UK energy industry regulator Ofgem said it is minded to approve the introduction of a financial commitment for BESS in an attempt to reduce the oversupply of the projects awaiting a grid connection.
There is about 90GW of battery energy storage (BESS) capacity either operational or in the reformed connections queue, almost three times the 29GW that the government is targeting as part of its Clean Power 2030 target.
The Oversubscribed Technologies Commitment Fee (OTCF) would require projects to demonstrate a minimum level of financial commitment starting at £3,000 per MW and rising to a maximum £25,000 per MW if the queue remains significantly oversubscribed.
Ofgem said that while battery storage has a “vital role” to play in a clean energy system, the scale of the queue “makes it difficult to know which projects are genuinely likely to be built”. This was the issue with the broader grid connection queue before it was reformed to follow a ‘first ready, first connected’ process.
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Despite cutting 153GW of BESS projects from the immediate queue, protections for projects that had already progressed to a certain stage of development meant that the front end of the queue did not change at all for BESS.
Ofgem’s intervention follows a warning from the Department of Energy Security and Net Zero (DESNZ) and Ofgem about the oversupply. A joint letter signed by energy minister Michael Shanks and Akshay Kaul, director general for infrastructure at Ofgem, said the effect of those protections, combined with the relative speed at which the technology can move through the planning process, has resulted in a “materially higher level of battery progression to Gate 2 than anticipated”.
This is an extract of an article originally posted on our sister site Solar Power Portal: see the full original version here.
