Battery Storage Secures 655MW in T-1 2024/25 Capacity Market Auction

The UK’s Capacity Market Auction for the T-1 delivery year 2024/25 has recently concluded, with battery storage securing a significant 655MW at a clearing price of £35/kW/year. This development marks a significant milestone in the UK’s energy transition, highlighting the growing importance of battery storage in the country’s energy mix.

Understanding the Capacity Market Auction

The Capacity Market Auction is a mechanism introduced by the UK government to ensure that there is sufficient capacity available to meet peak electricity demand. It provides a regular, predictable income for capacity providers, incentivising investment in new capacity and the continued operation of existing capacity.

Significance of Battery Storage Winning 655MW

The award of 655MW to battery storage in the T-1 2024/25 Capacity Market Auction is a significant development for several reasons:

It demonstrates the growing competitiveness of battery storage in the energy market. The clearing price of £35/kW/year is a testament to the cost-effectiveness of this technology.
It highlights the increasing importance of battery storage in ensuring grid stability and reliability. As the UK transitions to a low-carbon energy system, battery storage will play a crucial role in balancing supply and demand.
It provides a strong signal to investors about the viability of battery storage projects. The guaranteed income from the Capacity Market Auction can help to de-risk investments and stimulate further growth in the sector.

Case Study: Battery Storage in Action

A prime example of battery storage’s potential is the Hornsdale Power Reserve in South Australia. This 150MW battery storage facility, built by Tesla, has played a crucial role in stabilising the grid, preventing blackouts, and reducing costs. Since its commissioning in 2017, it has saved consumers over AUD 116 million in its first two years of operation.

Future Prospects for Battery Storage

With the successful outcome of the T-1 2024/25 Capacity Market Auction, the future looks bright for battery storage in the UK. According to a report by BloombergNEF, the global energy storage market is set to grow to 942GW by 2040, a 122-fold increase from 2018. The UK, with its ambitious decarbonisation targets and supportive policy environment, is well-positioned to be a leading player in this market.

Conclusion: Battery Storage – A Key Player in the Energy Transition

The award of 655MW to battery storage in the T-1 2024/25 Capacity Market Auction is a significant milestone in the UK’s energy transition. It demonstrates the growing competitiveness and importance of battery storage in the energy market, providing a strong signal to investors about the viability of this technology. With the global energy storage market set to grow exponentially in the coming years, battery storage is poised to play a crucial role in ensuring a reliable, cost-effective, and low-carbon energy system.