UK BATTERIES GLOBAL INFRASTRUCTURE
Planning restrictions removed Another significant obstacle to the development of large battery storage projects was removed in early December 2020 . Legislation was enforced to exempt electricity storage , excluding pumped hydro , from the nationally significant infrastructure project regime . The NSIP regime is a separate planning regime aimed at large infrastructure projects – and requires a pre-consultation , submission and examination process with the Secretary of State in order for a project to be given a development consent order . This can take up to 13 months following a consultation and pre-application period and is a time and labour intensive process .
Before December 2020 , this process under the NSIP regime was required for planning permission for battery storage projects with a capacity in excess of 50MW despite the relatively low planning impacts of such projects . It was for this reason ( along with certain licensing exemptions ) that many of the largest UK battery storage projects in development during the last few years have squeaked in at 49.5MW . Tellingly , in December 2019 , one quarter of all battery projects in the UK were sized between 49MW and 50MW .
So this clustering and the market soundings were persuasive indicators that this NSIP capacity threshold was distorting sizing and investment decisions . The related BEIS consultation on the matter also acknowledged the low planning impact of these projects , noting that the footprint of a 50MW lithium-ion battery storage plant will likely be approximately 1 hectare , compared with in excess of 100 hectares for a 50MW solar or wind farm .
The removal of this de facto cap through the disapplication of the onerous NSIP regime has , of course , opened up extended capacity potential – and , perhaps by no coincidence , there has been a recent increase in planning applications for larger battery storage projects .
Storage charges reduced Ofgem has delivered a reduction of certain charges that have distorted the competitiveness of the energy storage market . These mainly relate to erasing double-charging for importing and exporting electricity , and withdrawing final consumer charges – together forming a welcome revision which the industry has been anticipating .
It was confirmed in May 2020 that the doublecharging balancing costs that has disadvantaged storage providers is now to be removed . This is the result of consultations following market submissions from 2017 .
The National Grid recovers system balancing costs from generators and demand customers based on the volumes of energy imported or exported to the grid every half hour . This is levied through the Balancing Service Use of System ( BSUoS ) charge . Battery storage projects both import energy from the grid , store it and then export energy back to the demand customer . Unlike with other generators , the current charging system can result in battery storage providers paying BSUoS on both the amount of energy they import and the amount they export .
Given that this double-charging does not apply to other generators , it is not surprising that Ofgem considered this placed storage providers at a competitive disadvantage . It was also noted that the BSUoS charge is intended to recover balancing costs and , given the system support role of battery storage , the balancing costs they impose on the system will likely be significantly less than other users .
Ofgem therefore confirmed that , effective from April 1 2021 , eligible storage facilities will be exempt from the BSUoS charges on their imported electricity volumes and will only be charged for their exports .
The timing of this relief is all the more important when considered in the context of the recent increase in the BSUoS costs . The combination of increased integration into the network of numerous renewables
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22 Project Finance International Global Energy Report April 2021