Ernst & Young’s (EY) 63rd edition of the Renewable Energy Country Attractiveness Index (RECAI) ranks the UK battery energy storage system (BESS) market third globally.
The RECAI is a biannual report that ranks countries by how attractive their renewables sector is for investment. The report places the UK sixth, a step up that is partly attributed to increased government funding for the Contracts for Difference (CfD) scheme, which received over £1 billion in the most recent auction round (AR6).
AR6 has £800 million earmarked for offshore wind; the UK RECAI score for offshore wind technology was 59.5, the second highest globally after the US.
The index rankings reflect EY’s assessment of the factors driving market attractiveness, including whether the market is actively seeking to reduce reliance on fossil fuels and whether essential components, such as long-term contracts, grid infrastructure (including storage) and finance availability, are in place to ensure project delivery.
EY’s report notes that globally, network gridlock has reached acute proportions in mature markets. The UK’s grid connection queue is currently over 700GW, with most projects to connect after 2030.
Increased investment in BESS
According to EY, growing electrification and the proliferation of renewables will mount challenges to grid management, as well as system adequacy and price volatility. BESS can form part of the solution and investment in the technology is increasing.
The battery energy storage pipeline in the UK has reached 95GW, up 67% from last year. Its battery storage capacity is projected to expand to 24GW by 2030, with upgrades to the National Grid ESO’s Open Balancing Platform (OBP) supporting bulk dispatch of battery storage in real-time.
According to ESO data, approximately half of the battery unit dispatch volume is now being instructed through the OBP.
Further, BESS has been classed as a generation asset in a new energy bill, easing rules around construction and offering specific tariff structures. The UK’s sophisticated energy market design includes a well-established and diverse revenue stack for BESS, and the UK government is committing £20 billion to establishing a world-leading battery industry by 2030.
