Time of use tariffs bring domestic storage one step closer to economic viability

Posted by on Jan 4, 2017 in Local Energy Markets
Time of use tariffs bring domestic storage one step closer to economic viability

Thus far, domestic energy storage has been a cool thing with which to impress your mates, and lately it’s been about the cheapest way to get anything with a Tesla logo on it. But it’s been a long way from being the sort of economic no-brainer that’ll secure an enduring mass market.

This week brings news that nudges the storage proposition a bit nearer to critical mass. The Greengage has reported that Green Energy UK has released UK’s first domestic time-of-use electricity tariff. A time-of-use tariff is in itself not such an exciting thing. It relies on human demand response to price, and nobody has yet been able to demonstrate substantial and enduring changes to mass market consumer behaviour in response to electricity pricing.

But by introducing a little information technology, domestic electricity storage can exploit time-of-day electricity pricing to optimize energy costs for the consumer’s benefit: storing electricity when it’s cheap and releasing it when it’s expensive. It’s not a trivial job, because you have to consider, as well as the prices, the losses from storing and releasing energy, the losses from self-discharge, and the cost of storage cycles (which in turn depends on the depth of cycle).

Micro Storage Manager Device

But it can be done! Our Micro Storage Manager device integrates domestic and small business storage with time-varying tariffs, dispatch services and other non-traditional trading models. It understands the capabilities and state of the energy store, and it calculates, in real time, a regimen of storing and releasing energy that’s optimized for the consumer’s benefit.

Here’s how our Micro Storage Manager engages, over a weekday, with Green Energy UK’s new tariff, with a store rated at 5 kWh and 1 kW charging/discharging:

MSM energy consumption optimisation graph

The store fills up in the dead of night when the price is low, and releases energy throughout the evening price peak, and some more at the start of the morning’s raised price. The consumer benefits at a rate of about 86p per day (47p on weekend days), or a total of £274 per annum. In itself, that’s not enough to justify the cost of the storage, but it’s a significant increment to the present business case.

Domestic storage is only going to become economically robust if it can exploit every possible benefit: self-consumption, dispatch services, energy security and price arbitrage. Devices like Swanbarton’s Micro Storage Manager will be the key to that sort of multi-modal operation. There’s plenty of scope for improving the domestic storage proposition, and we’ll be part of that.

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