London (UK) October 10: The UK government has unveiled a new funding initiative aimed at developers of long-duration renewable energy storage projects. This scheme, designed to provide stable returns, is expected to significantly increase investment in technologies like pumped hydro, which store surplus energy from renewable sources, bolstering the nation’s energy security.
Developers of storage solutions, including technologies such as liquid air and compressed air energy storage, will be able to apply for “cap and floor” contracts. These contracts offer a guaranteed minimum income, ensuring developers have a stable revenue stream, while also capping excessive profits. Energy Minister Michael Shanks emphasized the importance of such projects, stating they help reduce dependency on fossil fuels by storing excess clean energy for future use.
Pumped hydro systems, which pump water to higher reservoirs and release it to generate electricity when demand spikes, play a pivotal role in balancing the power grid. This technology, alongside other storage solutions, ensures that the energy generated by wind and solar power can be stored for periods when the weather conditions aren’t optimal.
The first round of applications for these long-duration energy storage contracts is set to open next year, with Britain’s energy regulator, Ofgem, taking the lead in designing the framework. The initiative is part of the UK’s broader strategy to decarbonize its power sector by 2030, a target that will require substantial growth in renewable energy sources and storage capacity.
The government has already used a similar funding model for interconnector projects, which link Britain’s power grid to other countries. By implementing this approach for energy storage, the UK hopes to accelerate its shift toward a more sustainable, resilient energy system.