In an effort to accelerate the deployment of long duration electricity storage and fortify its role in decarbonizing the energy system, the Department for Energy Security and Net Zero has unveiled a consultation on the policy framework to facilitate investment. Published on January 9, 2024, the consultation is scheduled to conclude at 11:59 pm on March 5, 2024.

Recognizing the pivotal contribution of long duration electricity storage, particularly in storing renewable power and discharging it during periods of low wind, the government aims to address existing investment challenges within current energy market frameworks. These challenges have impeded the widespread deployment of long duration electricity storage at scale, as evidenced by industry analysis.

The proposed solution, outlined in the consultation, is the development of a cap and floor mechanism designed to overcome identified investment barriers. The consultation invites input on various aspects of this approach, including eligibility criteria for assessing applications, the design of the cap and floor mechanism, and the proposed options for delivering the scheme.

Stakeholders invited to respond include long duration storage project developers, investors, electricity suppliers, network operators, relevant technology companies, and consumer groups. The government has complemented the consultation with the release of a study on scenario deployment analysis for long-duration electricity storage, providing valuable context and insights for stakeholders engaging with the consultation process.

In a positive response to the news, Drax, a key player in the renewable energy sector, expressed its approval.

Currently progressing plans to expand its Cruachan pumped storage facility in Scotland, Drax aims to construct a new 600MW plant adjacent to the existing underground installation. This addition would effectively more than double the site's total generation capacity to over 1GW.

Having received development consent from the Scottish Government in July 2023, Drax's expansion initiative was endorsed by Scotland's First Minister, Humza Yousaf, during a visit to Cruachan last year. Yousaf emphasized that the expansion would "strengthen our energy security by providing much-needed resilience in the system" and serve as "a real boost to the Scottish economy."

Despite the critical role of pumped storage hydro plants in decarbonization, the absence of a suitable investment framework has made it challenging to attract private investment. The UK has not seen the construction of such plants since 1984.

Ian Kinnaird, Drax's Scottish Assets Director, highlighted the significance of the recent developments, stating: "This is a significant stride toward realizing a new generation of pumped storage hydro plants. These plants would enhance UK national energy security and play a vital role in the fight against climate change."

Expressing readiness to collaborate with the UK Government and other stakeholders, Kinnaird emphasized Drax's commitment to delivering a policy environment that attracts investment, strengthens energy security, and benefits consumers. Drax's ambitious plans for Cruachan have the potential to create and support nearly 1,000 jobs during the construction phase.

Cruachan project in Scotland