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4. POLICY INTERVENTIONS TO ACCELERATE DEPLOYMENT Chapter summary Key system-level barriers to the uptake of TES across the energy system include: • ThelackoftechnologyreadinessforsomeTEStechnologiesandthepresenceofcompetingtechnologies (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 R&D focus on battery storage, when thermal storage can provide significant benefits to energy systems with high heating or cooling loads. • Uncertaintyinhowthefutureenergysystemwilldevelop,whichleadstoareluctancetoinvestinlong-term or large-scale projects. • Siloedthinkingacrossdifferentenergyvectors(i.e.heatandpower)anddifferentsectors,leadinginsome 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. Policy makers can implement a range of technology push, market pull and enablers to encourage the uptake of TES. The precise combination of these, as indeed with the combination of relevant TES technologies, is dependent on the characteristics of the energy system. The main technology push interventions involve: • Investing more into R&D of TES technologies, enough to match the potential that they uniquely have to facilitate the decarbonisation of the heat, power and cooling sectors. • Fundingdemonstrationstohelpbuildmarketawareness,increaseconsumerconfidenceandprogressTRLs. The supply chain is mature for some technologies, but those with the most potential for integrating higher shares of renewables are generally at a lower technology readiness level. The main market pull interventions involve a greater emphasis on heat decarbonisation, incentivising flexibility and unlocking ancillary services markets for thermal storage: • Removingfossilfuelsubsidiesandintroducingapriceoncarbontosignificantlyimprovethecompetitiveness of low-carbon heating systems. • Encouragingmechanismssuchastime-of-usetariffstoincentivisedemand-sideflexibilityandhelpreduce consumers’ bills, as well as increase the utilisation of renewables. • Ensuring participation in ancillary services is as technology neutral as possible to help overcome barriers typically seen for battery storage, and provide additional revenue streams for owners/operators of TES. • Adoptingalong-termviewonthedevelopmentanddeploymentofTES,andprovidingincentivesthatde-risk such projects for investors. 106 INNOVATION OUTLOOKPDF Image | THERMAL ENERGY STORAGE Outlook
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