Long Duration Electricity Storage Systems

(Limited Text - Ministerial Extracts only)

Tuesday 20th October 2026 Westminster Hall

[The Minister for Energy (Michael Shanks)]

It is a pleasure, as always, to serve under your chairship, Sir Christopher. I thank the hon. Member for Inverness, Skye and West Ross-shire (Mr MacDonald) for securing the debate. He and I have talked about this issue many times, but I never tire of it. As he rightly said in his speech, it is an incredibly exciting opportunity for the highlands and an important opportunity for the country.

I always know that winter is coming when the hon. Gentleman’s jumpers make a reappearance. I am a big fan of them, and it is great to see him here today. He is a great champion of his constituency, which covers an enormous part of Scotland. However, having run the Arisaig to Mallaig half-marathon, I would say that he has a significant amount of very beautiful sand in his constituency.

This has been an interesting debate. I will come to the hon. Gentleman’s points about long duration energy storage, but we have also heard about its cousins, such as pumped hydro and sand batteries, which is about storing energy through heat rather than in more conventional ways. It is important to be agnostic about the new technologies that are coming forward all the time and becoming ever more developed. We need a significant amount of flexibility in our system to be able to store and utilise the clean power that we are generating when we need it most. We should be open to a whole range of technologies, so I am very happy to have more conversations about all of them.

The hon. Gentleman made a strong case for the importance of long duration electricity storage. Over decades we have built a significant amount of renewable energy generation across the UK, both offshore and onshore, but we have not kept pace with being able to store that electricity for when we need it most, which has meant that our electricity system cannot get the full benefit of the clean, cheap, secure power that is being generated every single day. In fact, as the hon. Gentleman said, we have to spend considerable amounts of money on constraining that renewable capacity, because we did not build the grid. We have not built the necessary storage, so our transition to being able to deploy clean power when we need it requires much more flexibility, which comes from long duration energy storage.

I recently visited the pumped hydro project in Cruachan, which follows a well-trodden path of technology that we have deployed for a very long time. Pumped hydro lasts for a long time, is an important part of how we deliver long duration energy storage and will play a critical role in balancing supply and demand. In June, Ofgem published its minded-to list for window 1 of the cap and floor scheme. That was a significant milestone for the sector. I agree with the hon. Member for Moray West, Nairn and Strathspey (Graham Leadbitter)—there is a double act of Members with long constituency names——about the ambition on long duration energy storage, but I would also say that this is the first long duration energy storage we have built in Britain in 40 years, and it is a significant amount: 7.5 gigawatts of capacity is not nothing. We remain really ambitious. He is right to say that future scenarios require even more long duration energy storage, but this is a remarkable turnaround from a 40-year gap in building any of these projects anywhere in the country.

Ofgem has provisionally selected 16 projects. It has made minded-to decisions, but a consultation process is running. Three projects are pumped storage hydropower in Scotland, representing over half the LDES capacity. Ofgem will announce its final decision on those projects by the end of the year. When they are delivered, they will reduce costs for consumers by maximising our renewable energy generation to make it available when we need it at peak times and reducing our reliance on natural gas, which is the part of the constraints that is often misunderstood in the press. The cost does not come from turning off wind; it comes from turning up gas somewhere else in the country. If we deploy LDES in the way we intend to, we will be able to reduce that dependency on costly gas generation.

I understand that the hon. Member for Inverness, Skye and West Ross-shire agrees with me on the need for long duration energy storage—we have had this conversation many times—but he also rightly wants to make sure that his community benefits from these projects. Their construction in itself creates a significant number of jobs over several years. That is expected to begin by next year and continue into the early 2030s. One project that he mentioned, Loch Earba, will create approximately 600 jobs over its five-year construction period, including at least 30 new apprenticeships. It is estimated that another project, Loch Kemp, will create 370 jobs in the highlands at peak construction. It has committed £7.5 million to a community fund, and to investing in projects such as the Caledonian canal and local roads.

The hon. Gentleman also rightly made the point about local supply chains and making sure we are delivering as much of the economic benefit of those projects in local communities. The single most important thing my Department has been driving in two and a half years in relation to the construction of these projects is no longer to be agnostic about where we build things as a country, because we actually care about industrial strategy. I have been very clear with all developers that expect to receive public money that they should look at every single part of their procurement to ensure, even down to the smallest contracts, that they procure locally as much as possible. I recognise that that is a shift from where we have been for a long time as a country, but it is critical because that is where we get supply chain jobs right across the hon. Gentleman’s constituency.

