UK Infrastructure Bank has confirmed it plans hundreds of millions into sustainable electricity funds to "help supercharge the UK's transition to cleaner, greener energy," according to a statement shared with Net Zero Investor.
UK Infrastructure Bank intends to invest up to £200m across two investment funds to accelerate the development and deployment of crucial storage technologies, helping to drive the country’s transition to a cleaner, greener and more resilient electricity network.
"The proposed investment will support the development of new energy storage, following the Bank’s expression of interest to find innovative ways to fund and increase the nation’s storage capacity," the statement read.
The bank will invest £75 million on a match funding basis into the Gresham House Secure Income Renewable Energy & Storage LP (SIRES) alongside a £65 million investment from gas giant Centrica.
UK infrastructure Bank has committed a further £125 million on a match-funding basis into Equitix UK Electricity Storage Fund.
"The deals, which represent the Bank’s first investments in the electricity storage sector, could facilitate around 1300 jobs and will unlock at least a further £200 million in match-funded private sector capital, acting as a catalyst for the sector and helping to build confidence among private investors," the statement read.
John Flint, CEO of UK Infrastructure Bank said: “Increasing electricity storage capacity will help secure energy supply in the future and drive us along the path to net zero. We are making progress as a nation, but we need much more investment to meet necessary targets, and the clock is ticking."
He added: “The Bank’s investment into these new funds will help break down the barriers to greater, long-term investment across a range of storage sector and renewable energy opportunities.”
Net zero strategy
The bank stressed that securing enough storage capacity for the UK electricity network is vital to ensure the transition away from fossil fuels is affordable, secure and delivers the emissions reductions required to achieve net zero across the UK by 2050.
"Ramping up the scale and the rate of investment into electricity storage is crucial as homes and businesses across the UK increasingly rely on energy from intermittent renewable sources," according to the statement.
Currently National Grid forecasts show that up to 29 GW of total storage could be needed by 2030 and up to 51 GW by 2050.
"This is a huge increase on the 5 GW currently available and means there is a clear need to accelerate deployment of capital and investment in new storage projects," UK Infrastructure Bank noted.
Gresham House Secure Income Renewable Energy & Storage LP (SIRES)
The Bank will support the launch of the fund, alongside a seed investment of £65 million from Centrica, by committing to invest up to £75 million on a match-funding basis.
Gresham House’s fund will focus on developing the collocation of renewable generation and short duration electricity storage facilities to help maximise grid connections. Centrica will be a cornerstone investor, and this marks the first time the business has invested in such a fund.
The £65 million investment will be used to fund the construction of the seed asset, a collocated solar and battery energy storage project in Hartlepool, County Durham, with 50 MWp solar capacity and 75 MWh of battery energy storage.
Centrica’s Energy Marketing & Trading business will seek to provide a route-to-market for the assets in the fund once they become operational. The fund in total is expected to create and support 400 jobs across the UK through the construction, operations and supply chain.
Equitix UK Electricity Storage Fund
The Bank will support the launch of the fund by committing to invest up to £125million on a match-funding basis.
The UK-based, infrastructure specialist asset manager has an extensive asset portfolio across the UK electricity value-chain which provides them with important insights into novel electricity storage project opportunities addressing the more acute constraints within the UK electricity network, as well as a strategic partner network that can help deliver these projects.
The fund will focus on a combination of innovative business models across both short and long duration storage. Short duration strategies may include installation in households and at underutilised commercial premises, as well as co-location, combining both the battery storage and renewable energy generation at the same site.
The fund will also aim to deploy a range of long duration storage technologies, such as pumped-hydro, a type of energy storage that uses water reservoirs at different elevations to generate and store electricity. The fund is expected to facilitate 900 jobs across the UK.
