Energy Storage in the Booming British Market

Authored by Jack Peck, Head of Sales, Wattstor

What steps can UK businesses take to fully unlock the value of their renewable energy investments? Let’s explore how energy storage is shaping opportunities in the UK market.

The UK has been at the forefront of the renewable energy transition, with significant investments in onshore and offshore wind, solar and other renewable sources. However, the increasing share of renewables in the UK’s energy mix presents a challenge for the grid operator and an opportunity for battery storage and flexibility to step up.

In this guide to the booming energy storage market in Great Britain, I’ll be answering some of the pertinent questions that explain this in more detail.

What makes the UK an interesting country for renewable energy projects?

The UK offers a unique combination of volatile wholesale electricity prices, great natural resources for solar and wind generation, and innovative market access for customers with flexible assets. Providing businesses with a unique opportunity to produce their own electricity on site, access cheaper grid power when renewables are abundant and generate additional value by trading their flexibility in the market.

What is driving the current demand in the UK? 

There are drivers both from the government in terms of their ambitious net zero targets and also the private sector with businesses looking for alternatives to expensive grid electricity. The government’s commitment to achieving a decarbonised grid by 2035 has led to increasing pressure to expand renewable energy deployment in the UK, whilst incentivising businesses to reduce their scope 1, 2 and 3 carbon emissions.

Additionally, the UK has some of the highest cost electricity in Europe and businesses are being forced to seek cheaper alternatives to traditional fossil fuels to remain competitive. This is where renewables have come to the fore, with the marginal cost of solar and wind power now below that of fossil fuels, the renewable option is now not only better for the environment but also more cost effective.

What triggered the fast growth of renewables in the UK?

Several factors have contributed to the rapid expansion of renewable energy in the UK:

Government policies and incentives
The UK government’s implementation of the Contracts for Difference (CfD) scheme has been instrumental in providing financial stability for renewable energy projects. CfDs incentivise investment in renewable energy by offering developers a fixed price for electricity, protecting them from volatile wholesale prices and encouraging development.

• UK’s natural resources
  As an island nation with over 7,000 miles of coastline, the UK has some of the best natural wind resources in Europe. Making it an attractive market for asset owners and developers and increasing the amount of renewable generation in our energy mix.
• Advancements in technology and cost
  Significant improvements in renewable technologies, particularly in wind, solar and battery storage, have led to substantial cost reductions. For instance, the levelised cost of electricity for offshore wind has decreased markedly, making renewables cheaper than traditional energy sources.
• Environmental awareness
  Growing public concern about climate change has heightened demand for cleaner energy sources. This environmental consciousness has prompted both government action and private sector investment, accelerating the adoption of renewable energy solutions across the UK.

What other economic factors are contributing to the growth of renewables in the UK?

The UK’s energy market has experienced volatility in wholesale electricity prices and price shocks, partly due to fluctuations in fossil fuel markets and geopolitical tensions. This volatility has made renewable energy sources, which have lower marginal costs, more attractive. Additionally, the potential for energy independence and security has motivated investments in domestic renewable energy infrastructure.

How can UK organisations make the most of their renewable generation assets?

To fully capitalise on renewable energy investments, UK organisations should consider onsite generation in combination with Battery Energy Storage Systems (BESS). BESS allows for the storage of excess energy produced during peak generation times both from the onsite renewables and the grid, which can then be used during periods of high demand or low generation. This not only enhances energy self-sufficiency but also provides opportunities to participate in wholesale market trading to generate additional revenue.

What are the current challenges and opportunities in the UK energy storage market?

Challenges

• Regulatory uncertainty
  While there is strong public support for renewable energy, the regulatory framework around fire safety, planning and grid connections is still evolving – which can create uncertainties for investors and developers.
• Grid constraints
  The increasing penetration of renewables and an inefficient grid connection process has led to grid congestion across the country, posing challenges for the developers of renewable and storage projects.

Opportunities

• Government support
  On the back of the National Energy System Operator (NESO) Clean Power 2030 report, the UK government is exploring a number of reforms to the current grid connections process in an attempt to speed up connections and bring forward project development.
• Clean Power 2030 CP30 Action Plan
  The UK Government is considering renewables and battery storage alongside flexibility at the heart of their CP30 action plan.
• Market growth
  The UK energy storage systems market is expected to grow significantly, with projections indicating an increase from 10.74 megawatts in 2024 to 28.24 megawatts by 2029, driven by supportive government policies and the expanding renewable energy sector.

What role does Wattstor play in the UK’s energy storage landscape?

Wattstor plays a central role for UK businesses by enabling them to install onsite renewable energy systems at zero upfront cost. Through our innovative Price Protect tariff, Wattstor ensures that businesses meet their Net Zero targets while paying less than the wholesale market rate for their electricity. Wattstor specialises in providing comprehensive energy management solutions that integrate renewable energy generation with advanced storage technologies. 

These systems are designed to optimise energy usage, reduce costs, and enhance sustainability for businesses across the UK. By leveraging internal expertise, we help organisations navigate the complexities of the energy market and maximise the benefits of their renewable energy investments.