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Britain sets out funding model for renewable energy storage projects
- 4 days ago (2024-10-11)
- David Flin
Michael Shanks, Britain’s Energy Minister, has said that developers of renewable energy storage projects, such as pumped hydro, will be offered a guaranteed minimum income to spur investment in technologies that help the country meet its climate targets.
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Britain is aiming to decarbonise its power sector by 2030. Meeting this target will require a large increase in renewable energy, such as wind and solar, as well as projects that store energy when there is insufficient wind or sun. Shanks said: “With these projects storing the surplus clean, homegrown energy produced from renewable sources, we can boost our energy security by relying less on fossil fuels.”
Under the scheme, developers of long duration energy storage projects can apply for ‘cap and floor’ contracts that provide a guaranteed minimum income in return for a limit on revenues. A similar scheme is already used to help pay for interconnector power links with other countries.
Companies developing new hydropower projects including SSE , Drax , and Statkraft welcomed the move. Drax plans to expand its existing Cruachan pumped storage facility in Scotland with a new 600 MW plant while SSE is planning a £1.5 billion hydropower project, also in Scotland.
The government said that Britain’s energy regulator Ofgem will design the scheme, with the first round to be open for applicants next year.