The UK government is to introduce a cap-and-floor scheme to support the building of long-duration energy storage (LDES) infrastructure.
The Department for Net Zero and Energy Security (DESNZ) said on 10 October the scheme would provide developers with a guaranteed income – should their annual gross margin fall below a set threshold – in exchange for a limit on revenues. It is aimed at pumped hydroelectric schemes, as well as more nascent industries such as flow batteries, liquid air and compressed air energy storage.
A similar scheme is already used to help pay for interconnector power links with other countries.
Flow battery manufacturer Invinity Energy Systems called the scheme “a pivotal moment” in the UK’s energy transition, and said it will unlock significant investment for LDES technologies like vanadium flow batteries.
Energy company Drax is planning to expand its existing Cruachan pumped storage facility in Scotland with a new 600MW plant while SSE is planning a £1.5 billion ($1.96 billion) hydro project, also in Scotland.
LDES is required to support the UK’s renewable power fleet and bolster the country’s energy security, DESNZ said. Some 20GW of new capacity could save the system £24 billion ($31 billion) between 2025 and 2050, it claimed. It could see the first LDES facilities in nearly four decades, according to the ministry. The scheme was proposed by the last Conservative government earlier this year.
The Labour government, which took office in July, is planning to fully decarbonise the UK’s power system by 2030. Britain’s energy regulator Ofgem will design the scheme with the first round to be open for applicants next year.
Photo: 0.8MWh of flow battery storage installed near Perth, Scotland. Invinity
