Long-duration Energy Storage (Science and Technology Committee Report)

Baroness Brown of Cambridge Excerpts

Thursday 9th January 2025 Lords Chamber

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[Baroness Brown of Cambridge]

That this House takes note of the Report from the Science and Technology Committee Long-duration energy storage: get on with it (1st Report, Session 2023–24, HL Paper 68).

[Baroness Brown of Cambridge (CB)]

My Lords, I am delighted to introduce for debate this Science and Technology Committee report on long-duration energy storage. It is my pleasure to welcome the noble Baroness, Lady Gustafsson, of Chesterton, who brings her valuable business and technology experience. I look forward to her maiden speech in response to this debate, and to working with her on issues across science, technology and investment.

I stress that my personal knowledge of this field is closely linked to my external interests in the area as a non-executive director of Ørsted, the offshore wind developer, and the FTSE-listed company and Imperial College spin-out Ceres Power, which licenses intellectual property for solid oxide fuel cells and electrolysers.

I thank all the highly engaged Science and Technology Committee members, past and present, who made leading this report challenging, thought-provoking and fun. As ever, huge credit and thanks are due to the committee staff who assisted in preparing this report: Thomas Hornigold, Matthew Manning, Sid Gurung and Cerise Burnett-Stuart, as well as our special adviser, Professor Keith Bell of the University of Strathclyde.

The inquiry ran from September 2023 to March 2024, with follow-up sessions in April and May last year. We heard from about 30 witnesses, including energy system experts, private companies, the Climate Change Committee and the Department for Energy Security and Net Zero. Some 46 pieces of written evidence were published. Our report was entitled Long-Duration Energy Storage: Get On With It. Since the report was published, we have had a general election and a change of Government, but as the new Government’s target for a largely decarbonised electricity system has been brought forward from 2035 to 2030, the imperative to get on with it is now all the more pertinent.

The climate crisis is worsening. On Monday this week, the serious scientific journal Nature described, uncharacteristically, global average temperatures in 2023 as “off the charts”—and 2024, at over 1.6 degrees above pre-industrial levels, has unexpectedly been even hotter. Nature reports that climate scientists are now considering whether this could indicate that climate change is accelerating. Add to that an increasingly unstable world and energy security is more critical than ever for the UK economy and the well-being of the population. But we do not have much time: 2030 is just five years away.

We have a Department for Energy Security and Net Zero, and long-duration energy storage must be at the heart of its thinking. It is a tool that enables us both to have energy security and to reach net zero. The Government acknowledge that the vast majority of electricity in the UK will need to come from renewables by 2030, and electricity supply and demand will grow significantly as we electrify heating, industry and transport.

But the supply from renewables is weather dependent. In particular, the Royal Society’s report on long-duration energy storage warned about the “Dunkelflaute”: the dark doldrums of winter, when the wind does not blow and the sun does not shine, leading to low renewable generation, sometimes for periods of days to weeks, across the UK and northern Europe. When this happens, some form of large-scale and long-duration energy storage will be needed to keep the lights on. Long-duration storage has another big advantage: rather than curtailing—that is, switching off—wind generation when there is excess supply, as we currently do, we could store that energy and use it later.

If we want our long-duration energy storage to be ready in time, we must act now. If we are to use green hydrogen as our long-duration energy store, which can be generated from renewable electricity via electrolysis, then witnesses told us that storage facilities could take seven to 10 years to build, and storage of any kind needs upfront capital investment. Recent events have made the consequences of energy supply shocks only too clear. Relying on imported fossil fuels damages not only our environment but the UK economy. The recent energy crisis caused by the Ukraine war and restriction of Russian gas supplies to Europe cost £78.2 billion between 2022 and 2024 in government support for energy bills alone. Moreover, the inflation that drove the cost of living crisis was in part driven by the high energy prices, and that damage has been felt by every single household in the UK.

This underlines the value of investment to prevent future crises, but it also demonstrated that, with current economic incentives, the existing energy market will not provide the long-duration storage that we need. We had to partially reverse the closure of the Rough gas storage facility, which had shut down because the private sector argued it was uneconomic to maintain. Energy storage capacity, like vaccines or PPE, is one of those things that Governments wish they had invested in earlier, when they find themselves paying eye-watering sums on global markets in the midst of a crisis.

