UK grid-scale battery storage gets £500m boost

RWE

THE UK National Wealth Fund (NWF) has joined two private investment firms in committing a total of £500m (US$671m) towards three grid-scale battery storage facilities across England and Scotland.

Eelpower Energy, the company being set up to build and operate the three facilities, says they will have a combined storage capacity of 300 MW, although it hopes to attract further investment by the end of the year to extend its plans to 1 GW.

Battery storage will be essential as weather-dependent renewables make up a growing share of the energy mix. By 2030, the UK government targets 43–51 GW from offshore wind, 45–47 GW from solar power and 27–29 GW from onshore wind. The government estimates that to achieve these goals the grid will require 23–27 GW of battery storage capacity.

At the end of last year, the UK’s battery storage capacity was less than 20% of the 2030 target, at 4.5 GW. Offshore wind capacity was around 34% of the minimum 2030 goal, solar capacity was 37% and onshore wind was at 53%. NWF interim CEO Ian Brown said he aims for their investment to “help meet the government’s clean power targets”. NWF is wholly owned by the UK government but operates independently, managing a £27.8bn investment budget.

Eelpower Energy is in principle “technology agnostic”, although it expects in the immediate future to primarily use lithium-iron-phosphate (LFP) batteries. LFP batteries are known for being one of the safest types of lithium-ion batteries, and they are free of the heavy cost and ethical considerations that come with nickel- and cobalt-based technology. LFPs have gained prominence in recent years, driven in part by their adoption in Tesla and BYD vehicles, which accounted for 68% of all LFPs used in new electric cars sold in 2022.

The precise ownership structure of Eelpower Energy is not clear, although British startup Eelpower Limited will hold only a minority stake. Eelpower Limited currently operates four storage facilities across England and Scotland with a combined capacity of 90 MW, and is constructing three additional sites totalling 150 MW.

The company will be led by the existing management team of Eelpower Limited. CEO Mark Simon said: “Battery storage is key to enabling the growth of abundant, low-cost renewable energy and without this technology the energy transition cannot succeed.” He added that he is confident Eelpower Energy “will accelerate the rollout of flexible energy storage assets across the country that are so critical to delivering the UK’s decarbonisation goals”.

Private investment

Infrastructure investment firm Equitix, majority owned by Tetragon Financial Group, led the consortium of investors in establishing Eelpower Energy with a £100m commitment. Equitix primarily invests in UK projects, and its portfolio includes several offshore windfarm transmission networks. NWF and Aware Super have each committed up to £200m.

Aware Super’s investment follows the Australian firm’s pledge in 2023 to invest A$10bn (US$6.53bn) in the UK and Europe over a five-year period. The firm’s international head Damien Webb said the investment in Eelpower Energy “demonstrates our confidence in the battery storage sector’s role in delivering cleaner, more resilient energy systems”.