The REA has called for a new market mechanism to unlock investment in more longer-duration energy storage technologies. It forecasts that the UK will need at least 30GW of these technologies by 2050, which it claims is currently not possible with the present market and regulations.
The report reveals that a regulated asset base model could be the best way to shift the market to meet needs. This is normally used to incentivise private investment into public projects by providing a secure payback and return on investment for developers. Using this model would mean that energy companies manage the infrastructure, owning the assets and operating costs.
Although the REA welcomes the government’s new announcement of a £68 million demonstration competition in energy storage projects, it warns that it will not resolve the barriers to deployment, including the short length of contracts for capital projects.
Frank Gordon, Director of Policy at the REA, commented: “Longer-duration energy storage will be vital to supporting our grid through the energy transition in the drive to net zero. However, as our report shows, we are a long way from meeting our targets on current trends.
“While I welcome the government’s announcement of a £68m demonstration competition for first of a kind energy storage projects, this will not resolve the barriers to deployment that affect all longer-duration energy storage technologies.
“We will work with the BEIS to push for change in this area and hope they respond by issuing a Call for Evidence alongside the Smart Systems & Flexibility Plan update.”