Battery Energy Storage: Cut costs and protect against power cuts

The UK electricity network is coming under significant pressure as it transforms into a more flexible, low-carbon system fit for the 21st Century. With it comes the increased risk of power outages.

Image: A battery storage system could be the size of a standard car park space

Whilst some businesses have sought to protect themselves from power outages using diesel or gas generators, many accept the risk assuming the likelihood of such an event is too small to justify the cost of tying up capital (or lease costs) in a back-up system. However, the risk is growing.

A battery storage system can mitigate that risk whilst providing energy bill savings.

Driven by the growth in electric vehicles, rechargeable lithium batteries have reduced in cost to offer a viable back-up power solution. Not only can they provide short-term back-up power, but they can add to a business’s bottom line through additional energy savings and revenue generation.


Historically, the system has been designed and built around large centralised power stations (coal, gas and nuclear) and a network of wires and switchgear, branching and tapering towards the towns and cities where the power is required. This system is too inflexible for the demands it now faces:

* Demand for electricity is growing. This trend will become more acute as the sale of new diesel/petrol vehicles will be banned from 2040 increasing sales of Electric Vehicles (EVs).

* Our current coal-fired power stations are due to retire by 2025.

* To fill the supply gap, an increasing proportion of generation is from renewable energy technologies such as wind and solar. Renewable energy is both variable in output and has the potential to push power backwards through a tapered system which is not designed for that purpose.

Consequently, this is making it increasingly challenging for the system operator, National Grid, to ensure the system remains stable and to “keep the lights on” – at an affordable price for the end user. There are two principal challenges:

* To ensure there is sufficient generation capacity on the system, at the right times, and in the right places to match consumption.

* To maintain the standard AC frequency of 50Hz. This frequency is a function of the spinning inertia of large steam turbines, but as the number of such large thermal generators on the system reduces then the lower system inertia means the frequency can drift and become unstable.

To tackle these challenges, the electricity network is gradually being transformed into a more flexible and smart system where supply and demand are matched intelligently.


Quite simply the risk is fluctuations in power quality or loss of power altogether. A recent report published by Centrica gives some surprising insights:

81% of businesses experienced at least one energy-related failure in the last 12 months. The average number of incidents being 12 (energy-related) failures in the last 12 months. As a result:

* 23% of businesses suffered equipment damage * 14% lost inventory * 18% of businesses said outages damaged their brand * 11% said that employees had been placed in dangerous or life-threatening situations because of power outages

What is most surprising is the estimated cost of a power outage ranges from 3% of annual turnover for an outage of only an hour, rising to 18% for outages lasting a day in some manufacturing businesses.


Battery energy storage systems act as a back-up power system, providing protection against power cuts. They can pick up a full site load in around 200 milliseconds, and can be sized to provide the number of hours back-up you require.


The big difference between using a battery system as a back-up supply instead of a diesel/gas generator is that batteries can also operate as an energy management tool to reduce energy costs and provide services to National Grid to help with the growing need for flexibility.

This brings a number of financial benefits:

Peak shaving – A direct saving to the energy bill by charging the battery storage system during hours of cheaper electricity (for example, the green or amber DUoS band) and then discharging during expensive electricity hours (the red DUoS band).

Peak Support – many commercial sites operate at or near the capacity of their incoming electricity supply which limits expansion or increases in production. Often the only way to increase that supply can be to pay for an expensive upgrade (even then the local network might be constrained). The battery storage system can provide extra peak power to supplement the incoming supply so mitigating the need (and cost) to upgrade it.

Frequency Response – the battery storage system can help control local grid frequency to minimise deviations from 50Hz. National Grid pays providers of this service (a 1MW BESS could earn upwards of £100,000 per annum).

Capacity Market – the battery storage system can export electricity on demand (Demand Side Response/DSR) to effectively provide generation capacity to help National Grid balance the system. Again, National Grid pays for this service which, based on the last auction, could be around £22.50/kW.


A simple desk-top exercise can give you a quick insight into the likely system cost and size, revenue generation and, the all important, return on investment (RoI) for your premise.

We would simply require:

  • A copy of a recent electricity bill

  • Half-hourly meter data for one year.

Contact Chris or Emma with this information and we will happily prepare a simple feasibility report for your premise.

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