Last month, NextEnergy Solar Fund (NESF) announced the acquisition of our first battery storage assets, acquiring two utility-scale solar-plus-storage farms at Salcey Farm, in Berkshire and Pierces Farm, in Buckinghamshire.

Combined, the projects provide 7.2MW of solar capacity, coupled with 1MW of on-site battery storage, enabling us to diversify our offering via frequency response and grid balancing services. This investment was sound on the basics for investment in solar and did not reflect a major swing to creative investment in batteries. 

Across the renewables sector and beyond, batteries have been an answer waiting for a question. And for all intents and purposes, that has not yet changed. 

Nevertheless, the electricity market, both in the UK and globally, is rapidly evolving to become increasingly dynamic and decentralised. With this trend set only to continue, battery storage will have an increasing role in providing vital frequency response and grid balancing services, which are essential to the smooth running of our energy system. The idea that some have had that batteries, being a long-term investment, will somehow be valuable investment for short term arbitrage, is not prudent.

However, from a business perspective the case for continued development in this area is becoming a strong one, with services such as these enabling us to secure valuable new revenue streams. The growing market for batteries as well as other storage infrastructure and assets in the UK and globally only serves to support this business case further. The reducing cost and flexibility of battery solutions will increasingly support the business cases. Over the next five years up to 9,000MWh of battery energy storage cold be deployed across Britain alone.

Whilst the outlook is positive, in order for the battery storage sector to reach its full potential, a number of challenges still remain to be overcome.

Firstly, battery efficiency and performance must improve. With current energy storage time counted in hours, rather than days, the need for the development of longer term energy storage solutions is crucial.

Secondly, despite a considerable fall in battery capital costs over the past few years, running costs can still remain high when attempting to store energy in the longer term, compared with other technologies.

And finally, a number of issues remain around market transparency, with regulatory questions still yet to be answered. Many companies across the sector remain hopeful of a positive outcome following National Grid’s energy storage rules review, which is currently underway. 

In spite of these challenges – which are by no means insurmountable – we see battery technology and energy storage emerging as a solid investment opportunity. With so many solar farms across our portfolio, exciting opportunities to enhance value await through both retrofitting battery storage systems to our existing assets, or by acquiring new battery assets outright. 

Watch this space.

Read the entire story