Long duration energy storage

Many energy sector professionals are grappling with how to navigate the evolving landscape of long-duration energy storage (LDES). This isn't just about understanding new technologies; it's about grasping the policy shifts and investment opportunities that will define the UK's energy future. Long-duration energy storage is rapidly emerging as a critical component for enhancing energy security, integrating renewable sources, and ultimately achieving net-zero targets. Recent developments, such as Ofgem's provisional selection of 16 LDES projects1, underscore the growing momentum and strategic importance of this sector.

Understanding the future of energy storage is key to a stable and affordable energy supply. Fuse Energy is committed to delivering abundant, clean energy, and developments in LDES are a vital part of that future. Discover how we're working towards a smarter energy system by clicking here.

The strategic imperative for UK long duration energy storage

The UK's ambitious clean energy targets and the imperative to bolster national energy resilience have placed long-duration energy storage firmly in the spotlight. LDES technologies are crucial for bridging the gap between intermittent renewable generation and consistent energy demand, ensuring a stable and reliable electricity supply over extended periods, from hours to days or even weeks.

Enhancing energy security and resilience

The volatility of global fossil fuel markets has starkly highlighted the need for greater energy independence. LDES plays a pivotal role by storing surplus clean energy generated from renewable sources, thereby reducing reliance on imported gas and insulating the economy from price shocks. This capability is essential for maintaining a secure supply, particularly during prolonged periods when wind or solar output is low.

Decarbonisation and renewable energy integration

The UK aims for at least 95% low-carbon electricity generation by 2030 and a fully decarbonised grid by 2035. The integration of variable renewable energy sources like wind and solar becomes paramount for achieving these goals. LDES technologies enable the grid to manage these fluctuations, storing excess power when generation is high and releasing it when needed. This prevents curtailment - where renewable generation is deliberately restricted due to grid limitations - and ensures that more clean energy can be effectively utilised.

Key long duration energy storage technologies in the UK

The UK's LDES landscape is characterised by a diverse range of technologies, each offering unique capabilities for storing and dispatching electricity over extended durations. Ofgem's provisional selections reflect this technological breadth, supporting a mix of established and emerging solutions.

Pumped hydro storage

Pumped hydro storage (PHS) is a mature and proven LDES technology. It involves pumping water from a lower reservoir to an upper one during periods of low demand or high renewable generation, then releasing it to drive turbines and generate electricity when demand is high. The UK currently has 2.8 GW of LDES capacity, predominantly from four existing pumped hydro sites. Energy Minister Michael Shanks noted the significance of new developments, stating, "Forty years after the country's last pumped storage facility, this government is getting Britain building again."

Compressed air energy storage

Compressed air energy storage (CAES) systems store energy by compressing air into underground caverns or tanks. When electricity is required, the compressed air is released, often heated, and expanded through a turbine to generate power. This technology offers the potential for large-scale, long-duration storage.

Advanced battery technologies

Beyond traditional short-duration batteries, advanced battery technologies are evolving to offer longer discharge capabilities. These include:

• Lithium-ion batteries: While often associated with shorter durations, advancements are pushing their capabilities towards longer storage periods, with some projects aiming for 8 hours or more.
• Vanadium redox flow batteries (VRFB): These batteries store energy in liquid electrolytes, allowing for independent scaling of power and energy capacity. They are well-suited for long-duration applications, offering minimal degradation over many cycles.

Ofgem's cap and floor scheme: driving investment

Recognising the significant upfront capital costs and investment risks associated with large-scale LDES projects, Ofgem has introduced a regulatory mechanism designed to provide revenue certainty.

Understanding the regulatory framework

The cap and floor scheme offers developers a guaranteed minimum income (the 'floor') while limiting excessive revenues (the 'cap'). This mechanism aims to de-risk investment in LDES assets, encouraging the deployment of critical infrastructure needed for a decarbonised grid. The scheme is technology-neutral, supporting a range of LDES solutions.

