United Kingdom Energy Storage Market
Energy storage is a high priority for the UK Government and a key component of the government’s push towards a net zero carbon economy.
The government is investing more than $4 billion in low-carbon innovation, as the UK aims to end its contribution to climate change entirely by 2050. Additionally, legislation came into force last year allowing local planning authorities to determine projects with a capacity of over 50MW in England and 350MW in Wales. These were previously determined by central government, making the process longer and more complex.
The UK has the largest installed capacity of offshore wind in the world; however, since the availability and speed of wind is not constant, energy can sometimes be produced when it is not needed and then lost. Batteries and other energy storage methods are vital for maintaining consistent supply from renewable sources, which naturally fluctuate over hours, days and weeks. They help grid operators finely balance the supply of electricity to meet demand, and provide extra resources when needed, such as for frequency response.
As the UK decarbonizes its power mix by increasing the share of renewables and closing coal assets, events like the cold snap of early January 2021 - when cold temperatures and low wind-power outputs caused intraday prices to rise above £1,000/MWh - are likely to become more frequent. This is due to the loss of the flexible source of supply that coal assets represented.
Flexible technologies like batteries will form part of the UK’s smarter electricity grid, supporting the integration of more low-carbon power, heat and transport technologies, which it is estimated could save the UK energy system up to $60 billion by 2050. Energy storage has also played a key role in balancing the UK’s electricity system during the 20% drop in demand during the COVID-19 pandemic, ensuring what was produced was used efficiently.
The past year saw an increased interest in battery storage co-located with wind and solar and we are now seeing more planning applications being submitted for these projects: siting storage with solar or wind that has an existing grid connection can save on planning restrictions and transmission network costs; the batteries can also directly reduce the chances of renewable power being curtailed at times when supply of electricity outstrips demand.
Additionally in late 2020, consent was granted for the UK’s largest battery energy storage project. InterGen, which currently supplies around 5% of the UK’s power generating capacity, has been granted consent by the UK’s Department for Business, Energy and Industrial Strategy (BEIS) for a lithium-ion battery energy storage project as part of their Gateway Energy Centre development on the banks of the River Thames in Essex. The project is more than ten times the size of the UK’s largest operational battery project and is set to be one of the world’s largest. It will provide fast-reacting power and system balancing to support the ongoing growth and integration of renewable energy sources and is a significant piece of system architecture critical to the UK’s transition to net-zero. The $300 million project will have a capacity of at least 320 MW / 640 MWh, with the potential to expand to 1.3 GWh. When fully charged, the project could power up to 300,000 homes for two hours. However, it will mostly be used to support and stabilize existing electricity supplies by providing fast-reacting power and system balancing.
Major developers of UK energy storage projects include EDF, Pivot Power, Statera, and RES, with each company active in several power supply and flexibility markets, providing services to National Grid, Distribution Network Operators (DNOs), as well as operating in the wholesale energy markets.
An event of interest for U.S. companies looking at opportunities in the UK energy storage market would be The Energy Storage Summit taking place in February 2022.
For more information contact Claudia.Colombo@trade.gov.