Source · Select Committees · Environmental Audit Committee
Recommendation 5
5
Accepted
Paragraph: 44
Long-term low carbon energy storage development faces significant market and policy barriers.
Conclusion
While short-term energy storage has some market drivers, the development of long-term, inter-seasonal storage at the scale expected to be required faces market, policy and regulatory barriers. The UK economy will require a significant level of low carbon energy storage of this type in order to achieve the Government’s net zero energy goals while maintaining energy security and avoiding energy shortfalls.
Government response summary AI-generated
The government notes the importance of Market-wide Half-Hourly Settlement (MHHS) for demand-side response and provides a detailed update on its implementation. Ofgem has approved a delay to MHHS completion until July-December 2027, outlining actions to mitigate further risks.
Summary of the government's response below — read the verbatim text to verify.
Paragraph Reference:
44
Government Response
Accepted
HM Government · verbatim extract
Accepted
Government agrees with the importance of long-duration energy storage as a key enabler to a secure, cost-effective and low carbon energy system. Long duration energy storage, for example electricity or hydrogen storage, can help to decarbonise the system by storing excess renewable generation over longer periods of time. This will allow us to replace fossil-fuelled generation with renewable power without losing flexibility from the grid. Long duration electricity storage (LDES) will save consumers money, as it minimises the amount of additional generation and network capacity needed. System modelling estimates savings for the energy system, and ultimately the energy consumer, of £24 billion by 2050 in one scenario1. On 10 October 2024 the Government published its decision to introduce a cap and floor scheme for LDES, with Ofgem as regulator and delivery body. Future procurement ambitions for this scheme will be provided ahead of the first application round, which is expected in 2025. NESO’s Clean Power 2030 analysis contains scenarios for future storage deployment (both LDES and batteries). We will continue to work with NESO to develop projections of future system need, e.g. in preparation for next steps on delivery of the LDES cap and floor scheme. Low-carbon hydrogen can also act as a flexible generating technology and provide long duration energy storage, making use of curtailed electricity. We are committed to designing, by 2025, a new business model for hydrogen storage infrastructure and how best to enable private sector investment and remove market barriers. The Energy Act 2023 provides the legislative framework that will underpin the delivery of the hydrogen transport and storage business models.
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