The UK government is making waves with its newly launched investment support scheme aimed at revitalizing long-duration energy storage (LDES) infrastructure. After nearly four decades of stagnation in investment for these critical technologies, the initiative signals a robust commitment to bolstering the country’s renewable energy landscape. LDES technologies, such as pumped storage hydro, serve as the backbone for maintaining a reliable supply of clean energy. They act like giant batteries, storing renewable energy when it’s abundant and releasing it when demand peaks.
Historically, the high upfront costs of these technologies have deterred potential investors, despite their low operational expenses. The government’s new scheme seeks to dismantle these barriers and ignite a wave of investment that could unlock billions for LDES projects. This is not just about keeping the lights on; it’s about ensuring that the UK can harness its renewable energy potential to the fullest. The introduction of a “cap and floor” model, which guarantees developers a minimum income while capping their revenues, is a strategic move designed to enhance investor confidence. With Ofgem overseeing the scheme, the first round of applications is set to kick off in 2025, creating a structured pathway for investment.
Current LDES capacity in Great Britain stands at 2.8GW, primarily from four pumped storage hydro schemes located in Scotland and Wales. However, the potential for growth is staggering. Studies indicate that deploying 20GW of LDES could save the electricity system a whopping £24 billion between 2025 and 2050. This could translate into lower household energy bills as the nation moves away from reliance on expensive natural gas. To achieve net zero by 2050, the National Electricity System Operator estimates that the UK will require between 11.5GW and 15.3GW of LDES capacity.
As the scheme progresses, it’s poised to create thousands of jobs and contribute significantly to the UK’s clean power supply. Energy Minister Michael Shanks emphasized the urgency of expanding the nation’s renewable capabilities, stating, “We are wasting no time in unlocking Britain’s vast renewable potential by expanding wind and solar power.” He underscored the necessity of increasing energy storage capacity to ensure energy security, particularly during periods when renewable sources are less productive.
The timing of this announcement is particularly strategic, aligning with the upcoming International Investment Summit. The government aims to re-establish the UK’s position on the global energy stage and stimulate a decade of economic renewal. The acquisition of the National Grid’s Electricity System Operator for £630 million last September further underscores the government’s commitment to enhancing energy security and expediting clean energy objectives.
While the road ahead is filled with challenges, the newly minted investment support scheme offers a glimmer of hope for the future of energy storage in the UK. It could very well serve as a catalyst for innovation and investment in LDES technologies, setting the stage for a cleaner, more secure energy future. The implications of this initiative extend beyond just energy; they touch on economic growth, job creation, and the overarching mission of transforming the UK into a clean energy superpower.
