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Getting the UK’s grid ready for net-zero: the need for long-duration energy storage

Getting the UK’s grid ready for net-zero: the need for long-duration energy storage

Britain has decarbonised faster than any other major economy in the world, thanks in large part to the fantastic renewable resources we have. But last year some of that valuable renewable power, enough to supply more than 1 million homes for an entire year, was wasted. For a country working hard to achieve ambitious climate targets it does not make any sense.

The simple reason why it was wasted is that our electricity system does not have the capacity to store enough excess renewable power in the right places when the weather is blowing in the country’s favour.

The Climate Change Committee has warned that without significant investment in flexible technologies such as long-duration storage, this problem is going to get worse in the years ahead. The Committee has forecast that curtailment levels of renewable power could rise to 50 TWh by 2050, up from 3.6 TWh last year.

Long-duration storage technologies may not have featured heavily in the Prime Minister’s 10-point plan but we believe they are a key component of any credible plan to keep the lights on, keep energy bills as low as possible, and bring power sector emissions to zero.

Short-duration lithium-ion batteries have been the main focus of policymakers to date when considering the role of storage, but what is often forgotten is that the speed and scale of the UK’s transition will also require flexible technologies that can store and generate electricity for much longer durations – from several hours to a full day, and even from several days to weeks in some cases.

While a growing number of industry experts from the International Energy Agency to the UK’s Climate Change Committee have all recognised the critical role of long-duration storage, barriers remain to the deployment of such technologies in the UK.

With the right policy framework, the UK can unlock development in new pumped storage hydro capacity which is the most cost-effective and proven technology to deliver flexibility and storage at scale. We can also accelerate the deployment of emerging technologies such as liquid air energy storage, flow batteries and hydrogen, all the while ensuring that the scaling-up of these technologies is done sustainably and in close consultation with local communities.

“Long-duration storage technologies are a key component of any credible plan to keep the lights on, keep energy bills as low as possible, and bring power sector emissions to zero.”

The need for such technologies is becoming more pressing every day. In March, the UK experienced its longest spell of low wind output in more than a decade, and while gas power plants filled the supply gap, the associated emissions are incompatible with our journey to net zero. Recent power crises that caused severe blackouts in California and Texas have also brought into sharp focus the need to adequately plan for extreme weather events.

Long-duration storage technologies can not only make a zero-carbon electricity system a reality faster, but they can also help it come at a lower cost for consumers. They can reduce the need to curtail, or shut down, excess wind or solar output and store it to be used later when required by the grid.

A recent study by researchers from Imperial College London found that just 4.5 GW of new long-duration storage, with 90 GWh of capacity, would save up to £690m per year in energy system costs in 2050. This ultimately would mean lower bills and greener energy for households, helping the environment and communities at the same time.  

There are also wider economic benefits, such as the creation of thousands of skilled jobs and injection of billions of pounds into often remote and rural areas of the country to support the government’s levelling-up agenda. In addition, certain long-duration storage technologies offer the UK tremendous export opportunities.

Despite the powerful case for utilising this widening range of storage technologies, a number of regulatory and market barriers stand in the way of deploying them at scale.

Current market design and existing support mechanisms do not reward long-duration storage technologies for the full value of services that they can provide. Revenue uncertainty over a storage asset’s life combined with the large capital investment required to deliver them makes these technologies difficult to finance. Just as the Contracts for Difference scheme has been very successful for de-risking renewables investment, long-duration storage requires a clearly defined revenue stabilisation mechanism.

Britain needs to reduce its carbon emissions fast, and these technologies are critical to doing so. That’s why environmental NGOs, energy companies and developers have come together to make the case for removing barriers to deploying these climate saving technologies in the UK.

Over the coming months we will work closely with the UK Government and other key stakeholders to develop the solutions needed to ensure these technologies can support our net zero ambitions alongside other forms of system flexibility such as interconnectors, demand side response and batteries.

The imminent release of the Smart Systems & Flexibility Plan update led by BEIS and Ofgem provides the UK Government with the perfect opportunity to kick start and accelerate this process. In the year of COP26 and with the global need for long-duration storage technologies growing, the UK can demonstrate leadership in this critical area to the energy transition and showcase how the planet as a whole can get on the path to net zero. We stand ready to unlock that potential.

