The UK government is considering introducing a cap and floor support mechanism for the long-duration electricity storage (LLES) market.
It will also ensure the deployment of sufficient large-scale, to balance the overall system by developing appropriate policy to enable investment by 2024.
The government said in its response to a consultation on market barriers that it intends carry out further analysis on the costs and benefits of intervention in the market for LLES, including its contribution to energy security and possible market distortions.
It will also consider an optimised Capacity Market in addition to wider flexibility operational signal sharpening being considered under the Review of Electricity Market Arrangements (REMA).
The consultation found significant barriers to deployment under the current market framework due to their high upfront costs and a lack of forecastable revenue streams.
The government said in its response: “Considering these conclusions and as outlined in the British Energy Security Strategy, we will ensure the deployment of sufficient LLES to balance the overall system by developing appropriate policy to enable investment by 2024.”
The majority of respondents to the consultation agreed that LLES technologies face barriers to deployment, according to the government.
While most said that there is a need for government intervention to support these technologies, a few respondents did not see the need for LLES-specific support.
The government will now work with Ofgem to develop an appropriate policy to enable investment in LLES.
It said: “We anticipate further consultation with stakeholders on the design of a mechanism to enable investment in LLES and will set out further details in due course.”
Large-scale and long-duration electricity storage could provide an important role in decarbonising the UK energy system, for example by storing renewable power and discharging it over periods of low wind.