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Policy recommendations Progress has been made in decarbonising the power sector, but further policy development work is required to fully address the decarbonisation challenges in heating and cooling, and in particular to further renewable energy penetration in these end-use sectors. Key barriers to the uptake of TES across energy systems include (Figure 12): • The lack of technology readiness that applies to some TES technologies, and competing technologies with high TRLs (e.g. inexpensive fossil-generated heating). • The lack of knowledge and awareness of how TES can provide benefits to society, the public sector and industry. This has manifested itself in a disproportional focus of R&D efforts on electrical battery storage, when thermal storage is a critical source of flexibility to enable high shares of renewable energy. • Uncertainty in how the future energy system will develop, which leads to a reluctance to invest in long-term or large-scale projects. • Siloed thinking across different energy vectors (i.e. heat/cold and power) and different sectors, leading in some cases to conflicting policies and inefficient planning. Furthermore, there is generally a lack of policy for the decarbonisation of heat compared to the power sector. A range of technology push, market pull and enabling mechanisms can help policy makers and main actors in the sector effectively tackle these barriers and encourage the wider deployment of TES. Policy makers and other key stakeholders should consider the following actions: • Increase the focus on decarbonisation plans for industry and the provision of heat and cold. Develop them as part of an integrated energy policy to realise higher levels of system benefits. • Take a whole-systems approach to decarbonising energy systems, which is key to enabling a cost- effective energy transition. Consider all flexibility technologies across vectors to determine the most cost-effective pathway to a decarbonised energy system. • Invest more into the R&D of TES technologies, enough to match the unique potential that they have to help decarbonise the heat, power and cooling sectors. Fund demonstrations to help build market awareness, increase consumer confidence and, of course, progress technology readiness levels. • Looking at policy makers’ broader energy policy, consider removing fossil-fuel subsidies and introducing a price on carbon, which would significantly improve the competitiveness of low- carbon heating systems. • Create market mechanisms such as time-of-use tariffs to incentivise demand-side flexibility and help reduce consumer bills, as well as increase the utilisation of renewables. Build a market for ancillary services where participation is technology-neutral to help overcome barriers typically seen for battery storage, and provide additional revenue streams for owners/operators of TES. 3 There are also sector-specific barriers, which are addressed in detail in Chapter 4. 32 INNOVATION OUTLOOKPDF Image | THERMAL ENERGY STORAGE Outlook
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