This opinion article has been co-signed by the following energy and environment leaders:

  • SSE Renewables, Jim Smith, Managing Director
  • Drax Group, Will Gardiner, CEO
  • Highview Power, Javier Cavada, CEO
  • ILI Group, Mark Wilson, CEO
  • Invinity Energy Systems, Lawrence A. Zulch, CEO
  • Greenpeace, Dr Doug Parr, Chief Scientist and Policy Director
  • Green Alliance, Caterina Brandmayr, Head of climate policy

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COP26, Lockdown and ‘Jumping the Burn’

COP26, Lockdown and ‘Jumping the Burn’

Working in renewable energy I have a good understanding of the impact climate change is having, but the last 6 months have been a real eye opener, offering first-hand experience of the natural world we’re trying to save – and its right outside our doorstep.

We live beside a small river, a ‘burn’ that runs behind the back of our house with a walkway that snakes alongside. After 5 years of living here, the first time we became aware of it was on a walk at the start of lockdown. That was the first of many walks and adventures around our immediate area, nature trails, runs, bike rides, and “jumping the burn” with my son, sometimes successfully and sometimes not so successfully.

These were things we would never have discovered if we hadn’t been forced by the lockdown to pause and look around.  For my family the newfound ‘outside’ world is a revelation, and our appreciation hasn’t stopped with the loosening of restrictions. We are venturing further outside to the hills, glens, and Munros that are so close to hand here in Scotland. My wife and I, going against the strong advice of 90s all-girl pop group TLC are regularly ‘chasing waterfalls’ on our weekends. Trying to get our 10-year-old son to go on a walk before lockdown would not have happened without a V-Bucks bribe, but now his eyes have been opened to the natural world and he is keen to engage with it. It was only by being forced to stay inside that we re-discovered what was outside.

With this new found appreciation of the natural world we all sat together to watch David Attenborough’s recent Netflix documentary ‘A life on our Planet’ describing in detail the effects climate change was having on the planet and how perilously close mankind is to extinguishing itself and the life around it. The documentary provided a timeline.  This devastation would come, not at some distant future date but in my son’s lifetime.

As if to hammer the lesson home, following especially heavy rainfall our newly found river burst its banks for the first time in living memory.  I started to seriously consider what action what we collectively as a country can do.

The 2015 Paris climate agreement was a seminal monument for climate change recognition and worldwide action. At COP21 Leaders from around the world finally accepted the existential threat posed by climate change and had the will and understanding to make never before seen legal commitments on emissions and finances.

COP 26 in Glasgow (now postponed because of Covid until 2021) was when these Paris Commitments were to be reviewed, commitments renewed, and new targets set.  However, emphasising the urgency of the issue, the British Prime Minister has announced there will be an event held (virtually) on December the 12th of this year where he will ask world leaders to make their commitments now.

This year the world has been forced to deal with another global threat that doesn’t respect borders in the form of pandemic. COVID-19 has sadly taken over one million lives on the planet and impacted many more financially. But out of the crisis we have seen the UK, the EU, and other world powers commit to a Green Recovery.  As the PM has put it, this is a n opportunity for all of us to ‘build back better’.  We should grasp it with both hands.

Glasgow’s COP26 will now be a showcase of this new focused global synergy hopefully enabling us to take the harmonious tough action required to pull the planet back from climate precipice.  Myself, and everyone at Intelligent Land Investments Group, look forward to welcoming you.

Pumped Storage Hydro, COVID-19 and a Green Recovery

Pumped Storage Hydro, COVID-19 and a Green Recovery

The past 5 months, since the Covid-19 crisis hit the world, has provided a glimpse of what the future energy balancing challenges could look like in the UK.  With a 20% reduction in energy demand from the closure of businesses, coupled with the highest penetration of renewable energy on record (67% of generation coming from renewable sources in May), the challenge for National Grid ESO has been very real. 