Not surprisingly, the committee’s report made recommendations around strategic energy storage: a strategic reserve of energy; planning and decision-making for the energy system; targets and policies to support long-duration energy storage; hydrogen as a green energy store; and wider policies to help to minimise the need for long-duration energy storage. I shall discuss some of those key recommendations and some of the Government’s policy responses.

The committee urges the Government to commit to a strategic reserve of energy storage, to be filled when supply is plentiful and maintained to be used in a crisis. The Government have committed in their manifesto to a so-called “strategic reserve” of gas-fired power generation, and have explained that clean power by 2030 actually means 95% clean power from renewables or nuclear, with 5% gas-fired generation kicking in mainly when renewable supply is low. But this is about meeting the frequent requirements for some extra power, and while that is of course crucial it is not about the extremes that we know will happen but cannot predict—the Dunkelflaute or the global crisis.

To be clear, a strategic reserve of gas-fired generation is not the same as what we mean by an actual strategic reserve of energy. The latter could take the form of a volume of gas or hydrogen stored, as we recommended, or indeed other forms of energy storage, such as pumped hydro. The clean power action plan says that we currently need 35 gigawatts of gas generation for long-duration flexibility, but do the Government have estimates for how much gas they will need in a strategic reserve to provide the electricity that we would require in a Dunkelflaute in 2030? How much would we need beyond 2030, with more renewables and when electricity demand is even higher? If gas is to be the backstop for the 2030 target, will there be an actual strategic reserve of gas—a reserve that is government-owned and kept for those extremes? If that is not the case, how will the support mechanism ensure that the store is full when we need it, so we avoid a repeat of the energy crisis that we have just had, with us paying high wholesale prices for gas in a crisis or weather extreme?

The committee said that the Government should get started on no-regrets actions. There is enough analysis of the level of storage that would be needed in a whole range of scenarios that setting an explicit minimum target and getting started on building the strategic reserve is really a no-regrets action. Many key infrastructure decisions are urgently needed. Beyond 2030, to progress towards net zero, any remaining gas-fired plants will need to be fitted with carbon capture and storage, or CCS. New gas plants are supposed to be built to be CCS-ready, but where is the actual plan to capture and store their carbon emissions? How can they be CCS-ready when we do not yet have the networks for transporting and storing CO₂ and we do not even know where those networks will be? How can companies take investment decisions to build CCS-ready plants if they do not know how or when the CO₂ will be transported for storage? Key decisions are urgently needed about infrastructure—not just the transmission infrastructure for electricity but the transmission infrastructure for CO₂ and for hydrogen.

We must act to avoid an increasing challenge of curtailment. The Government’s response to the committee’s report focuses on the role of gas generation to ensure that the lights do not go out. However, without large-scale, long-duration energy storage in a form other than gas, we will not be able to store all the excess energy that UK renewables can generate. So how much curtailment is acceptable and how will we avoid an increase in the frequency with which renewable generators are being paid not to generate electricity?

Is there a transition plan to wean ourselves off gas post 2030? With the assumption that we intend to deliver energy and economic resilience by replacing our reliance on imported gas with other forms of energy storage, how will long-duration energy storage compete with gas subsidised through the capacity market? The Government can argue that long-duration energy storage, for example in the form of hydrogen, cannot scale up to meet security of supply in 2030. Given what we have heard about timelines they may well be right, but if we want to finally break our dependence on fossil fuels and their volatile global prices, as well as to make use of every green joule that we can generate domestically, we need a long-term plan to wean ourselves off gas and scale up domestic large-scale, long-duration energy storage. Can the Minister tell us whether the Government have such a plan?

These are just a few of the many questions from the committee’s report and some elements of the Government’s response. They are not questions for a distant future: 2030 is five years away. That brings me to my next point, about urgency and acceleration. I do not want to give people the impression that long-duration energy storage has been totally ignored. The Government are introducing schemes to support long-duration energy storage through a cap and floor scheme, which we hope will help to finance pumped-hydro storage projects. They are also introducing hydrogen to power and hydrogen transportation and storage business models, although we understand that no subsidies will be delivered until at least the end of this year, as these models are still being developed. Some electrolytic hydrogen projects have been supported in the latest allocation round, and the National Wealth Fund can use some of its funding to support the development of hydrogen projects. We welcome these developments, but bold action is needed to catalyse private investment now. Can the Minister explain how the Government intend to accelerate these plans?

