How the public sector is powering up energy storage
Battery storage is rapidly becoming one of the public sector’s most powerful tools for cutting costs, strengthening energy security and supporting the shift to clean power, as Gareth Simkins, senior communications adviser at Solar Energy UK, explains
Storing electricity is critical for the energy transition, enabling power to be stockpiled when renewable supplies are plentiful and discharged when demand is greatest.
Falling costs are transforming the economics of storage
From Whitehall’s huge investments into gigawatt-scale systems, to more modest ones saving schools thousands of pounds a year, the public sector is benefitting from battery energy storage systems (BESS) technology at all scales. That is because the economics have never been better.
In early 2025, BloombergNEF found that global average turnkey system prices had fallen by 40 per cent in one year, the biggest drop since its surveys began in 2017. International Energy Agency data says that between 2010 and 2024, the dominant lithium-ion battery technology became 90 per cent cheaper, offering longer service lifetimes and higher energy densities, too – driving a revolution on the roads and on the grid. The technology delivers greater energy densities and longer lifetimes, too.
How storage supports a smarter, more flexible grid
BESS offers a way of cutting the costs of managing the grid. By providing flexible loads, they can reduce curtailment – that is, when renewable energy generators are paid not to generate as the grid cannot accept the power. They can also avoid the need for new electricity transmission and distribution links.
By providing a flexible load on the grid, storage systems reduce curtailment costs – that is, payments to renewable energy generators prevented from generating when the grid is unable to take the power produced. In parallel, co-locating BESS and solar panels allows limits on power export, put in place where the grid is weak, to be overcome, permitting larger systems to be installed.
National Wealth Fund backing accelerates large‑scale projects
Sensing an excellent opportunity, the National Wealth Fund (NWF) has been particularly active in stimulating the sector’s growth when portfolio-level debt for it was still emerging. The fund’s first investment in battery storage was a £62.5m loan to developer Pulse Clean Energy – a time when portfolio level debt for the sector was still rare. Agreed in 2023, it was paid off two years later thanks to a lower-interest loan from a consortium of six banks.
“This wasn’t only a major milestone for Pulse Clean Energy, but also for the NWF. We step away with the confidence that our involvement has successfully mobilised private debt finance into the sector, opening up new pools of capital for battery storage developers and operators,” said a statement from the body.
In September, the NWF invested £200m into a Fidra Energy, which is behind a 500-megawatt, 100-megawatt-hour battery energy storage system (BESS) at West Burton, Nottinghamshire – using the grid connection of the decommissioned coal-fired power station there. The project will be able to store 3,100 megawatts-hours – more than any other UK project and enough to make 443bn cups of tea. It will discharge at a rate of up to 1,400 megawatts, slightly more than one of the UK’s nuclear power stations.
“It’s fantastic to see the National Wealth Fund breathing new life into a former coal site — turning it into a cutting-edge battery hub that will power thousands of British homes and businesses with clean energy from wind and solar. Every battery we build boosts Britain’s energy security, reduces our exposure to fossil fuel price shocks and drives us towards clean power by 2030 - all part of our Plan for Change,” said energy secretary Ed Miliband.
NWF’s further investments in energy storage, as shares and debt, include: highview Enterprises, behind CryoBattery One, the world’s first commercial-scale liquefied air energy storage system. It aims to provide a more flexible and scalable alternative to pumped hydropower storage, while able to provide grid services such as frequency and voltage support, inertia and black start capability.
NWF is contributing £200m towards the £500m partnership behind UK BESS developer Eelpower Energy.
NWF has invested in Invinity Energy Systems, a UK-based manufacturer of vanadium flow batteries, which have a number of technical advantages over lithium-ion systems and have a lower levelised cost, though at the cost of greater weight.
NWF has also invested in Cornish Lithium, which is working on the commercial-scale extraction of the metal from rock and geothermal waters, providing an important domestic supply for battery manufacturers. The £24m equity investment will advance a geothermal extraction project to commercial drilling and a hard rock mine towards a construction decision.
The former Department of Business, Energy and Industrial Strategy also provided many millions of pounds towards innovation, pilot-scale and demonstrator projects in BESS technology.
The scale of the challenge ahead
As things stand, the UK can supply almost 6 gigawatts from grid-scale BESS. The figure needs to rise quickly to 23-27GW to meet the Government’s Clean Power 2030 Action Plan, which calls for an additional 4-6GW from long-duration storage systems, plus 10-12GW from so-called ‘consumer-led flexibility’, such as turning heat pumps and electric vehicle charging off or on temporarily.
Another aspect of BESS is ‘behind the meter’ systems – far smaller than grid-scale systems, which are generally packed into shipping containers. A typical domestic battery system stores around 10-15 kilowatt-hours in a unit about half the volume of a household fridge. These are now installed alongside the vast majority of home solar systems, maximising their economic return.
When the days are longer and brighter, they collect excess power that would otherwise be exported to the grid at the time of generation. However, combining a time-of-use tariff with a battery allows power to be exported when it’s most in demand – the early evening – which can attract a greater payment and thus a better return on investment.
But one of the greatest advantages of behind-the-meter battery storage is making electricity cheaper in the dark days of winter. When solar power is insufficient to charge them fully over the course of a day, they can be charged from the grid in the small hours when the price is lowest, supplying cheap power all day and exporting some in the evening.
Why public buildings are embracing battery storage
An increasing number of public buildings are getting on board with energy storage – with payback for 100-kilowatt scale systems expected within three to four years, according to one developer. The business case is clear: a 100kW BESS in a leisure centre is expected to cut its electricity bill by hefty 27 per cent, with one in a primary school projected to generate a 23 per cent saving, according to VEST Energy.
Rooftop solar developer Emtec supported Sunderland City Council’s aspiration to become carbon neutral by 2040 by installing over a thousand solar panels on its Parson’s Depot EV fleet hub. The 410kW array was complemented by a BESS able to supply 500kW and store 2,052kWh. When installed in 2022, it was assumed that the solar-only payback would be a mere three years, plus four for the battery. But it transpired that the battery’s payback was faster than the solar array.
Local authorities leading by example
Local authorities are also using their land for grid-scale energy storage, such as at a disused landfill owned by West Sussex County Council. Seeing no alternative use due to the presence of methane gas, the site was first converted into a 7.4MW solar farm – the first to be built after the end of the feed-in tariff regime. Working with public sector energy consultancy LASER Energy, they then added a 4MW/4MWh battery system from TESVOLT, becoming the first publicly-owned solar farm to be co-located with BESS.
Not only did it respond within two seconds of the sudden loss of nearly 1,700MW of generation on 9 August 2019, linked to a lightning strike on an electricity transmission line, it was also one of the first batteries to participate in the National Grid’s ‘Firm Frequency Response’ auction to provide stability services to the power network, at the beginning of 2020. Further sources of income include the Capacity Market, price arbitrage and sale of power via a purchase agreement.
“As one of the first solar farms to be built with battery storage and free from government subsidy, we are blazing a trail among local authorities and demonstrating that councils have a role to play as local leaders on energy,” said Louise Goldsmith, former Leader of West Sussex County Council.
It is now working on a four times larger BESS on another decommissioned landfill, expected to come online in 2026.