These conditions have led to National Grid ESO issuing emergency powers to distribution  network operators (DNO’s), such as ManWeb, Npower, Scottish Power and the like, to disconnect embedded generation (typically distribution connected wind and solar farms) as a last resort to keep the lights on and avoid a situation like last year’s black out that affected large parts of the south of England. 

This reduction in demand, paired with high production from solar – with the sunniest spring on record – and solid wind production, has created a perfect scenario for energy storage, and a renaissance for Pumped Storage Hydro, in a bid to store this excess power.

Indeed, since the start of April, French company Engie who own the 1,800MW Dinorwig plant in Snowdonia, north Wales say they have pumped three times the energy volume during this time than it did for the whole of the period between April to September last year.

These conditions of low production from fossil fuel and nuclear generators, combined with a large penetration of renewable energy, mimic the future energy mix the UK is aiming for to meet its Net-zero targets. National Grid ESO has also predicted (in its Future Energy Scenarios document) that up to 38GW of energy storage will be required by 2050. We currently have 4GW of energy storage on the system. 

There is a pipeline of 4GW of PSH energy storage in the UK between SSE’s Coire Glas 1.5GW proposal, Drax’s extension of Cruachan (500MW), Glen Muckloch (100MW) and Glyn Rhonwy (200MW) in Wales, along with 3 PSH projects we are developing in Scotland (1.5GW+). The most advanced of these, Red John, is presently in the final stages of the planning process.

The much-delayed Government Energy White Paper will hopefully provide a timely boost for long-term energy storage like PSH. Ideally, this would take the form of a “cap-and-floor” mechanism, like those used to encourage construction of subsea interconnector cables from the UK to Norway. This would help offset the high capital cost of building infrastructure projects like PSH and also open the door for the investment and jobs these proposals bring with them. 

Our 3 projects alone will bring over 2 Billion of investment, with 70% of that being construction work. This would create thousands of Green Jobs to local companies, workforces and communities after the bombshell of COVID-19 and put the UK on target for the future Energy System needed to hit its net-zero targets. This would create a true ‘green economic recovery’ from the pandemic and a legacy to be proud of as the UK looks to take over the mantel of hosting COP 26 in Glasgow next year.

COVID-19 Green Economic Recovery?

COVID-19 Green Economic Recovery?

The European Commission last week announced its green recovery plan from COVID-19 pledging that the economic recovery from the virus would ‘do not harm’ to the long-term climate change goals. This has set down a real marker for the rest of the world in terms of commitment to a Green COVID-19 recovery.

The new green recovery plan will include a £196Bn a year for sectors tackling emissions

Including 91bn for home efficiency and green heating, 25bn a year for renewable energy, 10bn a year for 2 years for clean cars with a goal of getting 2m charging points and 60bn which will go to zero emissions trains.

Frans Timmermans, the European commission vice-president who oversees the European Green Deal, said “For many regions and companies including those relying on coal production and carbon-intensive industrial processes, this economic crisis has raised an existential question, Do we rebuild what we have before, or do we seize the opportunity to restructure and create different and new jobs?”

“In all the actions we are going to take, we apply the ‘do no harm’ principle so you can’t have investment that takes us in a different direction.” 

In the backdrop of this EU decision the COP 26 being hosted in Glasgow was officially postponed till 2021 with the agenda for next year likely to be dominated with a green recovery from COVID-19.

This year’s COP26 was seen as important as it would be when all nations would be obliged to renew their 5-year commitments made in the Paris Agreement 2015 and was first time this would be possible since the IPCC 1.5 degrees report, widely seen as real wake up call to the world on climate change. It’s thought the current commitments set out in the Paris agreement would set the world on 3 degrees rise, which the IPCC say would spell disaster around the world.

Achim Steiner, administrator of the UN Development Programme, said: “The UK presidency comes at an absolutely critical time. There is an extraordinary opportunity to restart the economy and look at creative ways [to recover]. We need to find ways to become more resilient.”

A spokesperson for the UK government said: “As hosts of Cop26 and the first major economy to legislate for net zero, the UK is committed to delivering a clean and resilient economic recovery from Covid-19.