[Mr MacDonald]

The Minister mentioned one of the pump storage sites and the £7.5 million investment, which is a one-off payment. For example, Glen Earrach is offering £20 million a year for 125 years, inflation-linked. That is what we have to move to: an amount of money being invested year after year that is agreed and controlled by the Government. What does the Minister think of that?

[Michael Shanks]

Let me come to that point, because we have discussed that before. My starting point is that communities who host infrastructure should feel the benefits of it, and they should be meaningful benefits. We consulted on how we will deliver both community benefits and shared-ownership opportunities for communities. We have put £1 billion pounds into Great British Energy to make sure that there is the financial capacity for communities to take up that shared-ownership offer. We will continue to push that.

I have spoken before about the need for us to balance that though; ultimately, all the costs of building these projects is borne by consumers across the country. The hon. Gentleman and I share the objective of bringing down bills as much as possible. There is a balance to be struck and I do not pretend that is easy because his community—he is right to champion them—will rightly want more and more community benefits. My job is to balance that against the cost of these projects. I need first to ensure that they are economical and will be built, because that is important for the national interest, and secondly that they are built as affordably as possible so that we can bring down bills for everyone. There is a balance to be struck, as I have said to the hon. Gentleman before.

I know that the hon. Gentleman will always want us to go further, but I would just say that the cap and floor scheme is designed to provide not huge public subsidy to make these projects happen, but just the right amount to make them viable. That is the key thing; the cap and floor scheme is designed to be a viability mechanism, so there is a risk that we end up using consumer bills to subsidise projects if we go too far. That does not mean that I do not share his ambition, and I have been very clear with developers that we should see genuine community benefits coming forward and that those should be meaningful for communities.

[Graham Leadbitter]

Very briefly, I am raising these issues with colleagues in the Scottish Government as well, but while DESNZ and Ofgem have a role in this, I think it is helpful for every organisation to be pushing the developers and saying, “What are you doing about the roads infrastructure? What are you doing about how you get people to and from the sites?” Projects represent big influxes of people into areas, while the local infrastructure can be just lane-and-a-half roads, with passing places and all that. Will the Minister commit to putting some pressure on those companies to invest in that?

[Michael Shanks]

I thought the hon. Member was going to conclude by asking whether I would commit to putting some pressure on the Scottish Government, which would be unlike him. But I agree with him, actually. I have had a number of really productive conversations with Stephen Gethins, Scotland’s Energy Minister, on exactly that topic of how we can make these projects work for local communities. If we can bring that local investment into roads and other infrastructure, it leaves that legacy that I think we all want to see in communities. It is also of benefit to the projects, which will need some investment in road infrastructure anyway.

In summing up, I want to pick out two issues. First, I really welcome the hon. Member for Inverness, Skye and West Ross-shire’s recognition of the importance of long duration energy storage for our system. The truth of the past few years has been a recognition that, for decades, we had a consensus on building renewables across Scotland and the rest of Great Britain, but we did not make the investment that we should have in building the grid to connect them. We are now paying the price for that.

Equally, storage is absolutely central to how renewables can work in the system, giving us the flexibility to deploy that energy when we need it most and making sure that we are genuinely bringing cleaner, cheaper power to homes and businesses when we need it, which is how we bring down bills. It also has to be the foundation of delivering economic growth. The hon. Gentleman rightly recognised the Prime Minister’s commitment to growth in every postcode. Energy policy does not exist in a vacuum; it is part of our industrial strategy.

We are building these extraordinarily important projects that will last for more than a century. There has to be some legacy for communities from those projects, and we have to bring people with us on this journey. I frequently say in this place in particular, but in the main Chamber as well, that we do need to build infrastructure as a country—that is important—but we should try to bring communities with us wherever we possibly can. Community benefits and real investment are a critical part of that.

The Scottish Government are clearly a key partner in this, given that planning decisions in Scotland are not for me but for the Scottish Government. I know that they share my ambition about the importance of both deploying long duration energy storage and community benefits. They have guidance on this matter, and we are working together on it.

Whether it is through community benefit funds, the bill discounts that we have announced in terms of electricity infrastructure, or our ongoing work to make sure that there is an industrial benefit from these projects, I hope that the hon. Gentleman recognises that, while we might not get everything quite to the extent that he would like, these projects are an opportunity for communities to benefit from construction, from community benefits and from—I hope—a genuine lasting legacy.

Importantly for us as a country, this is how we deliver the secure, home-grown clean power that we need in the system, bring down bills for people and continue the transition to net zero, which is so important. I commend the hon. Member for Inverness, Skye and West Ross-shire again, and I look forward to what I am certain will be further conversations on this in due course.

Question put and agreed to.