Recommendation 16

The National Infrastructure Commission has recommended a strategic reserve of 25 TWh of electricity storage by 2040. Since the economic incentive is to cycle storage often, there is a concern over how to ensure commercially operated storage is available when it is needed most. Maintaining reserve storage will likely not be profitable even with a cap and floor subsidy. The Government has not made a clear commitment to developing a strategic reserve or explained whether it thinks green hydrogen or natural gas will fulfil that role. It has not explained how it will respond to generation shortfalls without a strategic reserve, or how it will replace the storage capacity provided by Rough.