The Office of Gas and Electricity Markets (Ofgem) announced on Wednesday that Anesco, a UK-based renewable energy company, will be the first commercial solar farm to retain their Renewables Obligation (RO) subsidy status even when the electricity generated is used to charge storage batteries.
Anesco operates three solar farms in the UK where battery storage arrays were already installed, storing solar energy generated during the day ready for dispatch during evening periods of peak demand helping stabilising the grid.
The farms are located in Northampton, Chesterfield and Stratfford-upon-Avon.
Each 5MW site is accompanied with a 1.1MWh battery.
Anesco said that the decision represents a landmark moment for further deployment of energy storage technologies, since the move confirms that solar farms operators will receive subsidies for both energy sent to the grid, as well as energy used to charge batteries.
Steve Shine, Executive Chairman of Anesco, said: "This decision is a game changer for the UK's energy storage market”.
He added: "Ofgem has firmly cemented energy storage as being a vital part of the solution to keeping the country's lights on'”.
The Renewables Obligation subsidy scheme is one of the main governmental policies to encourage renewable energy technologies.
Eligible generators are accredited Renewables Obligation Certificates (ROCs) for the electricity that they generate.
They then sell the ROCs to licensed electricity suppliers who are obligated to show compliance with the scheme.
Luke Hargreaves, Ofgem’s Head of Renewables and Renewable Electricity explained that the regulator has realised that “the arrangements that are in place at several commercial scale installations allow for ROCs to be claimed on all the renewable electricity generated, including any that is used to charge the storage devices”.
He added: “Battery storage can assist with system balancing and save consumers money by matching supply and demand”.
“It has the potential to play an important role as Britain makes the transition to a low carbon, smarter and more flexible energy system”.
The decision is part of Ofgem’s plans to encourage the roll out of battery storage, as announced in the Smart Systems and Flexibility Plan a few months ago.
In the plan the UK government mentioned that it intended to define storage as a distinct form of generation in licensing and legislation, and enable storage facilities to stop paying certain levies charged to end users.
Ofgem, in collaboration with the UK Government, is expected to publish a bespoke guidance on key storage considerations under the Renewable Obligation and Feed-in Tariff schemes later in 2017.
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