The British Government Plans To Introduce Policies To Support Long-duration Energy Storage Systems By The End Of 2024

Industry insiders have revealed that the UK government plans to introduce policies specifically aimed at long-duration energy storage (LDES) by the end of next year. The topic was discussed by the "Finance Returns of Long Duration Energy Storage Systems" panel at the European Energy Storage Summit in London.

Speaking in response to audience questions, Tom Vernon, CEO of Statera Energy, mentioned the company's investment in pumped hydro storage projects, stating "Our investment in pumped hydro storage projects is not a bet, but a trend in the energy storage industry. The UK government plans to introduce policies supporting long-duration energy storage systems by the end of 2024, and is exploring a basic mechanism. We are working hard to prepare our long-duration energy storage assets for commercial operation."

Ben Francis, Director at InfraCapital, also spoke at the summit, discussing the company's investments in long-duration energy storage developers EnergyNest (thermal energy storage) and Corre Energy (compressed air energy storage). Corre Energy is deploying a 320 MW compressed air energy storage system for Dutch utility company Eneco, with a duration of 84 hours, meaning potential storage capacity of around 27 GWh.

"He [Eneco] has said that in the UK, battery storage for renewable energy can only achieve 50% decarbonization, and the rest needs to be dependent on long-duration energy storage," Francis said.

The discussion then turned to commercialization moves for long-duration energy storage, such as established contracts for difference (CfD) schemes, with Vernon adding, "I'm not sure how CfDs work for storage systems, which are complex assets that can charge and discharge."
 

Robert Hull of Riverswan Energy Advisory, speaking about pumped hydro and long-duration energy storage technologies, said that the UK energy storage market needs reform.

"If there is no funding support or government intervention, I think some of these long-duration energy storage projects will struggle to succeed. We have 3 GW of pumped hydro facilities in the UK providing good services and energy trading, but the biggest problem is building new pumped hydro facilities and raising funds for them, which is difficult to achieve commercial operation for such large and flexible assets due to market design," he said.

According to industry media reports, independent power producer Drax announced last year that its pumped hydro storage project depended on a new market framework for long-duration energy storage systems.

The UK's Department for Business, Energy and Industrial Strategy (BEIS) provided around £68 million ($80 million) in funding for long-duration energy storage projects at the end of 2021.

Vernon said the increase in wind power generation in the grid will drive demand for long-duration energy storage in the UK, as wind power has greater variability and fluctuation than solar power facilities and over a longer time span, requiring long-duration energy storage systems.

When discussing broad long-duration energy storage technologies, he said mechanical storage was an area to watch and hoped the UK government would distinguish between long-duration energy storage technologies when designing policies.

In response to an audience question about interest in investing in long-duration energy storage systems, Hull noted that although project timeframes of up to 8-10 years may seem risky, the 50-year operating lifespan of long-duration energy storage systems can offset that risk, making it a suitable time frame for such investors.