Britain Remade Report - Salt Caverns Role Identified28 Mar 2023 10:18
Extract
Set a target for 25GW of long-duration
energy storage by 2035
Energy market arrangements and planning policy
are currently not set up to deliver sufficient levels
of energy storage for a majority renewables grid. To
unlock necessary reforms and provide investors with
certainty, the Department for Energy Security and Net
Zero (DESNZ) should set an Energy Systems Operator?backed target for 25GWs of long-duration energy
storage by 2035.
To meet the target, DESNZ should publish a new
National Policy Statement for long-duration energy
storage technologies. Due to the fact that many long?duration energy storage technologies such as hydrogen
can be geographically constrained, it is important that
the NPS designate a range of specific sites, such as salt
caverns, as appropriate.
Responding to the need to balance electricity supply
with demand is often a large part of the business case
for storage assets. Yet most balancing contracts in the
market do not last longer than 12 months, discouraging
investment in these novel technologies, given the need
to recover invested capital over many years. As a result,
under current energy market arrangements, many of the
wider benefits of longer-term storage are not reflected
in market prices. The Government should investigate a
Cap-and-Floor model and longer balancing contracts
to reform the energy market for long duration energy
storage technologies to de-risk investments in nascent
technologies through longer balancing contracts, a
level playing field with gas peakers, and contracts that
reward the wider benefits of storage beyond spot prices
such as meeting thermal constraints.
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