“The great global challenges like climate change and biodiversity loss have not gone away and it will be the duty of every responsible government to see our economies are revived and rebuilt in a way that stands the test of time. That’s why we’re calling on all nations to come forward with more ambitious climate plans.”

UK Supply Chain For New Offshore

UK Supply Chain For New Offshore

Vattenfall and SSE last week released reports highlighting the shortcomings in the UK supply chain and other actions that would be needed for delivering the 40GW of offshore wind by 2030.

The Vattenfall report ‘Norfolk Vanguard and Norfolk Boreas Offshore Wind Supply Chain: Opportunities and Expectations Workshop’ was gathered from feedback from 580 companies over 20 events. It concluded that to achieve the 60% of UK content target of the Governments Wind Sector Deal “This would need developers to engage earlier and better with a collaborative and more ‘joined-up’ supply chain,” 

It highlighted that smaller enterprises are at disadvantage to meet Tier one expectations as engagement “only happened after developers were awarded Contracts for Difference and final investment decisions had been taken”. 

Vattenfall supply chain manager Rob Lilly said: “Our interaction with the supply chain has demonstrated the collective desire to deliver innovative, efficient, sustainable advances in technology for the next generation of renewable energy generating projects, while also contributing to the goals of the Offshore Wind Sector Deal, UK industrial strategy and clean growth.”

“The over-riding message from established and potential supply chain companies is that they would benefit from longer term planning and better understanding of how the sector works as a whole.”

This Echo’s the message from SSE who’s 9-point plan for delivering the 40GW of onshore wind by 2030 calls for “Strategic investment to support development of UK supply chain” stating “achieving significantly higher levels of UK content requires a strategic approach to investment from both industry and government in the facilities and capabilities needed to support the industry longer term.

“We should also be ensuring that UK companies are able to compete for contracts in the global offshore wind industry.”

Earlier this year in January the Scottish Government and the Crown estates led a meeting in Edinburgh to discuss this problem along with Equinor, Vattenfall, SSE Renewables, Saipem Red Rock Power and ScottishPower Renewables all in attendance.

They agreed that supply-chain commitments would have to be made when agreeing leases for new offshore projects.

Scotland’s former economic minster Derek Mckay said, “Scotland is the ideal location for offshore wind, but recent projects have not delivered the significant economic opportunities we want to see for Scottish businesses.

“The Scottish Government has been calling for the offshore sector to do more by awarding contracts to our indigenous supply chain but recent disappointments suggest that more has to be done.

“I will use every lever at our disposal to ensure that our renewables supply chain benefits from the expansion of offshore wind in our waters, leading to the creation and retention of Scottish jobs.

Colin Palmer, director of marine for Crown Estate Scotland, said: “Scotland has unique potential when it comes to offshore wind and we’re committed to doing all we can to unlock that opportunity. ScotWind Leasing will present Scotland as an attractive destination for the significant investment needed to deliver the scale of offshore wind projects we want to see.”

Lockdown Data Deluge

Lockdown Data Deluge

As PR and Media Manager I’m tasked with writing the company blog which today I am doing from my dining table in the living room, my makeshift office over the past 2 weeks. I’m also sharing the “office space” with my 10-year-old son as his home schooling classroom. My wife who runs her own hair salon from the house (now closed), is now acting as teacher, and disciplinarian to both of us.

Covid-19 has thrown the world into crisis and lockdown measures have now changed the face of human interaction in the workplace and socially to something straight out of the envisaged future in the Steven Spielberg Sci Fi hit movie “Ready player One”, where the inhabitants of earth in 2035 interact through VR to meet, socialise and work. My own living room this week has hosted a Rave Bingo Night and Zumba class streamed through Facebook and a dance class though Zoom. The new “House Party” app is now installed in all family members phones, including grandparents who have been forced to up their game in the tech stakes to stay connected.

Our daily work at ILI Group has been conducted remotely from home since the 16th of March using Zoom for frequent video conferencing between ourselves and other contractors and suppliers to keep the wheels turning.

At times you can hear the internet creaking under the pressure of this new deluge of data streaming from every connected internet capable device not just in my house but across the entire country and the globe.

