SMS GRID SCALE ENERGY STORAGE: Powerful BESS Owner and Operator Fuels UK Growth

Critically essential but unfortunately underappreciated, battery storage is the vital missing link between usable energy in homes and businesses and modern renewable generating capacity. Discussed less than the major windfarms that now stand around the world, or the shining solar panels that sit across rooftops and open land, batteries provide the flexibility that a renewable energy system of the future will depend on. When the sun isn’t shining and the wind doesn’t blow, batteries will be the source of energy, endlessly collecting during peak generating hours and then discharging in hours of peak demand. Bidirectional and grid scale, storage of this kind is much less developed than the infrastructure that feeds it, and this is a problem.

In the UK – a world leader in the space – progress is being made and innovation is rife. But battery storage is still a developing market and building this industry is part of a wider mix of solutions for a vast problem. Without battery storage, there would be a need for a complete, societal change in lifestyle to decarbonise while increasing electricity consumption – not feasible.

At the centre of a problem-solving community is Smart Metering Systems (SMS). As a group, SMS is headquartered in Glasgow and was established in 1995. The company has a large and strong historical business in the energy industry as an installer and owner of smart meters that display household or business property energy usage in real time, in monetary values. This data provides opportunities to make savings and reductions but more imnportantly enable a much smarter grid. But today, SMS is much more than this and is positioning itself as a key provider and enabler of decarbonisation across the economy, from battery storage to EV charging, to multi utility integration.

John Flaherty, MD at SMS Grid Scale Energy Storage, tells Energy Focus about the nature of his division – home to a team of engineers with a quarter century experience in design, supply, installation, operation, maintenance, and optimisation of battery energy storage systems (BESS) – and why it is quickly growing in significance. 

“There is a gap between renewable generation and demand,” he says of a changing sector, where thermal power plants are being replaced by greener alternatives. “We have been able to forecast demand easily – there is a spike in the morning as people get up and get ready for work, there is then steady usage throughout the day followed by a significant jump in the evening as people get home from work but industry continues working. That has been the case for a long time and gas, coal, and nuclear can be informed about turning up to manage that well in advance.”

Introducing modern renewable sources to the system brings positives around carbon emission reductions but also creates challenges including unpredictability and intermittency. Here, innovative battery systems are the only viable solution.

“You lose the ability to match generation and demand perfectly,” admits Flaherty. “We have to bridge the gap and manage the difference between forecast demand and available generation so that the National Grid can deliver what is required. Part of that is ensuring that there is back up if a power station was to break down or there was some sort of failure. Batteries play a critical role in those really testing periods – typically the peaks. But the testing periods will be when generation is out of sync with demand and that will be during the day as we switch from thermal to renewable generation.”

‘Grid scale’ means SMS is focussed on stabilising and balancing the grid, while also providing a layer of protection but, crucially, doing so at regional and national scale. Right now, the company has a firm pipeline of 860MW of BESS projects and aims to deliver 1500MW by 2030, 10% market share in the UK, and a commitment to sustainability encapsulated in the SMS group target of Net Zero operations by 2030.

It is the provision of flexibility in the grid which makes the SMS offering so appealing. “We are very much behind the need for flexibility in the system so that everything else can happen. We are not a wind and solar constructor and owner, but flexibility is in our wheelhouse,” says Flaherty. “We can adapt as the market changes, depending on the needs that happen to be around at that time. We are doing it now at large grid scale but we also acquired an aggregator so that we can do it at smaller scale. It’s present across the business and flexibility is at the core.”

POSITIVE PROGRESS

In February 2021, SMS   the start of construction of a 50MW BESS in Burwell, Cambridgeshire. The system is made up of lithium-ion batteries which store power from renewable sources including wind and solar. Energised by SMS in January 2022, the site in Burwell became one of the largest BESS projects in the country, with the ability to serve thousands of homes with power.

In the same year, construction began at a similar project in Barnsley, South Yorkshire. This 40MW project was delivered in January 2023, providing grid flexibility and balancing at an important time of year with cold weather and gas shortages. At the same time, SMS also announced the completion and operation of a third site – a 50MW project close to Ipswich, Suffolk. The projects in South Yorkshire and Suffolk are home to lithium-ion batteries capable of storing enough electricity to power 40,000 UK homes. 

“With the energisation of our first three storage sites, and three more projects already under construction, our ambitions for leading the growth of this fast-emerging sector couldn’t be much clearer,” Flaherty said. “Our batteries will play a significant role in improving the integration of renewables and help bolster system resilience as we come to rely on clean energy generation. Such benefits are central to reaching net zero emissions, and our aim as a business is to deploy the low-carbon assets required at scale to achieve that goal as soon as possible.