Provisional project selections and their impact

Ofgem has provisionally selected 16 long-duration electricity storage projects for support under its cap and floor scheme. These projects are geographically spread across Scotland, England, and Wales, ensuring a diverse portfolio that supports National Grid stability. The selected technologies include pumped storage hydro, compressed air energy storage, lithium-ion batteries, and vanadium redox flow batteries.

Akshay Kaul, director general for infrastructure at Ofgem, emphasised the strategic importance of these selections:

The regulator anticipates that this portfolio of projects will reduce overall system costs by easing pressure on transmission and distribution networks and minimising the need for costly new infrastructure or constraint management. Ofgem is currently seeking stakeholder views on these provisional decisions, with final determinations expected later this year.

Government policy and the future of UK energy

The UK government views LDES as a cornerstone of its broader energy strategy, essential for achieving both net-zero targets and enhanced energy resilience.

Aligning ldes with net-zero targets

The government's commitment to achieving clean power by 2030 and net-zero by 2050 necessitates a significant increase in flexible energy generation and storage. LDES technologies are pivotal in this mission, enabling the storage of abundant renewable energy for use when supply is scarce, thereby supporting the transition away from fossil fuels. The National Energy System Operator (NESO) estimates that a total of 11.5 to 15.3 GW of LDES will be required by 2050 to achieve net zero.

Infrastructure investment and grid modernisation

Widespread LDES deployment is expected to have a transformative impact on the UK's energy infrastructure. By providing flexibility and balancing capabilities, LDES reduces the need for expensive grid upgrades and helps manage network constraints. This strategic investment in storage is seen as a key enabler for a secure, cost-effective, and low-carbon energy system. Understanding your energy usage with a smart meter installation can also contribute to grid stability.

Impact on the UK energy grid and market dynamics

The deployment of LDES is set to reshape the UK's energy grid and market, bringing significant operational and economic benefits.

Easing pressure on transmission and distribution networks

LDES projects are strategically located to alleviate pressure on existing transmission and distribution networks. By storing energy closer to where it's generated or consumed, they can reduce congestion and minimise the need for costly new infrastructure. This distributed flexibility is vital as more intermittent renewables connect to the grid.

Reducing system costs and market volatility

The ability of LDES to balance supply and demand over long periods helps to reduce overall system costs. It minimises instances where expensive gas-fired power plants are needed to fill generation gaps and lessens the financial impact of renewable curtailment. By providing a buffer against fluctuations, LDES contributes to a more stable and predictable energy market, benefiting both households and businesses. For more on how market dynamics affect your bills, you might find our explanation of the energy price cap useful.

Unlocking an abundant energy future with ldes

The advancements in long-duration energy storage are not merely technical achievements; they represent a fundamental shift in how the UK can envision and deliver its energy future.

Investment opportunities and project development

The cap and floor scheme, coupled with the clear strategic need for LDES, creates significant investment opportunities within the UK energy sector. Developers and investors are now presented with a more certain revenue landscape, encouraging the progression of innovative projects across various technologies. The current pipeline of projects is beginning to address the need for LDES deployable near demand hubs, where grid congestion is highest.

The long-term vision for UK energy

Long-duration energy storage is a foundational technology for unlocking an abundant, clean energy future, aligning with Fuse's vision by enabling continuous supply from intermittent renewables. LDES is essential for re-engineering the UK grid to handle the vast amounts of clean energy needed, a goal that aligns with Fuse's ambition to deploy terawatt-hours of solar and storage. By stabilising the grid and ensuring reliable clean energy, LDES helps move towards a future where energy is no longer a constraint, aligning with Fuse's vision for greater societal and economic progress. This strategic, forward-looking perspective positions LDES as a critical enabler for a future where energy is no longer a limiting factor on ambition or progress.

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References

1. ReNews. Ofgem names long-duration support winners