In the UK service providers have reported double digit increases in broadband usage some reporting a 60% rise to normal weekdays and mobile providers reporting a 50% traffic increase as we all try to stay connected.

Chintan Patel, Cisco’s CTO said “This is an increase we would normally expect to see in a year, We’re now obviously seeing that in a matter of days and weeks.”

He continued, “designed to cope with the peak” of web traffic. “It’s just that the peak is at a longer time and longer duration now.”

“The internet is not just one thing, it’s like a living breathing human with lots of different neurons and connection points working to keep it alive, even if you cut off one finger, the rest of the body will keep it alive.”

In a deal announced by the Department for Digital, Culture, Media and Sport, broadband and mobile suppliers have responded to this new need by removing all allowance caps on fixed broadband services to help keep the most venerable connected.  The agreement struck between the Government ,T/EE, Openreach, Virgin Media, Sky, TalkTalk, O2, Vodafone, Three, Hyperoptic, Gigaclear, and KCOM will come into effect immediately.

They have said they will ensure all those who are struggling to pay bills will not be cut off and will offer new generous packages to the most vulnerable including free calls and data boosts to insure connection to friends and family. 

The digital secretary, Oliver Dowden, said: “It’s fantastic to see mobile and broadband providers pulling together to do their bit for the national effort by helping customers, particularly the most vulnerable, who may be struggling with bills at this difficult time. It is essential that people stay at home to protect the NHS and save lives. This package helps people to stay connected whilst they stay home.”

Watchdog Ofcom’s chief executive, Melanie Dawes, said: “We recognise providers are dealing with unprecedented challenges at the moment. So we welcome them stepping up to protect vulnerable customers, at a time when keeping in touch with our friends and families has never been more important.”



Across the world the effect of the Covid-19 pandemic are being felt, with over 100,000 deaths, huge disruption to industry and normal life as we know it. The centre of the outbreak has moved from China to Europe which is now recognised as the epicentre of the crisis. Italy has been seen the highest number of deaths reaching over 4000. Governments across Europe have issued social distancing measures ranging from total lockdown of communities to closing schools and recommending home working and avoiding social gatherings. These events and measures are unprecedented in modern times.

The UK government’s stay at home advice for households with possible coronavirus infection and working from home and social distancing measures it is predicted will see a new Electricity demand pattern to appear.  In fact, according to analysis by National Grid ESO, demand across the country would reduce in the event of long-term mass self-isolation due to likely reductions in industrial and commercial demand.

The Energy Networks association (ENA) who represent the UK electrical and gas transmission network operators have issued a statement to customers in the form of an open letter saying they have ‘well-practiced contingency plans in place so we can keep your energy flowing’ and have put in place robost contingency plans industry wide to ‘ensure arrangements for people and equipment required to keep the gas and electricity flowing’

David Smith, chief executive of the ENA, said “The UK’s electricity and gas network is one of the most reliable in the world and network operators are working with the authorities to ensure that their contingency plans are reviewed and delivered in accordance with the latest expert advice.”

On average the UK electricity consumption is roughly domestic 30%, industrial 26% and 21% commercial, this totalled 352.1TWhs last year. However, experts now believe these figures will change as we change our working habits with an increase in domestic use which includes residential use i.e. home workers and a drop in industrial and commercial however overall demand is predicted to fall.

The IEA international Energy Agency are concerned that the response to COVID-19 could see green energy transition efforts derailed, saying the ‘inescapable challenge’ of climate change must not be compromised by the impacts of the pandemic.

IEA executive director Fatih Birol said in a social media post, “The coronavirus crisis is already doing significant damage around the world. Rather than compounding the tragedy by allowing it to hinder clean energy transitions, we need to seize the opportunity to help accelerate them,”

He continued, ‘Large-scale investment to boost the development, deployment and integration of clean energy technologies – such as solar, wind, hydrogen, batteries and carbon capture (CCUS) – should be a central part of governments’ plans because it will bring the twin benefits of stimulating economies and accelerating clean energy transitions. The progress this will achieve in transforming countries’ energy infrastructure won’t be temporary – it can make a lasting difference to our future”

Net-Zero Hopes rest on Flexible Energy System

Net-Zero Hopes rest on Flexible Energy System

Last week the National Infrastructure Committee (NIC) released its annual assessment calling for a clear plan for delivering the “world class infrastructure that the UK needs” This annual report gives an assessment on key infrastructure priorities for the forthcoming year covering  all sectors of economic infrastructure everything from flood risk to digital communications to energy and transport.

