LONG duration energy storage schemes have been given a shot in the arm with the UK government establishing a cap and floor scheme to increase investment confidence in technologies needed to balance out intermittent renewables.
The National Electricity System Operator has estimated that 11.5–15.3 GW of long duration energy storage is needed by 2050 to achieve net zero. However, high upfront costs are deterring investment in technologies including pumped hydro, flow batteries, and compressed air energy storage that can store surplus renewable energy and release it when demand outstrips supply.
Following a consultation, the government will introduce a cap and floor scheme aimed at increasing investor confidence by guaranteeing a minimum price for the electricity they generate in return for paying back profits above a certain level.
Ofgem will design and regulate the investment support scheme, which is scheduled to open for applications in 2025. It previously established the cap and floor scheme used to attract investment in electricity interconnectors.
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 decarbonisation of the power system.”
The support will be divided into two streams. One will focus on established technologies including pumped hydro with a capacity of 100 MW and above, and a second on less established technologies such as compressed air energy storage, liquid air energy storage and flow batteries.
Several questions have yet to be resolved including whether established technologies will need to have a minimum storage duration of six hours to be eligible for the scheme, and the minimum capacity required to support novel technologies.
The government expects to release more information on this by the end of the year, with further details on how efficiency will be factored into investments and how technology readiness levels will be assessed before the application process opens.
It appears unlikely that the scheme will support lithium-ion battery projects as the government noted that while projects will not be solely excluded based on their technology, projects should be ineligible for support if they can already be deployed commercially.
Britain currently has 2.8 GW of long duration energy storage involving four pumped hydro storage schemes. These use cheap surplus power to pump water uphill and then release it to generate power when required. Other technologies being developed in the UK include liquid air energy storage which uses surplus power to liquefy gases and then release it through a turbine to meet demand. In June, Highview Power committed to building the UK’s first commercial scale facility in Carrington by 2026 following a successful trial of the technology at a site in Bury.
The government says that deploying 20 GW of low duration energy storage could save the electricity system £24bn (US$31bn) between 2025 and 2050, reducing energy bills as additional cheaper renewable energy would be available to meet demand at peak times, and cutting reliance on natural gas to plug the gaps.
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