A new era for renewable energy in the UK begins today as Ofgem launches a scheme to accelerate the development of long-duration electricity storage (LDES) projects for the first time in 40 years.
Ofgem’s new “cap and floor” investment support scheme will unlock billions of pounds in funding to build LDES projects, which provide vital back-up for the renewable power system.
These facilities work like giant batteries that store electricity created by wind and solar farms, then release it to the grid when needed.
One LDES method is pumped storage hydro (pictured), where water is pumped up to a mountain reservoir using cheap renewable electricity and released later to generate electricity when demand is high and other generation sources are more expensive.
Other LDES technologies include liquid air energy storage, compressed air energy storage and flow batteries, which are currently in development.
Large-scale storage provides the grid with both security and flexibility to dispatch electricity to manage seasonable peaks or low renewable output over a period of time.
The UK government, advised by National Energy Systems Operator (NESO), has identified the expansion of LDES as crucial to its ambition to achieve clean power by 2030 and the drive to reach net zero by 2050.
However, no new LDES infrastructure has been built in Britain for 40 years as barriers including high upfront costs have held back investment.
Ofgem says its new cap and floor scheme will break down this blocker, boosting investor confidence with the security of providing minimum revenue for LDES operators to manage high start-up costs and long build times.
The scheme will ensure value for money by driving down costs, only allowing efficient projects with a storage capacity of more than eight hours, Ofgem said.
At the same time, the regime protects consumers with a cap on profits, meaning any excess revenues flow directly back to customers via their bills.
Ofgem director general for infrastructure Akshay Kaul said: “Renewable energy is the key to securing Britain’s energy independence and driving down customer bills in the long term – so it’s vital that none of this precious resource goes to waste.
“By creating the confidence for investors to support new projects such as super-batteries capable of storing the extra electricity created when the wind blows hard and the sun shines strong, we can reduce the need to turn to fossil-fuelled power as back-up when the weather changes.
“For decades hydropower has played an important role in our energy system and we expect it and a range of other storage technologies to make an even greater contribution to grid stability, with more projects ready to bid to play their part in this unprecedented investment in energy storage.”
NESO, in its Future Energy Scenarios report, has advised the government to add an indicative range of 2.7GW to 7.7GW of stored power by 2035.
This addition would at least double Britain’s current strategic reserve of 2.8GW spread across four pumped storage hydro schemes in Scotland and Wales.
Chief executive of the British Hydropower Association Kate Gilmartin said: “This is a historic moment for the UK’s energy system. We’ve not built a new pumped storage hydropower (PSH) facility in nearly 50 years, but with over 10GW and 200GWh of shovel-ready projects, the hydropower sector stands ready to deliver.
“PSH is a proven technology that will deliver for at least 80 years, will strengthen grid stability, reduce curtailment, support system resilience and enable the transition to net zero.
“These infrastructure projects bring substantial economic benefits, supporting thousands of skilled jobs, bringing economic benefits across communities and securing investment in domestic supply chains.
“This marks the beginning of a new era for clean, reliable and secure energy storage in the UK.”
RenewableUK’s senior policy analyst Yonna Vitanova hailed Ofgem’s announcement as an “important milestone” in delivering an energy system powered by domestic clean energy.
“We need low-cost wind and solar to be complemented by long-duration storage systems, like the pumped hydro plants we have in Scotland and Wales, if we’re to create an energy system which delivers the lowest cost electricity for billpayers,” Vitanova said.
“There are a number of shovel-ready projects across the country which could go forward under this scheme, and we would expect to see them come online by 2030 or soon after.
“These are major infrastructure projects, bringing new jobs and investment to the UK at a time we need to stimulate economic growth.”
Source: reNews
