Batteries not included...yet

Estates Gazette, 17 September 2016

Author: Dan Jestico

The UK is using more electricity than ever before, with higher plot density, taller buildings, constant waves of new technology and growing levels of building IT specification across both residential and commercial buildings all contributing to increased demand. This has implications not just for how the national supply of electricity is managed, but also how our buildings and infrastructure will cope, particularly in city centres where growing skylines lead to almost continuous infrastructure upgrade works.

The government is seeking to address the problem in part through renewable energy targets, but more needs to be done so we don’t run out of power. The property industry has a role to play. We need to be building in systems proactively to help future-proof our buildings.

The on-site solution

So how do we do that? On-site energy storage is definitely part of the answer. There are devices already available, such as the Tesla Powerwall and the Mercedes-Benz Energy Storage units that store electricity from the grid. If we combine these with smart meters and dynamic electricity tariffs, we can purchase and store energy during non-peak times, when rates are lower, and draw power from them during peak times, when tariffs are high. This would reduce energy costs and flatten out periods of peak demand – between the hours of 4pm and 7pm, November to February, taking pressure off the grid.

An additional benefit to energy storage is that it can also act as an emergency supply during power cuts to provide server back-up for businesses or to maintain power supply to life-saving equipment in a similar manner to existing uninterruptable power supply (UPS) systems.

Where renewable energy systems are in use, they can be used in conjunction with battery technology. If photovoltaic (PV) panels are installed, the power they generate can be stored – in commercial buildings, energy harnessed at the weekends can be used during the week. This has the added advantage of helping to overcome the intermittency problem of using renewables alone, where the electricity supplied does not always match system demand profiles.

If energy storage was to be used widely, we could reduce the need to build new power stations, alleviate local infrastructure headaches in cities and provide more sustainable and maintainable supplies that help meet energy targets.

So what’s not to like?


One of the main issues is that energy storage is not yet an economically viable option – but don’t be disheartened. In the next five years or so, we will see considerable change and the financials will start to stack up.

Figures currently stand at $350 (£262) per kWh, but by 2021 costs are expected to fall substantially to $150 per kWh. It is possible that new approaches to electrode solvents (used to deposit electrodes) and formation cycling (initial charging at the factory) could dramatically reduce this timeframe. Lithium-air batteries that hold more than four times the energy per kilogram of lithium-ion batteries would dramatically reshape the energy market.

The advancement in the technology is already apparent. For example, the second-generation Tesla Powerwall that is about to be released will offer almost double the capacity of the current 6.4 kWh lithium-ion, which lasts 3,000 charge cycles, nearly 10 times that of a mobile phone. These Tesla units can be combined and scaled to reflect the size and usage of the building. Mercedes-Benz’s Energy Storage, developed by Daimler AG, has an industrial-scale lithium-ion battery made up of 96 units totalling 500 kWh and there are others out there.

Reaping the benefits

Owner occupiers responsible for both capital expenditure and operating expenses stand to benefit the most from installing energy storage devices, not least because the installation costs of a smart meter with a variable tariff can be made back and more in energy savings.

Benefits for tenants are less clear cut, as landlords are unlikely to invest in storage infrastructure if they will not accrue direct returns. However, in offering a more energy-secure and sustainable development with better future-proofing, they may well find this improves the offering and marketability, especially if tenants are highly technology-dependent. There is evidence of developers implementing new technologies proactively – Land Securities, for example, is pioneering the first natural gas fuelled hydrogen fuel cell at 20 Fenchurch Street in the city of London, designed to reduce the building’s carbon dioxide emissions by up to 7%.

There might also be an incentive for occupiers in multi-tenanted buildings to install energy storage systems themselves, so long as they have sub meters and are not on a flat payment tariff. They can then be in control of their energy usage as well as managing the costs of that usage. The government could help incentivise this by subsidising those who produce surplus energy given back to the grid.


If adopting energy storage in the form of battery technology is not yet viable, there is nothing to stop provisions being made for future installation. New developments could include dedicated plant space to house such technology later.

In fact, this type of future-proofing is something that could be enforced through the planning system, with the Greater London Authority taking the lead. The London mayor, Sadiq Khan, is also pushing for more innovative energy solutions such as energy storage to be introduced to the property sector.

Batteries might not yet be included in our buildings, but they will in the not too distant future.

Dan Jestico is head of research and development at Hilson Moran