

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