The Department for Net Zero and Energy Security (DESNZ) has confirmed the go-ahead of a scheme intended to stimulate investment in the UK’s long-duration energy storage (LDES) sector.
Announced on 10 October, DESNZ said the Long Duration Electricity Storage investment support scheme will “boost investor confidence and unlock billions in funding for vital projects”.
“This could see the first significant long duration energy storage (LDES) facilities in nearly 4 decades, helping to create back up renewable power and bolster the UK’s energy security.”
LDES technologies store renewable energy and release it onto the grid when required. It includes pumped storage hydro, which stores electricity by pumping water up a reservoir, to be released later.
The putative cap-and-floor mechanism aims to overcome some of the traditional barriers that have hampered LDES deployment, notably the high up-front costs, which are difficult to cover with the revenue streams generated by LDES schemes. Such a model would provide a guaranteed minimum income for developers, in return for a limit on revenues. Its introduction follows a consultation held earlier in the year.
Ofgem has agreed to act as regulator and delivery body and the scheme’s first round is expected to be open to applicants next year.
The UK currently has 2.8 GW of LDES across four existing pumped storage hydro schemes in Scotland and Wales, which already play a significant role in powering the country.
LDES technologies at an earlier stage of development include: liquid air energy storage, compressed air energy storage and flow batteries.
The announcement follows a consultation held earlier this year where Scottish Renewables supported a ‘cap and floor’ scheme to encourage investment in LDES. The cap and floor model announced by DESNZ provides a guaranteed minimum income for developers, in return for a limit on revenues.
Ofgem has agreed to act as regulator and delivery body and the scheme’s first round is expected to be open to applicants in 2025.
