Italian utility Enel buys into EFR with 25MW UK battery storage purchase


Italian utility Enel has acquired the 25MW Tynemouth stand-alone battery storage project from Element Power after buying up shares in subsidiary Tynemouth Energy Storage Limited. The firm says its total investment, including construction, will be around €20m (£17m).

The deal means Enel has bought itself a four year contract to supply superfast grid balancing services to National Grid via the enhanced frequency response (EFR) service. The lithium-ion system will be completed by 2018.

Enel head of global thermal generation Enrico Viale predicted “exponential growth in all geographies in the next years” for battery storage. The Tynemouth acquisition, he added, provides Enel with “an opportunity to gain experience and strategic knowledge in building such projects, which can then be applied to other markets”.

Element Power boss Mike O’Neill said such projects would deliver cost savings to grid operation and enable increasing amounts of renewable generation to come online delivering a “positive impact” for industry and consumers.

Enel indicated that the fast-build nature of the project had proved attractive, alongside the EFR contract secured last year at £11.49/MWh, providing the owners with at least one predictable revenue stream. Only RES and Belectric (now owned by Innogy) secured higher rates in the EFR tender. After the four-year term is up, Enel said it will bid for capacity market contracts as well as seek revenues from other balancing services.

In a statement, the partially state-owned utility added that the UK is “one of the most advanced markets in the world for utility-scale battery storage systems and one of the first in having set a frequency regulation tender awarding only stand-alone battery storage projects. The country offers multiple revenues streams opportunities, including both fixed payments and market remuneration schemes, and features good growth potential”.

The Energyst is surveying firms mulling battery storage to provide a snapshot of the types of investments planned and hurdles faced. Please take our DSR and battery storage survey here.

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