The Energy Sector assessment highlighted Nation Grid ESO announcement last year that it would able to operate zero-carbon grid by 2025 and sees this a positive step but if it is to become a reality “this target must be backed by concrete action in line with the Commission’s recommendations.”

Its 4 main recommendations for the energy sector in 2020 are:

  • maintain access to future interconnector projects in negotiations with the EU, and prioritize retaining access to EU power markets and market coupling to ensure that interconnector capacity can be used in an effective way
  • amend the Electricity Act 1989 to define storage as a distinct subset of generation l continue to review the latest evidence on costs of and barriers to access for demand side response technologies in the capacity market
  • proactively facilitate the transition to more actively managed local networks and Distribution System Operators
  •  set out a clear level of ambition for overall system flexibility including a transparent framework to monitor it.”

All of these recommendations are to help the facilitation of the move away from traditional thermal generators and to accommodate further renewables on the system by adding the flexibility needed when you increase intermittent generators.

This increasing need was illustrated in a recent report from Cornwall insight showing the £30.9m that was paid to to windfarms to switch off after the western HVDC link failed in January. The Western HVDC Link is a high-voltage direct current undersea electrical link between Hunterston in Western Scotland and Flintshire Bridge in North Wales.

Lee Drumnone at Cornwall insight said, “The Western Link was designed to accommodate the increasingly high volume of power generated in Scotland and prevent transmission bottlenecks,”

But since commissioning the cable has been fraught with issues.” He added the “availability of the link makes a clear difference”.

“Avoiding constraints not only allows more volumes of renewable power to flow onto the Grid but reduces the amount of money that National Grid has to pay to turn off wind farms in Scotland,” he said. “However, the reliability of the Western Link will need to be solved for its full potential to be realized. As more onshore wind develops, especially in Scotland, the problems of constraints will need to continue to be actively managed.”

Moreover, a new report from the Trade body Energy UK, along with The Association for Decentralised Energy (ADE) and BEAMA have claimed that flexibility from storage and side response could save £8 billion per year by 2030 and upto 40 Billion by 2050.

Charles Wood, Energy UK’s head of new energy services and heat, said that a flexible energy system is “essential’ to “get anywhere near net zero.”

“The products, technology and finance are all there but the opportunities and incentives aren’t – meaning business cases for investment aren’t stacking up. Overall demand for power has been falling for some time but the electrification of heating and transport will greatly increase demand at peak times and flexibility will be absolutely essential to cope with this.

“We need to be ready for when that happens which means taking action now – otherwise we risk missing out on the benefits. We’re ready to work with the Government to deliver on all this potential but we need them to give it the priority it warrants.”

Renewable Energy: What’s the Cost?

Renewable Energy: What’s the Cost?

Last year, wind farms in the UK received £136m in payments to turn off production from their turbines. This was an increase of £8m over the previous year’s payments.  Due to the intermittent nature of renewable energy you cannot produce on demand; these shutdowns occur when the electricity network has no requirement for the power being produced. The compensation payments are paid by National Grid ESO when a wind farm is asked to switch off. The price paid for the shutdown has to match the loss in revenue, which often includes a subsidy payment as well as the sale value of the electricity. These payments are recouped from consumers through energy bills.

These figures are released annually to much furor and latched onto by the anti-renewable/turbines organizations as another reason why we should ditch ‘overly costly, ineffective’ renewable energy. However, these figures only tell part of the story.

