Ministers hope that move to cut red tape and streamline planning processes could help treble UK energy storage capacity
Energy storage developers are poised for a significant boost today, with the news the government is to pass secondary legislation that would relax planning rules for the fast-expanding sector.
The UK boasts a sizeable and growing pipeline of energy storage projects, as developers rush to deploy battery systems and other technologies that can help provide balancing services for a grid that is increasingly reliant on variable renewables.
An analysis late last year from trade body RenewableUK showed that the cumulative capacity of planning applications for battery storage projects had increased more than 50 per cent in 2019, from nearly 6,900MW to over 10,500MW at the end of the year.
However, the sector has also warned that its development is being hampered by complex rules governing markets for flexible grid services and onerous planning requirements whereby large scale projects are managed through the national planning system.
The government will today move to address these concerns, using secondary legislation to allow large-scale battery developers to apply for permission to build energy storage projects using more streamlined local planning rules.
The changes should reduce development costs for projects with more than 50MW of capacity, providing a further boost to the expanding market.
Kwasi Kwarteng, minister for energy and clean growth, said the move would bolster the government's efforts to build a clean energy systems for the UK. "The key to capturing the full value of renewables is in ensuring homes and businesses can still be powered by green energy even when the sun is not shining, or the wind has stopped blowing," he said. "Removing barriers in the planning system will help us build bigger and more powerful batteries, creating more green-collar jobs and a smarter electricity network."
The move was also welcomed by Kayte O'Neill, head of markets at National Grid ESO, who said the expansion of the energy storage sector should help curb bills for households for businesses. "How we operate Great Britain's grid is changing, with record levels of renewable sources generating our power," she said. "Storage can help us make the most of this green energy, using it to manage peaks and troughs in demand and operate the electricity system as efficiently as possible - keeping costs down for consumers too."
Frank Gordon, head of policy at trade body the REA, said the welcome changes would "support the UK's position as a world leader in energy storage technologies".
"The previous cap was largely arbitrary and skewed the market," he said. "As energy storage built alongside new renewables projects is crucial to unlocking subsidy-free deployment, the old system acted as major barrier to achieving our Net Zero target and building low-cost generation sites."
The news comes on the same day as the Department for Business, Energy and Industrial Strategy released a letter from Kwarteng to National Grid ESO setting out the parameters for the Capacity Market Auction round planned for early 2021, which will provide contracts to back up generators, energy storage operators, and other flexible grid services that can guarantee capacity for the grid.
The letter confirms the parameters for the next Capacity Market T-1 auction planned for January 2021, which will award contracts for winter 2021/22, and the longer term T-4 auction planned for February 2021, which will award contracts for 2024/25.
"These include a total target capacity of 41.6GW for that delivery year of which I am setting aside 0.4GW for the T-1 auction, leaving a target capacity of 41.2GW to be auctioned in the T-4 auction," Kwarteng confirmed, adding that the decision was consistent with recommendations from the government's Panel of Technical Experts (PTE).
However, he added that the recommendations do not take account of any potential impacts form the COVID-19 pandemic and as such the government welcomes plans from National Grid ESO to "review the demand and supply assumptions in light of the pandemic".
"This will inform any recommendations for potential adjustments in autumn to the demand curve and Secretary of State considerations for parameters adjustment," Kwarteng said.