“Alongside decarbonisation, energy security is one of the key challenges facing the UK’s transition to a net zero economy, and battery storage is a linchpin technology on both of these critical fronts. Storing energy so it can be used later to meet demand, when and where it is most needed, is not just essential for increasing domestic generation of cheaper renewable energy, but also for enhancing the reliability and resilience of our grid as we move to a low-carbon system,” Flaherty highlighted.

“By investing in and developing grid-scale storage capacity, as SMS is doing, Britain can finally wean itself off fossil fuel imports and achieve true energy independence. Through our pipeline of energy storage projects, to be delivered over the coming years, we’re proud to be helping make energy in the UK more sustainable, secure, and affordable today, and for generations to come.”

SMS CEO, Tim Mortlock, agreed saying: “The case for battery storage and the wider benefits they deliver to the grid is undoubted. When operational, our batteries will play an important role in improving the adoption of cleaner, lower-cost renewables and help bolster system resilience as we come to rely on more intermittent forms of generation. An increased capacity of batteries on the grid will, in many ways, also contribute to a more affordable energy system for consumers. These benefits are central pillars of the Government’s Net-Zero 2050 target, and our business strategy is to deliver the network of low-carbon assets needed to reach that goal as soon as possible.”

FUTURE PROOFING

The National Grid’s Future Energy Scenarios (FES) report 2022 found that total UK energy storage requirement by 2030 (excluding vehicle to grid (V2G)) increased by 7.2GW (from 2021) to 18.7GW, of which 14.1GW is expected to come from batteries. Total UK energy storage requirement by 2050 (excluding V2G) increased by 5.1GW (from 2021) to 38GW, of which 26.2GW is expected to come from batteries.

While this is good news for market leaders like SMS, it also highlights a significant amount of work to do as electrification and pressure to decarbonise increases. Alongside work in the EV charging space and development of a Demand Flexibility Service, BESS projects feed into a larger sustainability promise across the SMS group, highlighted in the company’s purpose – serving our customers, protecting the environment, and also in the SMS vision – to be at the heart of the low-carbon, smart energy revolution.

“Storage is fundamental to the company’s goals,” states Flaherty, an industry veteran, with experience across a range of energy and financial organisations. “We have the history and scale, and we entered storage because it ticked a lot of boxes. It was a natural way for us to continue growing and a way to utilise skills in the business that were otherwise externally focussed. We had a lot of high- and medium-voltage engineers that were wholly focussed on transactional jobs who are now helping us build a fleet of assets to own and operate in storage.”

The company’s vision is to deliver the future of smart energy and its work to date shows that this is a realistic vision and not an unachievable fantasy created to satisfy a report.  

“We have a visibly growing and highly successful grid scale storage part of the company. We are growing and building EV charging infrastructure. And we have a variety of commercial and domestic propositions that are in early stages but if they were mainstream, people struggling with domestic energy bills right now would be significantly better off if national and local policy had been more encouraging prior to the energy crisis.

“There is an environmental angle, there is a social responsibility angle, the decarbonisation of businesses and transportation, and reducing bills – our work fits into it all,” confirms Flaherty.

This has been recognised by industry peers with SMS claiming notable accolades in recent times. In December 2022, the company was lauded with the ‘Net Zero Leaders’ prize at The Energy Live News Consultancy Awards (TELCA) 2022. This prize is awarded to energy businesses which make an outstanding contribution to the UK’s national net zero carbon emissions objectives, as well as the low-carbon goals of clients.

In November 2022, Tech Nation – a climate technology scale up organisation previously backed by the UK government – labelled SMS as one of nine climate tech unicorns (a start up with a valuation of over $1 billion). Alongside others in the sector, Tech Nation described SMS as a driver of the smarter, greener, and more affordable energy system of the future, powered by innovation. The company also received recognition from the London Stock Exchange, through its Green Economy Mark, for its contribution to climate change mitigation.

“We are a cradle to grave business. We self-develop sites, we trade them ourselves, and we own them forever. We are looking for scale and will be a major player in this space for the long term in line with our overall business model,” says Flaherty of the company’s all-encompassing, long-term approach.

With a lot of energy and enthusiasm going into ideas around renewable energy generation and much planning going into carbon emission reduction technology and systems, the all-important network that backs everything up remains tied to storage capability, and this is why the problem-solving work of SMS – although sometimes underappreciated – is more vital than ever before.

“SMS is committed to being a leader in this space. The ability to design, deliver, operate, and optimise is within the business already and for that reason we are set to succeed,” concludes Flaherty.