There are further challenges, including skills, public engagement and acceptability, and a range of other issues, which I know some of my committee colleagues will pick up in subsequent speeches.

The Government have set a very challenging, and laudable, target of clean power by 2030, but no one needs reminding that targets are easy to set and much harder to achieve. There are promising signs in the clean power action plan that the Government understand the range of challenges that they must grapple with and are putting policies in place to address them. But policies are not yet spades and steel and concrete, and there are still too many holes in the plan—and not enough holes in the ground—especially around a strategic reserve of energy, starting the no-regrets actions, accelerating the timescales for building long-duration energy storage, and planning to wean ourselves off gas as an emergency backstop, as well as about what happens beyond 2030 and urgency in general. I say again that 2030 is now only five years away, and that is a very short time in terms of developing energy infrastructure. We can, and must, achieve both energy security and net zero, and this requires taking long-term energy storage seriously.

We cannot afford a situation where, every few years, dark doldrum weather conditions send us scrambling to a volatile global gas marketplace, just as the gas price peaks, so that we can keep the lights on. Failure to plan and invest now to avoid this leads us precisely there. Indeed, yesterday, the GB power market came to within 580 megawatts of demand control or a blackout on what was the tightest day for generation since 2011. Incidents such as this and the recent energy crisis, and the lasting societal impact of bailouts and inflation, are a stark warning. If the Government are serious about achieving energy security and net zero—and I believe that these are vital goals—then they must set out a clear plan for how we are going to avoid this situation. That means serious investment and action to cut timelines for energy storage now. I beg to move.

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[Baroness Brown of Cambridge (CB)]

It is my pleasure to congratulate the noble Baroness, Lady Gustafsson, on her maiden speech and again welcome her to the House. Most of us will be feeling enormously grateful that we did not have to give our maiden speeches under such pressure and on such a challenging and complex area. She has clearly mastered her brief with great skill, and it is encouraging to hear her passion for this important area.

I will make just a few comments. On the urgency and timescales, we have heard about a range of positive developments but there is an optimism on timing that worries me. The noble Baroness talked about business models being designed for hydrogen storage; they are not yet available, but the desire is for infrastructure to be delivered by 2030. She is a mathematician so I do not need to remind her that it is only five years away, yet those sorts of infrastructure projects typically take seven to 10 years—that was the shortest kind of timescale. We have to recognise that some of this will not be delivered by 2030, but we also need to make sure that we are driving this and, as many noble Lords said, taking appropriate risks to really try to accelerate, use the new technologies and deliver the cost reduction through implementation, because that is the only way we will reduce the cost of these new technologies.

I hope we will start to see more evidence of the public engagement that we need, and get the public on board with the changes that the future energy system is going to deliver, whether that is getting them to understand that we need pylons, even though they do not like them, or that hydrogen storage near their homes, for example, will be done in a way that genuinely will be safe. We need to start to see that public engagement, and I do not think it is yet happening or visible.

The Minister has said many positive things which I very much endorse, but I am still concerned that we need clarity about a strategic energy reserve. Do the Government see this as a reserve of energy—of joules—or do they see it as a generating capacity issue? Talk about a cap-and-floor mechanism for long-duration energy storage makes me worry that we have not quite got the concept of a strategic energy reserve. If we incentivise the development of a strategic energy reserve—meaning that you make money by moving energy in and out of it—then almost certainly it will not be full when the Dunkelflaute happens. We really need clarity on how the Government see a strategic energy reserve and whether they are thinking that we perhaps need a reserve, as the report suggested, that the Government own. It is hard to see how to make a business model for keeping a lot of something that is quite expensive to use just in case it is needed every 10, 20 or 30 years. I want to make absolutely sure that we have got that very important point across.

Finally, I thank the noble Lord, Lord Lilley, who has given me a timely reminder that I need to fill in my tax return. He reminded me of some useful numbers that will be appearing on it, and that I need to take the advice of our report and just get on with it. I commend the report to the House.

Motion agreed.