Homes and businesses ‘pay extra €35m’ for electricity due to battery storage market issues, lobby group says

Homes and businesses paid €35 million extra on their electricity bills last winter because battery storage operators could not get full access to the market, according to their industry lobby group.

Battery storage is used to guarantee the electricity network’s stability by balancing rapid shifts in supply with demand, but cannot trade or provide power as regulators will not allow it take full part in the market until next year at the earliest.

Industry group Energy Storage Ireland, which represents businesses using this technology, says a report it commissioned shows that batteries could have saved electricity customers a total of €35 million last winter, had its members had full market access.

The analysis, by consultants Baringa, calculates that the 670 mega watts (MW) storage available to the system could have saved customers in the Republic €26 million and those in the North €9 million over the six months from October to March.

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Batteries can store electricity for several hours. This allows them take in power at offpeak times, when prices are low, and sell it later when demand is high, replacing some of the more expensive gas or coal-fired generators that are called on during those periods.

However, according to Bobby Smith, head of Energy Storage Ireland, unlike gas plants or renewable generators, the Commission for the Regulation of Utilities (CRU) does not treat batteries as market participants, so restricts them from selling the electricity they store.

“This means more reliance on fossil fuels and higher bills for electricity consumers during times of peak demand,” he said on Wednesday.

“With no additional investment or structural changes needed for this, change can be actioned immediately to unlock this potential cost saving for households and businesses.”

Regulators could give batteries access to the market next year, possibly in time for winter 2024-25, but Mr Smith said Energy Storage Ireland had proposed a solution to the CRU that would see all members step in this coming winter.

The CRU said it was aware of Energy Storage Ireland’s proposals and analysis, which it had examined in the contest of the current rules governing the single electricity market. “Any decisions would require consideration and a decision by the single electricity market committee,” the regulator said.

Battery storage is expected to play a bigger role in electricity supply as the Irish system takes on more wind and solar power. ESB recently opened a battery storage facility at Aghada, Co Cork, which the State company built jointly with specialist developer, Fluence, owned by multinationals Siemens and AES Corporation.