1st Mar 2023 10:19
(Alliance News) - NextEnergy Solar Fund Ltd on Wednesday said its battery storage project via its joint venture with EelPower has been selected to provide battery storage capacity in the UK government's latest capacity market auction.
The specialist solar investment company with 91 solar power projects in the UK said Camilla, its first standalone 50 megawatt battery storage project based in Fife, Scotland, is expected to earn NextEnergy around GBP557,000 over winter 2023 and GBP576,000 per year from 2026 to 2032, adding to its existing capacity market contract for delivery in winter 2025 to 2026 worth GBP305,000.
The new capacity market contracts were secured in the February T-1 and T-4 auctions run by the Department of Energy Security & Net Zero.
Camilla will be ready to support the electricity grid during stress events in the above winter periods, providing a "stable and complementary foundation for the operation of the asset, albeit representing only a small percentage of the total revenues the asset is expected to generate in the relevant years", NextEnergy said.
It added Camilla's success in the capacity market auction "exemplifies the importance of deploying energy storage at scale alongside solar and other grid-scale renewable technologies, strengthening the UK's energy security and supporting the transition to a net-zero carbon economy".
NextEnergy said its growth strategy anticipated this evolution of the market, while it has "well-developed" plans to introduce additional energy storage to its portfolio.
The capacity market auction is part of the UK government's Electricity Market Reform package, which is aimed at securing the nation's electricity supply through payments to generators and flexible assets, NextEnergy said, to ensure capacity is available as the UK transitions to a grid "dominated by intermittent renewable energy sources".
NextEnergy believes Camilla is expected to benefit from the volatility driven by high Scottish wind capacity, low local demand and constraints on the National Grid. Phase 1 is expected to be energised and connected to the grid in the second quarter of 2023, while works are progressing to schedule, with all battery storage units now installed on site.
Once energised, NextEnergy said Camilla will immediately provide one-hour duration services, with work ongoing to augment towards two-hour duration at 50 megawatts and 100 megawatt hours in due course.
"The project's success in securing these contracts highlights the importance of battery storage in ensuring a stable and resilient electricity grid," said NextEnergy Capital UK Managing Director Ross Grier.
"The initial energisation at one hour duration allows the battery to capitalise on current market dynamics whilst bringing forward the two hour duration will ensure the asset is optimally placed to succeed as the UK's energy system evolves."
Shares in NextEnergy were down 0.4% to 107.59 pence each in London on Wednesday morning.
By Greg Rosenvinge, Alliance News reporter
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