The latest T-4 Capacity Market Auction has awarded long-term contracts to a range of battery energy storage systems (BESS), reinforcing the critical role of storage in supporting the UK’s electricity grid. Over 1.8 GW of de-rated BESS capacity secured agreements, nearly doubling last year’s allocation of approximately 1 GW. This growth reflects the increasing importance of energy storage in balancing renewable generation and maintaining supply security.
Among the projects awarded contracts, major developments include Fidra Energy’s 1.4 GW Thorpe Marsh and 500 MW West Burton C, alongside several other grid-scale battery storage initiatives. Additionally, longer-duration storage is gaining traction, with 404 MW of 4-hour, 189 MW of 5-hour, 31 MW of 6-hour, and nearly 240 MW of 8-hour projects securing contracts. This shift highlights the need for more sustained energy storage solutions to support grid reliability.
The Capacity Market provides financial incentives for energy projects that contribute to grid stability. This year’s auction, clearing at £60/kW/year, marks a slight decrease from last year’s £65/kW/year but demonstrates continued investment in energy storage as part of the UK’s transition to low-carbon electricity generation. Meanwhile, gas-fired generation saw a marginal decline, with 27.3 GW awarded compared to 28.7 GW in the previous auction, further indicating the shift towards renewable and storage technologies.
Battery storage sites, including those within sustainable energy parks, will play a key role in securing future energy supply. The final confirmation of the auction results is expected from the Secretary of State for Energy Security and Net Zero by 24th March.
As major energy corporations scale back renewable investments, Harmony Energy Income Trust plc (HEIT) continues to expand its battery storage portfolio. While some global energy giants reconsider green strategies, HEIT has reported a 4.36% increase in its unaudited Net Asset Value (NAV) for the quarter ending 31 January 2025. The NAV now stands at £209.83 million, or 92.38 pence per Ordinary Share, up from 88.52 pence per share on 31 October 2024.
HEIT’s portfolio generated £9.7 million in revenue, equating to £97.8k per MW annually—a 57% increase from the previous quarter. The surge is driven by high wholesale market prices and increased activity in the balancing mechanism, underscoring BESS’s role in grid stability.
HEIT’s fully operational portfolio comprises eight 2-hour duration BESS projects, totaling 790.8 MWh/395.4 MW, including the Pillswood facility in Yorkshire and the Bumpers installation in Buckinghamshire.
HEIT’s success highlights the growing importance of battery storage in the UK’s renewable energy transition. With increasing price volatility, long-duration BESS assets will play an even greater role in balancing supply and demand.
