Energy regulator Ofgem has selected a shortlist of long-duration electricity storage projects it says are vital to maximise renewable energy and reduce the cost of paying wind farms to switch off because the excess power cannot be managed.
A total of 77 projects designed to capture excess renewable power for later use, including lithium-ion, flow and sugar-based “super batteries”, as well as pumped-hydro electricity storage, will be considered for inclusion in a bill-payer-backed funding scheme intended to promote innovation and spread risk.
There were 171 applications in total.
The long-duration energy storage (LDES) program is intended to address the problem of intermittent supply from wind and solar, which often produce excess power the grid cannot use, and cannot be stored for later use either.
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Currently, wind farms are routinely paid not to produce power because of “constraints” in the national grid, which means the excess supply, predominantly from the north of Scotland, cannot be directed to areas of peak demand, chiefly in the south of England.
At the same time, gas-fired power stations in the south have to fire up to meet the demand.
Constraint payments exceeded £1bn in 2024 and are scheduled to increase as the energy transition accelerates, adding to consumer bills as renewable capacity is added to the grid faster than it is expanding to cope.
Ofgem says the LDES schemes will help reduce constraint payments and may, in time, reduce bills.
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Under the “cap and floor” funding scheme, bill payers will underwrite investment in the chosen projects, providing a floor, with revenue from future operations capped and any excess returned via lower prices.
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The model, which echoes the “contracts for difference” arrangements that have subsidised wind and solar power, is intended to give developers confidence to proceed with massive investments in developing technologies.
While li-ion and flow batteries are already deployed at a large scale, sugar batteries are unproven, and battery storage will have to expand enormously to deal with oversupply of power on the grid.
Pumped-hydro storage, in which excess power is used to pump water into reservoirs for later use, is a proven, reliable technology dating from the 1900s, but extremely expensive.
SSE’s planned Coire Glas project, which will see a hydro power station built a kilometre into a mountain overlooking Loch Lochie and connected by tunnels to a new reservoir on top, will cost an estimated £1.5bn.
Beatrice Filkin, director of major projects infrastructure for Ofgem, said: “Renewable power is the key to seizing control of our own energy system and ending the costly reliance on the turbulent wholesale gas market, so we don’t want to see a single watt go to waste.
“That’s why we need to boost our ability to store as much homegrown energy as we can to let the turbines keep turning when the wind is at its strongest – and on the days when the gusts drop and the sun doesn’t shine, that reserve of excess clean power can be called upon.”
Energy minister Michael Shanks said: “This is another huge step forward in reversing the legacy that has seen no new long duration storage built for 40 years – a technology that will see Britain take back control of its energy supply and protect billpayers for good.
“By scaling this up, we can transform the way electricity is supplied in this country when demand is high – using stored up low-cost, homegrown solar and wind power to help end our reliance on costly fossil fuel markets once and for all.”
