The government has confirmed its intention to bring in a new market-based mechanism that would see energy generators paid to provide back-up capacity, a move which could result in smart grid and energy storage technologies playing a crucial role in the UK’s future energy system.
Energy Secretary Chris Huhne has published a technical update to the electricity market reform (EMR) white paper released in July, which set out plans to mobilise £110bn of investment in electricity production and transmission infrastructure over the next decade.
The update confirms the government’s intention to legislate for a market-wide capacity mechanism next year, which means energy storage and demand response companies will be able to bid alongside generators to provide back-up capacity.
Huhne said more energy storage capacity will be needed as the UK turns off coal power stations and moves to more variable wind power and less flexible nuclear energy.
“The UK faces a huge energy investment challenge over the coming years, with a fifth of our generating capacity coming to the end of its working life and electricity demand set to double,” Huhne said. “We want to give certainty to investors to develop the mix of clean energy sources that will power the UK in the years to come.”
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