London — Britain will offer developers of renewable energy storage projects, such as pumped hydro, a guaranteed minimum income to spur investment in technologies that help the country meet its climate targets.
Britain is aiming to decarbonise its power sector by 2030. Meeting this target will require a large increase in renewable energy, such as wind and solar, as well as projects that store energy when there is insufficient wind or sun.
“With these projects storing the surplus clean, homegrown energy produced from renewable sources, we can boost our energy security by relying less on fossil fuels,” Energy Minister, Michael Shanks said in a statement.
Under the scheme, developers of long duration energy storage projects can apply for “cap and floor” contracts that provide a guaranteed minimum income in return for a limit on revenues.
A similar scheme is already used to help pay for interconnector power links with other countries.
Developers of the technology say it can help to even out the fluctuating amount of renewable electricity on the power grid.
Companies developing new hydro projects including SSE, Drax and Statkraft welcomed the move.
Drax plans to expand its existing Cruachan pumped storage facility in Scotland with a new 600 megawatt plant while SSE is planning a 1.5 billion pounds ($1.96 billion) hydro project also in Scotland.
“Today’s announcement is a critical step forward to removing one of the key hurdles developers face in building a new generation of pumped storage hydro plants,” said Ian Kinnaird, Drax’s Scottish Assets Director.
Other long duration energy storage technologies include liquid air energy storage, compressed air energy storage and flow batteries.
Britain’s energy regulator Ofgem will design the scheme with the first round to be open for applicants next year, the government said.
($1 = 0.7651 pounds)
*Susanna Twidale, editing: Christina Fincher – Reuters
