Highview expands to meet growing LAES markets in UK and US

Highview expands to meet growing LAES markets in UK and US

Highview expands to meet growing LAES markets in UK and US Energy Storage Journal

 

Colin Roy, Highview’s new chairman

Highview, the UK firm that manufactures liquid air energy storage systems, appointed corporate financier and long-time shareholder Colin Roy as its chairman in the same week it confirmed it was to open its first US-based offices, the company announced on January 11.

The moves come as the London-based company looks to deploy its technology for the first time in North America following a successful pilot project in the UK.

The company is to test the technology’s grid frequency service capabilities at the world’s first hybrid flywheel, supercapacitor and a 5MW/15MWh LAES system in the UK. The plant is due to be in full operation by this summer.

Last October Roy was named executive chairman, taking over from Timothy Barker, who had been chairman for 10 years.

Roy told ESJB: “I have experience in growing a variety of companies from being very small to a market leading position and that really is a skill that all new technology companies need at some stage.”

“The sheer numbers of enquiries in the US makes us think the market is growing there, and importantly it has the potential to be by far the biggest market of LAES in the world.

“We’ve 20 concrete project discussions underway in the US, but in terms of the way we look at the overall market in the future, long duration storage that offers more than four hours capacity, will be the largest part of the market by around 60%.

“LAES can capture about half of it, and will be the technology most easily applied because of its simplicity, its low cost per MWh, and the fact it can be deployed anywhere. We are at the industrial scale, but ultimately its size of footprint and ease of location puts it alongside lithium ion.”

He added: “I think the UK is definitely going to be an early leader in LAES, that’s simply from discussions and engagements I’ve had with potential customers. They have the ability to sign up fastest and also have the great fortune of the UK government being very supportive of us with a series of grant assistance, and they are looking to do further ones.”

Long-duration storage could be a game changer within the industry, especially in the UK which is set to impose more stringent de-rating factors in capacity market auctions for short duration storage, that will potentially place a premium on long duration solutions.

Highview’s CEO Gareth Brett believes that markets in the US will soon follow suit.

The de-rating factor in the UK, as announced by the Department for Business, Energy, and Industrial Strategy last year, was seen by many in the market as penalizing storage.

Energy storage facilities being delivered in from 2018 that offer only 30 minutes or less will be de-rated to 21.3% of the nominal fee, falling to 17.9% for plants being delivered from 2021.

Roy said: “De-rating is an esoteric concept. The UK has been a leader in racing to get storage seen as a means of supplying capacity to the electricity market. However, there’s a need for capacity assurance that a company can provide power for a certain amount of hours at a certain MW output. And there’s an annual fee for that.

“All big power stations have previously provided this service, but because some are now being decommissioned the industry has to look at other means of supplying capacity and open that market up to energy storage companies.

“There’s a large number of lithium ion battery plants applying for and winning contracts, but the majority are 30 minutes of capacity. But 30 minutes just doesn’t cut it if the whole system goes down, there’s not enough power to re-start it.

“Previously all storage was seen as equal, so if you have a plant offering four hours capacity or more it got the same amount of money for service as one that offered 30 minutes. So with de-rating if you only have half-hour or capacity, which is the majority of plants, you only get a percentage of the total fee available.”