Interest in battery storage for electricity has seen a period of high activity as developers have sought to secure option agreements over those properties that are near a grid connection point.

Battery energy storage system (BESS) are held out as the solution to renewable energy’s intermittency problem – you cannot produce electricity from wind turbines in calm weather or from PV when the sun doesn’t shine. But as technology improves, BESS also serves an increasingly valuable function in grid stability – balancing energy supply and demand.

However, the battery market is currently going through a period of flux, caused to a large extent by the ongoing grid reform process, bringing into sharp focus the viability of a number of BESS schemes.

At this stage we know that across Britain there is a fivefold over-provision of potential BESS schemes in the pipeline to meet the requirements of the grid. Many of these are bound to fall by the wayside as part of a grid reform process aimed at weeding out projects unsuitable or unprepared for a grid connection.

Grid modernisation continues to be hampered by delays in connecting new projects to the network, caused by factors such as outdated infrastructure, ‘zombie’ schemes, a backlog of renewable energy projects and challenges in securing permits and approvals for grid upgrades and expansions.

Uncertainty

To maintain their position in the grid queue and eventually receive a connection offer, developers must now provide demonstrable progress in meeting the requirements of the National Energy System Operator NESO, which oversees the energy electricity and gas network and is charged with accelerating the energy transition.

We have seen a number of BESS developers seeking to repurpose their hard-won grid connection offer for a battery scheme, to service a data centre instead, anticipating an expected rise I demand for such centres to facilitate the growth of AI as reported earlier. 

Looking ahead over the next few months, we can see that there will be uncertainty on existing exclusivity and options for battery schemes that may fail as a result of the reform process, and uncertainty too in the wider battery market.

Insofar as landowners are concerned, we would recommend that they continue to liaise with their agents and ask direct questions of the developer or promoter pf the likelihood of the scheme progressing.