Making batteries work for Clean Power 2030

Peak electricity demand is expected to see only moderate growth over the next five years, but from 2030, as heat pumps and electric vehicles become more integral to how UK households stay warm and get around, it is predicted to increase substantially. 

 By 2050, the Department for Energy Security and Net Zero (DESNZ) has said the UK’s peak annual electricity demand is likely to at least double, and potentially increase by more than 150%. 

To ensure this higher demand can be met with clean power, we will need to see a significant rise in renewable generation, potentially more than doubling onshore wind, offshore wind, and solar capacity. 

Because renewable energy sources – unlike fossil fuels – cannot be fired up at will to meet demand, their growing role in the energy mix will require us to inject more flexibility into the system to keep supply and demand balanced. 

Current projections suggest a need for over 350% more flexibility – for example changing when consumers use various household appliances or charge electric vehicles – and, crucially, a 500% increase in battery storage capacity. 

Batteries will play a major role in helping the Government meet its Clean Power 2030 goals, which is why we’re already working at all levels to integrate them into the energy system and bring much needed flexibility to the UK. 

Working to meet the UK’s 2030 battery needs 

So long as it’s connected to the grid, any size of battery has the potential to store and export electricity to keep supply and demand balanced, which is why E.ON’s focus is on batteries both big and small. Here are some of the ways we’re currently helping the UK meet its battery storage requirements for 2030: 

• Putting batteries in customers’ homes, both as a commercial offering with E.ON Next’s solar PV packages, and through initiatives such as our ongoing pilot in Coventry, which is installing batteries in vulnerable customers’ homes at no upfront cost using funding from Ofgem’s innovation hub. 
• Installing grid-scale batteries with the capacity to store large amounts of renewable energy when there is a supply surplus and then deploy it quickly back into the grid when there is demand. For example, E.ON is currently investing in one of two 115MW batteries at a new storage facility on the former Uskmouth coal-fired power station in Newport, South Wales, preparing the area for a more sustainable, flexible future. 

• Supporting industrial and commercial customers with behind-the-meter batteries whose capacity sits between domestic and grid-scale solutions. At present, these are most often provided as part of large-scale solar installations such as our project to help the Peel Ports Group Decarbonise by 2040, which will involve installing the UK’s largest solar site at the Port of Liverpool. There is also scope to install more of these behind-the-meter batteries as a way of creating more flexibility by 2030, but making this economically viable will require a second look at the levies applied to electricity imports. 

Removing final levies to make batteries work 

One way to encourage more battery installations and improve flexibility in the energy system is through increased funding. By making more green grants and low-cost green financing available, the Government can incentivise battery installations today that will pay for themselves through long-term energy cost savings. But this can only succeed if the conditions are right for batteries to create long-term economic benefits. 

One key obstacle in the way of these benefits right now is the application of Final Consumption Levies (FCLs). These are applied to electricity imports to help pay the costs of growing and operating a clean energy system, but they also drive up the cost of electricity – especially at peak times. Because the levies are charged when power is imported and stored but not refunded when a battery sends that power back to the grid, they are also a major disincentive to installing behind-the-meter batteries. 

Removing these levies for specific uses would help encourage widespread adoption of behind-the-meter batteries for both households and businesses, allowing them to form networks of quick-to-deploy energy storage devices that would effectively work as virtual power plants (VPPs), massively expanding the country’s flexible energy capacity and supporting the grid. 

For the UK to meet its goals for Clean Power 2030 we need more renewables in the system. To keep that system balanced, we need greater flexibility. Batteries of all sizes will play a major role in providing that flexibility, but to drive installations we need to reconsider the Final Consumption Levies that are currently holding them back. 

By taking this initial step, as well as looking at how to sustainably shift policy levies onto gas and other non-sustainable energy sources, the Government can incentivise more battery uptake, increase flexibility, and help us make new energy work.