The UK government announced plans to reform the capacity market (CM), its main mechanism for ensuring security of electricity supply. They include consulting on new contracts for low carbon technologies to incentivise their participation in CM auctions.
Competitive auctions will be held between technologies such as batteries and gas-fired generators. It will incentivise “greener, flexible technologies” to compete in CM auctions by offering multi-year contracts for low carbon flexible capacity, such as smart demand-side response technologies and smaller-scale electricity storage.
The government will also evaluate the role government energy policy has in supporting projects with long build times and the relationship between the CM and wider government support for large-scale long duration electricity storage (LDES).
Anthony Price, Managing Director of Swanbarton, a UK-based energy storage consulting company, said the cost of LDES has to start coming down. Sales of LDES have not been as high as short-duration batteries and so the economies of scale have not been realised.
