Investment support scheme will unlock billions in funding for critical projects and make UK Government's 2030 net zero grid targets possible
Highview Power, a leading provider of long-duration energy storage (LDES) technology, announced today that its plans to develop four new 2.5GWh power plants in the UK by 2030, have taken a crucial step forward following the launch of the Department for Energy Security and Net Zero's (DESNZ's) new investment support scheme. The scheme will use a "cap and floor" mechanism which will unlock the next stage of investment in the multi-billion-pound LDES programme, enabling the technologies vast potential to underpin UK decarbonisation.
Two of the 2.5GWh plants will deliver more storage than all of the UK's existing battery storage, using 100% sustainable technology, with a 40-year lifespan. The addition of these four plants by 2030 means the government's target to achieve a net zero grid by 2030 is achievable. Two of the 2.5GWh plants will be in Scotland and the other two in England. The first new plant will be located in Hunterston, Scotland.
"Highview Power is an example of how the UK government's investment support scheme enables the country's future energy security and economic growth. This funding will unlock 10 GWh of storage capacity, delivering over 10% of the UK's targets for non-battery storage," said Richard Butland, CEO of Highview Power. "Our technology will be one of the first to benefit from the scheme, powering the UK to meet its 2030 targets."
It is groundbreaking projects like this that will help to scale up the UK's renewable energy powering homes with cheaper homegrown renewables, even when the wind isn't blowing and the sun isn't shining," said Michael Shanks MP, Minister for Energy, DESNZ. Just this week we announced a new scheme to unlock billions of investments in innovative long duration energy storage technologies, and this is already giving businesses the confidence to invest in Britain creating jobs while boosting our energy security."
"Long Duration Energy Storage is vital to achieving the UK's net zero ambitions and our partners at Highview Power are leading the way with their pioneering technology which will underpin the country's ability to unlock net zero, while also supporting Centrica's stated aim of increasing our exposure to assets with regulated and contracted earnings streams," said Chris O'Shea, Group Chief Executive, Centrica. "The UK is fortunate to have a range of low carbon storage options and the good news is that this cap and floor model can easily be utilised for other energy storage technologies too. Storage is an essential part of the solution when looking at how we manage peaks in demand and store the abundance of renewable energy generated across the UK."
Julian Leslie, Director of Strategic Energy Planning and Chief Engineer, NESO, added: "Our Future Energy Scenarios (FES) report, in the Holistic Transition Pathway, shows that by 2030 we require up to 81GWh of LDES, this announcement paves the way to realise this goal."
The announcement follows Highview Power's successful £300 million capital raise for the development of its 300MWh energy storage and grid stability facility at Carrington, Manchester, which will be operational in 2026. The 2.5GW facility represents an 8-fold increase in storage on the Carrington plant; together all five of these UK commercial-scale plants will deliver over 10% of the NESO's 2024 Future Energy Scenarios (FES) Holistic Transition Pathway targets of up to 81GWh of LDES by 2030.
Each 2.5GWh liquid air energy storage (LAES) plant will have the ability to power 650,000 homes for over 12.5 hours. The plants are strategically placed to ensure the balance of supply and demand and reduce energy curtailment, making the most efficient use of the existing grid transmission system.
Highview Power's June funding round was led by the UK Infrastructure Bank (UKIB) and the British multinational energy and services company Centrica, alongside a syndicate of investors including Sumitomo, Rio Tinto, Goldman Sachs, KIRKBI and Mosaic Capital.
About Highview Power
Highview Power has developed its LAES technology in the UK over the last 17 years. The technology can store renewable energy for up to several weeks, longer than battery technologies, and is ready to be deployed across key grid locations at scale today. Highview Power's technology will also provide stability services to the National Grid, which will allow for the long-term replacement of fossil fuel-based power plants for system support. By capturing and storing excess renewable energy, which is now the cheapest form of electricity, storage can help keep energy costs from spiralling, and power Britain's homes with 24/7 renewable clean energy. For more information, please go to: https://highviewpower.com/.
Notes to Editors
Investment value to UK economy
The UK Government has recognised the need for system flexibility solutions, which is why the UK will implement a "cap and floor" scheme which provides revenue support to developers should their gross annual margin (the difference between the revenues from selling electricity back to the grid, and the cost of charging) fall below a set threshold known as the "floor." In return for consumers underwriting this risk, a revenue cap ensures that LDES asset owners must share some or all profits above a certain level.
This investment support scheme will allow Highview Power to develop its first four large scale assets delivering a £3bn investment by 2030. This will attract pensions and similar funds, seeking higher returns from both senior debt and equity, with the comfort of sovereign backing, which in turn will create the bedrock for attractive equity returns.
Delivering a net zero grid
By 2030, the UK will have 131GW of renewable electricity generation from solar, onshore and offshore wind and other sources, with national peak demand at 55GW. This will be sufficient for the UK to achieve its aim of a zero-carbon grid. Due to the lack of energy storage and grid stability assets in the UK, the 2030 aim will not be achieved without the commissioning of energy storage assets and assets to support the operation of the grid. NESO's 2024 FES scenario, in its Holistic Transition Pathway, has targeted 81GWh of non-battery storage (c.£25bn of new investment) and 49GWh of batteries (c.£8bn of investment).
View source version on businesswire.com: https://www.businesswire.com/news/home/20241015423061/en/
Contacts:
Media Contacts:
Highview Power: media@highviewpower.com
UK: +44.203.617.1930
US: +1.512.215.4425
Julie Kirby
Mercom Communications
Julie@mercomcapital.com
+44 (0)7956 955625
