UK green power sector gets surprise £10bn pledge

Britain’s under-pressure green power sector has received an unexpected boost after a renewable energy developer pledged to spend £10bn to build the UK’s largest portfolio of battery storage projects.

NatPower, a British start-up part of a major European energy group, is preparing to submit planning applications for three “super parks” and a further 10 next year.

The battery storage project is seen as a key piece of the UK grid’s decarbonisation puzzle, storing electricity generated by wind turbines and solar panels for use when the weather is nice or sunny.

NatPower’s investment will lead to the construction of 60 gigawatt hours of battery storage, with solar and wind projects also in the pipeline.

The two super parks will be located in the north of England, with a further site planned for the west of the country later this year. The projects will be built on industrial land and through lease agreements with farmers.

The potential investment would be a bright spot in a troubled renewable energy industry. Russia’s full-scale invasion of Ukraine in 2022 has intensified the tightening of natural gas markets and accelerated the development of renewable energy in various countries. However, the resulting surge in demand and global inflation have put pressure on supply chains, forcing companies to curb their ambitions.

UK Chancellor of the Exchequer Jeremy Hunt announced £120 million in his budget speech on Wednesday to support the expansion of “low-carbon manufacturing supply chains”. The upcoming auction will earmark a record £1 billion to support offshore wind farm projects, after September’s auction failed to attract any bidders.

Hunt also said that he would pay 160 million pounds to Japan’s Hitachi to build two nuclear power stations – Werfa Nuclear Power Station on the island of Anglesey or Inismond in north Wales, and on the River Severn in South Gloucestershire. Oldbury Nuclear Power Station.

Efforts to decarbonise the UK grid are also hampered by wait times of up to 15 years for new projects such as wind farms and solar farms. Energy officials have moved to remove so-called zombie projects from connection waiting lists.

NatPower, which plans to finance, own and in some cases operate its projects, said it has also set aside £600m to invest in new substations.

Stefano Sommadossi, chief executive of Enforcement UK, said:: “To address the bottlenecks holding back the clean energy transition, we will drive investment in the grid itself, working with grid operators to deliver more than 20% of the new substations needed.

“By investing in substations and focusing first on energy storage, we will deliver the next stage of the energy transition and lower energy costs for consumers.”

Battery storage projects can also help significantly reduce curtailment — the process by which wind and solar projects receive payments to stop generating electricity when supply exceeds demand. Without upgrades to the grid, these costs could reach £3.5bn a year by 2030, according to thinktank Carbon Tracker.

The UK battery storage industry remains fragmented but includes projects of all sizes, including the £750m development of the Low Carbon Energy Park in Trafford, Greater Manchester, and a series of projects designed by the co-founder of collapsed energy supplier Bulb .

Founded in the UK in 2022, NatPower UK is part of the Luxembourg-based European specialist energy group, which is backed by its management team and private equity firm Tyrus Capital. It finds land, obtains permits and often sells projects when they are ready for construction.

The group is raising funds through private companies and pension funds to pursue its UK ambitions. An announcement on securing further investment is expected within weeks.

The government has set a target of generating electricity entirely from renewable energy by 2035, while Labor has pledged to achieve this target by 2030.

Industry insiders believe it is an ambitious plan amid fears the UK may struggle to meet growing electricity demand for everything from electric cars to heat pumps, while efforts to build new power projects falter.