Long-term energy storage (LDES) is needed, but the excessive purchase of battery energy storage systems (BESS) threatens to negatively impact the build-out of commercial projects, according to the CEO of Fidra Energy.
Fidra Energy’s Thorpe Marsh BESS is one of 77 projects to have progressed in the first application window in the government’s cap-and-floor LDES programme. Thorpe Marsh is now undergoes project assessment together with 76 other successful applicants (mainly lithium-ion BESS).
While recognizing LDES is necessary, Chris Elder, CEO of Fidra Energy, does have concerns, which he shared with our sister site Energy storage.news in a recent interview, which will be published in full on the site this week.
“The pros of it are that we need LDES in the 2030s. But the cons are that if it is purchased too much, it will have an absolute impact on the amount of commercial batteries that are built. Most of the projects are lithium-ion projects and those will be direct competitors to the other lithium-ion projects,” says Elder.
“It’s a double-edged sword. We’re concerned that the outcome could be a large number of subsidized batteries in the system, which could crowd out merchant buildouts, and that’s not necessarily a good thing for consumers.”
“Incumbents are right to say that we need to look at this in a thoughtful way. Ofgem appears to be keeping their options open, and it is not clear how they will choose the final projects.”
He says projects of 8 hours, the minimum duration in the LDES scheme, will not be financeable on the commercial market for the next five to six years.
“Do we really need that many long-lasting batteries by 2030? There is always a risk when the government has a shiny new toy. The same was true for interconnectors, some investments were not thought through, such as bringing in more power from Norway before Scotland’s electricity grid was built.”
Owner-operator Zenobe has been one of the most vocal opponents of the plan for these reasons founder James Basden in conversation Energy storage.news at the time of the publication of an open letter against it in April last year. The company has since formally filed a complaint with the competition courts.
