Mr. Bobby Smith:

Energy Storage Ireland, ESI, is a representative body for the energy storage industry in Ireland and Northern Ireland. We represent over 40 members from across the energy storage supply chain and all energy storage technologies that will play a vital role in decarbonising Ireland’s energy sector.

The current price volatility in the energy market and the Ukraine crisis mean we must fundamentally rethink the structure of our energy system and our key policy goals - security of supply, affordability and sustainability. Energy storage can contribute to all three of these goals by reducing our CO₂emissions, ensuring a secure and sustainable supply of electricity to Irish homes and businesses while reducing the cost of electricity for consumers. Energy storage, therefore, must become a vital tool in Ireland’s response to the current energy crisis and our longer-term decarbonisation targets.

As has been mentioned, the Irish market has seen a very successful deployment of short duration lithium-ion battery storage, with over 350 MW of battery storage currently operational and providing important system stability services via the delivery by EirGrid of a secure, sustainable electricity system, DS3, framework. This number is expected to grow to approximately 600 MW by 2023. These batteries provide fast-acting reserves that ensure electricity supply and demand are constantly balanced. Analysis carried out by Baringa energy consultants on behalf of ESI in 2019 estimates that the provision of system services from battery storage, demand-side response and other low carbon technologies instead of traditional fossil fuel generators can reduce power sector emissions by nearly 2 million tonnes of CO₂per year by 2030.

However, the market for short duration batteries is close to saturation and so the focus must shift to energy storage that can store and provide energy for multiple hours at a time. Energy storage in this space will play an important role in contributing to capacity adequacy by ensuring there is enough available electricity to meet existing and future demand. Multi-hour storage will also be more active in trading energy, thereby helping to smooth price volatility, and supplying power at times of high demand to displace fossil fuel peaking generation. There are many technologies that will play a role here. Lithium-ion batteries are proven at the scale and projects of up to eight hours duration are already in development in markets such as California.Other established technologies such as pumped hydro and compressed air energy storage could also feature, while new emerging long duration battery technologies are likely to become more viable in the coming years.

In Ireland, while small volumes of lithium-ion batteries of up to four hours duration have secured contracts to construct in recent capacity auctions, more will be needed. EirGrid has assumed in its Shaping our Electricity Future roadmap that approximately 1.5 GW of two to six hours storage will be operational in 2030.This should be considered a minimum target and we believe this target could even be doubled by 2030. However, there is a high degree of risk and revenue uncertainty for multi-hour projects at present which require further consideration and a co-ordinated policy effort to provide the correct investment signals. One of the key benefits of proven energy storage technologies such as lithium-ion batteries is that they can be deployed quickly relative to new fossil fuel generators. Our analysis shows that there are over 2.5 GW of storage projects in the development pipeline, with the majority already through the planning system and awaiting a grid connection and a stable revenue stream under which to construct.

Finally, in the long term, full decarbonisation of the electricity sector will require the deployment of long duration multi-day and multi-week energy storage, such as green hydrogen, to cover extended periods of low renewable output and provide generation capability at times of need. Recent analysis conducted by Baringa on behalf of ESI, and shared with the committee members, shows the benefits that energy storage of different volumes and durations can deliver to the Irish system and consumers by 2030. Energy storage of all durations can help to reduce CO₂emissions with durations of between 24 hours and 100 hours providing the most benefit by reducing electricity system CO₂emissions by approximately 50%. This would be a significant achievement considering emissions reductions post 2030 will be the most difficult to deliver.

In addition, Baringa’s analysis shows that strategic deployment of long duration energy storage in transmission constrained regions of the network can reduce renewable constraints by 90% in a case study of County Donegal, one of the most congested areas of the grid. This would save approximately 250,000 tonnes of CO₂per year just from being able to utilise this renewable generation in the Donegal region alone. Replicating this in other constrained regions would deliver even greater emissions reductions. It is therefore essential that the overall policy framework supports investment in a broad portfolio of technologies and enables the deployment of a comprehensive set of energy storage capabilities that can deliver the benefits we have outlined.

The Climate Action Plan 2021 sets out a number of actions relevant to energy storage. These are all welcome, but it will be important to ensure that the timelines for completion of these activities are met and that there is co-ordinated engagement with industry to achieve these targets. We urge that an industry liaison group be set up with key policymakers such as the Department of the Environment, Climate and Communications, the Commission for Regulation of Utilities, CRU, and EirGrid to ensure these actions are completed. Some of the immediate work streams that are needed are: resolution from the regulatory authorities on the future development of DS3 system services post 2024; fixes to existing EirGrid market systems and operational policies to allow the full integration of energy storage; a connection policy that allows a feasible and timely route to connect to the grid for the large number of storage projects that are through the planning system; and an investigation of the market signals that will drive investment in multi-hour and multi-day storage, as it is unlikely that the existing market will provide the long-term revenue certainty that these projects will require.

In conclusion, we ask the committee to consider energy storage as a proven, readily available and fast-to-deploy solution capable of delivering significant CO₂emissions savings. In order to unlock these savings we ask for the actions I have outlined to be progressed with a sense of urgency by the Department of the Environment, Climate and Communications, CRU and EirGrid. The prize is huge, and it will be worthy of the effort.