The Government’s ambition to decarbonise of the GB power system by 2030 is a clarion call to the industry as it will require up to 27GW of installed battery storage capacity. From policy changes to new revenue streams, Apatura explores the key trends that could ensure 2025 is a big year for batteries.
Cutting through grid connection chaos
The National Energy System Operator (NESO) says achieving a clean power system in 2030 will require installed clean energy generation and storage capacity of around 210GW to 220GW, with around half coming from wind and solar.
But the grid’s capacity to accommodate a massive renewables energy push is lacking. For every £1 the UK has spent on renewables it has spent only 25p on cables and power lines, according to Bloomberg New Energy Finance (BNEF). This imbalance highlights the urgent need for grid expansion and smarter policies to accelerate battery deployment, ensuring the grid can balance supply and demand and keep the lights on.
In November, Ofgem and Government set out expectations that the time it takes for new wind, solar and storage projects to connect to the grid should be slashed, while NESO unveiled its Clean Power Plan and connection reform proposals.
An overhaul of the application system to cut delays affecting hundreds of approved projects ready to connect to the grid would prune back the 722GW of projects in the queue. Schemes will be prioritised if they can be operational within five years and contribute to the right mix of renewable generation types in the right location and at the right voltage to hit the Government’s 2030 goals.
At Apatura, we’re advancing our 10GW pipeline—concentrated largely in Scotland—by securing land rights and planning consents. These reforms are essential for turning our ambition into reality, delivering green infrastructure where it’s needed most.
Meanwhile, NESO published a consultation on its plans to reform the connections process. Reducing and reordering the queue by prioritising ready projects as well as aligning to locational, and technology needs for the future energy system will be addressed.
In 2025, NESO is expected to replace the ‘first come, first served’ approach with a two-stage ‘gated’ grid queue management process, allowing it to prioritise projects that are ‘shovel-ready’. We’re making progress with our 10GW pipeline, securing the necessary land rights and planning consents because we want to deliver green infrastructure where the UK needs it most.
UK BESS capacity on track to hit 8GW in 2025
By the end of 2025 UK cumulative installed grid battery capacity is set to reach 8GW. Modo Energy expects operational capacity to reach 5.1GW by the end of 2024, a realistic estimate that takes into account delays that can impact how long it takes to get BESS developed, built and commissioned rather than basing projections on pipeline alone.
Its forecasts show that a similar amount of capacity will be brought online in 2025, to take total operational capacity to around 8GW, with much of this due online in the second half of 2025, against an actual pipeline of 10GW.
While speeding up grid connections is welcome, simplifying local planning policies is equally crucial.
In NESO’s Clean Power 2030 Advice to Government, a “radical reduction” in the time it takes to achieve planning consent for renewables and energy storage schemes is needed among other measures to achieve power system decarbonisation by 2030.
Supersized batteries: scaling up storage
Capacities of BESS projects will continue to increase. Larger projects are cheaper per megawatt (MW) to build. As the UK continues to add more wind and solar capacity, bigger batteries can capture more of this clean electricity at times when output outstrips demand, instead of it being curtailed.
Overall, a pipeline comprising a growing proportion of larger +100MW projects should help the UK to bring online sufficient BESS capacity between now and the end of this decade, since there is catching up to do.
In 2024, Apatura secured consents for a 100MW grid battery in Tealing, near the city of Dundee on Scotland’s east coast. In September, Scotland’s Energy Consents Unit approved one of the UK’s largest BESS projects to date, our 700MW Auchentiber BESS, in Port Glasgow. In 2025, we anticipate further consents for large-scale projects, helping to bridge the gap between renewable generation and grid demand.
Locational benefits of BESS emerge
We’re going to see the locational benefits of BESS become more pronounced in 2025 and beyond. Batteries in the north of Scotland have been earning more than average as they have been doing so in the south-east of England as well, whereas BESS in the midlands and south-west of England have earned less than average, reveals Modo Energy’s analysis. Much of this is down to Balancing Mechanism revenues.
In northern Scotland, where wind generation often exceeds local demand, batteries are able to store surplus electricity cheaply and sell it later when prices rise.
When wind energy is constrained in Scotland, the option is to curtail or have batteries dispatched in the Balancing Mechanism to reduce curtailment allows BESS to earn revenues based on the difference between the wholesale price and offer price.
The Balancing Mechanism is locational, so as more wind capacity is added north of the border this implies that BESS revenues are becoming increasingly locational as well. In these types of scenarios batteries can also outcompete combined cycle gas turbines (CCGTs) as the cheapest source of offer volume, helping to cut emissions.
As more wind capacity is added north of the border, these locational dynamics will become even more pronounced, making BESS a vital component of the energy transition.
Batteries continue to get cheaper
The cost of lithium ion batteries has continued its steady decline over the past decade. According to BNEF the price of lithium-ion battery packs reached $139/kWh in 2023 and are expected to fall to $113/kWh in 2025 on a trajectory to $80/kWh in 2030. Downward pricing will feed through to reduced levelised cost of storage (LCoS), with new BESS projects, due online in 2025 and the next few years able to capitalise on much cheaper batteries.
However, older assets face challenges as they compete with newer, cheaper systems that can offer more competitive bids and prices. This benefits the energy system overall, as ancillary service costs continue to fall.
Apatura’s BESS projects will leverage the latest technologies, from advanced battery systems to intelligent software, ensuring optimal performance while generating positive returns.
New revenue opportunity plays to the strengths of BESS
In 2025, grid batteries will be able to earn revenues in the Quick Reserve service, one of a suite of services being introduced by NESO to enhance response services and to progress the goal of operating the electricity network with zero carbon.
Quick Reserve (phase one), started in December and is designed for frequency management when there is an imbalance between supply of energy and demand for energy. It will replace NESO’s existing Fast Reserve service and will be responsible for reacting to pre-fault disturbances to restore the energy imbalance quickly and return the frequency close to 50Hz. Quick Reserve and Optional Fast Reserve will be operational together until December 2025.
The service will be split into Positive and Negative Quick Reserve (phase two launches in summer 2025), requiring providers to increase generation or demand, respectively. Units will be required to ramp up or down to their contracted power within one minute and maintain that power for several minutes, before ramping back to their original power. Only BESS and pumped hydro are capable of providing the service in either direction, while renewables have potential to provide Negative Quick Reserve.
This service highlights the unique strengths of BESS in providing rapid, zero-carbon grid support. Phase one alone is expected to deliver annual consumer savings of £29-£32 million while continuing to decarbonise the power system.
A pivotal year ahead for BESS
The Labour Government’s ambition to accelerate renewables buildout is clear, but 2025 must be a turning point for BESS. These systems have proven their value in maintaining grid stability, such as during interconnector failures with Norway and France in 2022 and 2024.
These assets have continued to prove their worth, maintaining inertia and keeping the lights on when Norway stopped exporting via its interconnector with the UK in 2024 and a French-UK interconnector tripped back in December 2022. It needs to be remembered that BESS in the right location can deliver multiple benefits, from maintaining supply and demand to reducing curtailment of wind as well as deferring or reducing network investments.
With a 10GW pipeline in the works, Apatura is ready to lead the way. But we need policymakers, NESO, and Ofgem to prioritise storage as a critical piece of the UK’s clean energy strategy.
