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The latest energy reforms and their impact on the energy storage market

As the UK moves towards net zero Connected Energy reviews Great British Energy, the energy reforms, and what they mean for energy storage.

21/08/2024

The recent establishment of Great British Energy is a strong declaration of the UK government’s intent to bring the country closer to net zero. We spoke to our Chief Business Development Officer, Rob Moore, about the latest energy reforms and what they could mean for the energy storage sector. 

The new UK Government has started its term with a strong message – we can make Britain a clear-energy superpower and meet clean energy targets by 2030. For anyone working in the clean energy and technology sectors, these are welcome aspirations and show that the government is serious about chasing net zero hard.

The new partnership between Great British Energy and the Crown Estate is a clear statement that this government will accelerate the investment and development of renewable energy projects in the UK.

Following a Nordic / Statkraft model, Great British Energy will place generation assets into public ownership. This model will allow citizens to feel the benefits of clean energy investment – through lower energy bills and profits for the nation – rather than the bank balances of energy developers.

Policy changes

One of the first – and very welcome – moves was to remove the de facto ban on onshore wind developments. This will help derisk projects and encourage the further investment into wind required to reach the UK’s goals.

In my opinion, the immediate greenlighting of some very large solar farms is more controversial. It makes a lot of sense for the Government to own and manage green energy assets. However, projects being rushed through planning, against the recommendations of planning officers for ecological and landscaping concerns is not a positive move. What we need is appropriately sized, quality solar farms with the ability to connect to the grid; more wind and more energy storage.

From experience, planning consent isn’t the biggest barrier to deployment – grid connections are. This is one of the biggest challenges which the country faces in meeting net zero goals. If we are to speed up the acceleration of quality renewables projects, then the lack of grid connection is where the government should start.

I hope we will see some firm announcements surrounding this which recognise and bring investment into the network to support the move to a more distributed energy system.

Reforming the connections queue

The new Connections Reform project, run by the National Grid ESO, is another ongoing development which will hopefully be a big step forward in the grid capacity challenge.

The solution, named TM04+, will make it a lot quicker for projects to connect to the UK grid and overcome delays when requesting network connections.  It will see us moving away from a ‘First-Come, First-Served’ approach to a model where projects that are ready to build with planning consent are no longer held back by delayed projects that are waiting in the queue ahead of them.

Now, a ready-to-build project might choose to connect, but it could then be at risk of curtailment later on. This currently means that zombie projects block the construction of better-quality projects that applied for a grid connection more recently. This new model will pave the way for more quality projects by moving things to a ‘Use it or lose it’ situation.

On top of TM04+, we now need to see more aggressive dispatch models and more investment in network assets that are suitable for distribution energy sources.

An increased understanding of co-locating energy storage with renewables

Government and network operators, and industry, are now well aware of the relative dispatch profiles of BESS and renewable generation, and the opportunity that co-location with storage can bring. Hopefully, policy will encourage further co-location.

Changes to BESS derating and Balancing Mechanism dispatch are also very welcome and positive. This is an acknowledgement that batteries have proven to be a more reliable source of capacity in the market.

Whilst I wouldn’t be so bold to say that every solar project should have co-located batteries, battery energy storage should be considered seriously in any new plans. As a key enabler of renewable-energy generation, energy storage can make a huge contribution to meeting net zero targets by balancing the intermittency of renewables and turning solar and wind into baseload generators.

The exclusion of lithium-ion from the LDES consultation

One negative move earlier this year in the industry was the exclusion of lithium-ion batteries from the ‘Long Duration Energy Storage (LDES)’ consultation. The consultation was designed to kickstart investment into the sector and the argument to exclude li-ion was that it is a technology already deployed which needs no further support.

But this argument misses the point that lithium-ion batteries have been demonstrated to be the lowest-cost, best-proven option for durations well in excess of the two-hour mark. I would like to see this reconsidered as part of the overall clean energy strategy.

To conclude, we need to see more acknowledgement of the benefits of energy storage on the road to net zero and I hope to see some firm policies surrounding this as the government’s plans take shape.

About Rob Moore

Rob leads the development of our utility-scale projects. Prior to joining the company, Rob spent six years developing solar sites.

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