Currently, the UK grid faces significant challenges driven by macro changes:

  • Large scale Coal & Nuclear plants are starting to be decommissioned: The market expects the closure of fossil generation and nuclear powerplants in the short-term, and

  • A commitment to increase renewables generation: For example, during the Conference of the Parties (COP)26 held in Glasgow in 2021, countries stressed the urgency of action to reduce carbon dioxide emissions by 45 per cent. to achieve net zero around the mid-century. Countries have been called to present stronger national action plans and have agreed to a provision for phasing-down coal power and phasing-out inefficient fossil fuel subsidies, therefore moving away from fossil fuels.

Renewable energy sources are intermittent and increase the difficulties in balancing demand/supply of electricity.

Battery storage systems can therefore help to maintain the stability of the grid. Among other services they enable excess energy in the system to be stored at times of over production and release this energy when grid capacity is constrained.

There are multiple revenue streams for energy storage projects which may be stacked on a single battery, available for Grid Balancing, Peak Shifting and Trading, such as Dynamic Containment, Capacity Markets and Wholesale Market Arbitrage. In addition, the fund is consistently evaluating new and prospective revenue opportunities.

The combination of strong market drivers plus the rapidly reducing cost of battery technology, means that Gore Street Capital believes that there are significant prospects for the roll-out of battery storage systems. National Grid’s 2021 energy scenario modelling forecasts 13 GW of new electricity storage in 2030 to help balance periods of high and low renewable output.