A coalition of battery storage developers, including Zenobē, Eelpower, Harmony Energy and Field, has penned a letter to the UK government and ESO ahead of its transformation to a National Energy System Operator (NESO).
According to the coalition, constraint skips are “holding back investment and driving up consumer bills”. It argues that the ESO consistently underuses—“skipping”—batteries in its efforts to handle energy oversupply.
Even when batteries are the cheapest and fastest way to meet the demands of the GB grid, the ESO favours other options: when there is too much wind power and the system is unable to transport it elsewhere, the most straightforward options are to turn off the turbines or store the excess in batteries. Often, the latter is cheaper as it avoids the ESO having to pay wind farm operators to switch off and potentially paying for gas-fired power plants in another area to turn on.
Data collected by the battery storage developers shows that some battery sites are skipped over during constrained periods 90% of the time. According to the letter, the consequences of this see “consumers paying more, clean renewable energy being wasted and fossil fuel generation used instead”.
In solving the issue of constraint skips, the coalition argues, the government will deliver lower consumer bills and give investors the confidence to invest in the UK energy transition.
In 2021, National Grid ESO’s Modelled Constraint Costs Network Options Assessment (NOA) 2020/21 paper suggested that constraint costs for consumers could hit £2.5 billion per year over the next decade.
Notably, the letter focuses on the potential for private investment that government legislation could open up. Zenobē founder James Basden said: “Solving this issue does not require major new investment or infrastructure. With more transparency and engagement with industry, we can fix this quickly. The Government has an opportunity to cut bills and emissions by ensuring that grid-scale batteries are being properly utilised and that the market is fit for purpose.
“As a coalition, we are ready to work together with the Government, the ESO and Ofgem to urgently fix this long-standing issue and reduce the consistently high levels of constraint skips we are seeing.”
Peter Kavanagh, CEO of Harmony Energy, added: “Urgent action on Balancing Mechanism skips is required if we are to deliver a sustainable future for Britain. If we get this right, we can unlock investment and deliver value for consumers right across the UK.”
In a guest blog for Current±, Field’s technical director, Chris Wickins, cited a grid capacity constraint across the Scotland-England border added £920 million of curtailment costs to consumers’ electricity bills. Transitioning to renewable energy sources alone will not solve this.
Legislation supporting battery energy storage
The government is making some moves to support energy storage in other areas. In July, the UK government published its response to the Capacity Market (CM) Phase 2 consultation and 2024 rule amendments to support auction liquidity. The proposals intended for implementation include the proposal to roll over a temporary amendment to enable mothballed plans to prequalify for the CM auction, and a proposal to support battery participation in the CM.
To support battery participation in the CM, government will introduce a definition of ‘Permitted Battery Augmentation’ for battery Storage CMUs within the CM Rules.
Recently, National Grid ESO implemented the first methodology update to de-rating factors in six years: It implemented Scaled Equivalent Firm Capacity (EFC) changes, revising the methodology for calculating de-rating factors for duration-limited storage technologies.
Solar Energy UK called on the government to set a target of 30GW of energy storage capacity by 2030; as outlined in the letter, failure to implement structured battery legislation to encourage the technology’s development threatens the energy bill reductions promised by the Labour party.
