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Energy storage - government commits investment

A funding boost of £28 million has been granted for energy innovation projects, including energy storage.

Up to £9 million of this funding will be in respect of a competition to reduce energy storage costs.

Over £500,000 has been committed towards feasibility studies on large scale energy storage projects.

The investment also sets aside up to £7.6 million for advancing energy demand side response technologies and £9 million for 'industrial energy efficiency accelerator' – a competition to find new ways of improving energy efficiency for UK industry.

This commitment for funding is set out in the government's Industrial Strategy green paper for a post-Brexit UK. So what does the green paper promise?

10 pillars for driving forward industrial strategy

The green paper sets out ten pillars for driving forward industrial strategy. These include investing in science, research and innovation and delivering affordable energy and clean growth.

Energy storage

The government makes a commitment to energy storage. It has asked Sir Mark Walport, the government's Chief Scientific Adviser, to consider the case for a new research institution for work on battery technology, energy storage and grid technology. The aim is to be a global leader in battery technology.

Affordable energy

There is a commitment to minimise business and domestic energy costs. The government is to commission a review of how to support greater energy efficiency, how to best support reductions in the cost of offshore wind and how the government can work with Ofgem to ensure markets and networks operate as efficiently as possible in a low carbon system.

Clean energy

The green paper acknowledges the importance of renewable technologies. It starts a consultation on the technologies that the new Industrial Strategy Challenge Fund could support, and suggests that this could be used for smart and clean energy technologies. But there is no promise that investment will be made in this area. The technologies against which smart and clean energy would be competing include healthcare and medicine, space technologies and 5G mobile networks.

Consultation

Responses to the green paper must be made by 17 April 2017.

The market has already seen a steady growth in the number of live energy storage projects particularly in light of the National Grid Enhanced Frequency Response and Capacity Market tenders. The next hurdles for the industry include addressing the concerns around co-locating storage with existing renewables technologies, and looking to develop viable business models for behind the meter storage. It will be interesting to see what impact the government's commitment to investing in energy storage has on the take up and deployment of new projects.  

Contributor: Alexandra Holsgrove Jones

Our experience:

TLT can provide you with advice across the project life-cycle including advising on contracts with National Grid, negotiation of key project documentation, dealing with supply and commercial contracts, planning, site acquisitions and land documentation as well as corporate and funding transactions across all UK jurisdictions. 

  • We advised a client in relation to the high profile National Grid Enhanced Frequency Response (EFR) tender. We advised nearly 40% of those sites that were awarded contracts.
  • We acted on a significant number of the projects that were successfully awarded contracts in the National Grid Capacity Market auction.
  • We are working with clients in relation to firm frequency response as well as opportunities for storage projects to secure other revenue streams as part of a revenue "stacking" approach.
  • Most recently we have advised clients in relation to a number of prospective sites for stand-alone battery storage, co-location of battery with existing and proposed renewable energy projects and behind the meter opportunities. 


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