The United Kingdom (UK) government is launching a new scheme to unlock investment opportunities in renewable energy storage technologies.
The Long Duration Electricity Storage (LDES) investment support scheme will “boost investor confidence and unlock billions in funding for vital projects which will help create thousands of jobs and deliver clean power as the country accelerates to net zero,” the country’s Department for Energy Security and Net Zero said in a statement.
Investments in the sector could see the first significant long duration energy storage (LDES) facilities in nearly four decades, helping to create backup renewable power and bolster the UK’s energy security, the agency said.
LDES technologies work like giant batteries by storing renewable energy and releasing it onto the grid and into homes when needed. This includes pumped storage hydro, which stores electricity by pumping water up a reservoir, to be released later. However, barriers such as high upfront costs have held back investments in the infrastructure, according to the statement.
The government announcement follows a consultation held earlier this year which proposed a “cap and floor” scheme to encourage LDES investment, which would provide a guaranteed minimum income for developers, in return for a limit on revenues. Energy regulator Office of Gas and Electricity Markets (Ofgem) has agreed to act as regulator and delivery body and the scheme’s first round is expected to be open to applicants next year, the statement said.
Great Britain currently has 2.8 gigawatts (GW) of LDES across four existing pumped storage hydro schemes in Scotland and Wales. Other technologies include liquid air energy storage, compressed air energy storage and flow batteries, which are currently in development and would benefit from investor support.
Analysis has found that deploying 20 GW of LDES could save the electricity system $30.61 billion (GBP 24 billion) between 2025 and 2050, providing cheaper renewable energy that would be available to meet demand at peak times, which would cut reliance on natural gas. Further, the National Electricity System Operator has estimated that a total of 11.5 to 15.3 GW of LDES will be required by 2050 to achieve net zero, the government said.
Several projects are currently under development, with some expected to be operational by 2030, and the introduction of an investment support scheme will help deliver them, according to the statement. Ofgem will design the investment support scheme, split into two application routes: one focusing on mature technologies, and the other dedicated to innovation.
UK Energy Minister Michael Shanks said, “We are wasting no time in unlocking Britain’s vast renewable potential by expanding wind and solar power. But we also need to increase our ability to store this energy for when the sun isn’t shining, or the wind isn’t blowing”.
“We’re reversing a legacy that has seen no new long duration storage built for 40 years—and taking steps to unleash private investment in both established and new technologies,” he continued. “With these projects storing the surplus clean, homegrown energy produced from renewable sources, we can boost our energy security by relying less on fossil fuels, protect household bills, and help deliver our key mission to make Britain a clean energy superpower”.
Beatrice Filkin, Director of Major Projects at Ofgem, said, “We are pleased to see the government’s publication today on its plans for long-duration electricity storage. Unlocking investment in this important technology is another significant step towards decarbonization of the power system”.
“We are looking forward to continuing to work closely with government as we take on the role of regulator and investment support scheme delivery body for the sector,” Filkin added.
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