The energy mix in the UK has changed dramatically over the last decade and we are now at the lowest level of fossil fuel use ever. In fact, we have gone from 7% of our electricity being generated by renewables in 2010 to 37% in 2019. We have reduced our reliance on coal from 75% of electricity to 2.2%, since 1990 levels. This has seen a massive CO2 drop over the decade, with most of the CO2 savings having been made by these changes to our electricity generation.  

This boost in renewable energy has in large part been due to the subsidies put in place by the Government over this time, with ROCs and FiTs driving investment in the renewable sector and creating the renewables industry we have today. These subsidies have now come to an end, with new renewables projects proceeding subsidy free or with backing from the much less costly CfD payments.

There is often a view that nuclear power is a more cost-effective solution to these problems. However, the level of backing these new plants require is double the per MW  value of the current ROC payments, with this still not being enough to encourage new developments. Indeed, Hitachi and Toshiba have pulled out of 3 proposed plants during the past year. At present, there are eight nuclear sites generating nuclear power in the UK. However, only one of these is planned to be operating by 2030.

The Government has backed 40GW of offshore wind by 2030 and it’s likely this will not be enough to fill the gap that nuclear power and reaching NetZero by 2050 will require.  Further solar and onshore wind will also be being needed. This amount of dependence on renewable energy will require a huge increase in energy storage, with National Grid’s Future Energy Scenarios predicting a capacity need of between 21GW and 38GW by 2050. Current storage capacity is 4GW.

As we move along this path it’s likely year on year constraint payments will increase until we have the right mix of energy storage available to store this potential power. However, the recent weather events in Australia and across the UK and Europe have shown the real-time consequences of climate change. Given the lack of alternatives available to us and the dire consequences of inaction now predicted across the scientific community, constraint payments seem like a small price to pay.

Is the UK ready for the Energy Transition?

Is the UK ready for the Energy Transition?

A recently released report from Global Market Insights has projected that the PSH market will hit $400 Billion by 2026. Recent CO2 commitments from major governments across the world plus the electrification of heat and transport will create further growth in sustainable technologies such as wind and Solar. This by its very nature will increase the need for energy storage.

National grid in the latest future energy scenarios document have estimated we will need as much as 37GW of energy storage in the UK by 2050, a 9-fold increase to our current amount of 4.3GW.

This poses a problem for the UK highlighted in a Renewable Energy Association(REA) report released last week. This showed the UK second from bottom in preparedness for the switch to a flexible grid that can manage an increased number of intermittent generators, when compared against France, Germany, Norway, Ireland, Denmark, Sweden, Finland and the Netherlands. Only France was less prepared.

They said “Decarbonising power means delivering flexibility; in a world of very low-cost variable renewable electricity, grids need to be organized differently and some services which were once taken for granted need to be actively procured,” the REA’s chief executive Nina Skorupska said.

“Crucially, as renewable power prices fall around the world every country will be experiencing the same shift. If Britain becomes a flexibility pioneer, then a whole world of markets for exporting our products and services opens up. Whilst this index shows we’re lagging behind, there’s still time to bounce back.”

A lack of visibility on returns and technical challenges to connecting to the network have been highlighted as the major factors to this performance, underpinned by regulatory uncertainty. Lack of short-medium term frameworks around EV networks, Energy storage, and compensation structures are particular policy concerns.

This is further highlighted in their “REA General Election Manifesto 2019” where they propose extending the Regulated Asset Base (RAB) funding model, currently being considered for Nuclear by the Government, to include large scale flexibility technologies such as Pumped Storage Hydro.

The RAB model helps companies raise private financial by providing a secure payback and return on investment for developers. This has been used to good effect in the past in the water industry (Thames Tideway Tunnel) to get high capital, critical infrastructure projects off the ground.

As a Pumped Storage Hydro developer, we are acutely aware of these challenges: regulatory uncertainty coupled with high capital costs. If we want to make good on our climate change commitments, a reduction in these perceived risks would be welcome.

The reinstatement of the Capacity Market is of course welcome, along with the commitment to new build contracts of 15 years for projects that meet a CAPEX threshold – this should help get new PSH moving. 

Regulatory changes like these and others proposed will be crucial in preparing the UK for the Energy Transition, making sure we are ready and able for the drive to Net Zero.

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