Reforms of the Capacity Market will limit the amount of new battery storage capacity that will be able to compete in the auction, a renewables body has warned.

The Government intends to lower the de-rating factor in Capacity Market auctions for 30 minute duration batteries. Storage projects over four hours duration will see no change from the decision.

The announcement came after National Grid confirmed that more than 2.1GW of battery storage capacity had pre-qualified to compete in the T1 auction, which will award contracts for next winter when it takes place in January.

The T4 auction, which will contract power from 2021 for 15 years, saw 227 battery storage projects pre-qualify, representing around 4.8GW of storage capacity.

The T4 auction will take place in February 2018. SmartestEnergy has pre-qualified in both auctions.

Frank Gordon, Policy Manager at the Renewable Energy Association, said the changes, which will make short duration assets less valuable in the capacity market were “slightly less drastic” than those first proposed but could make it harder for a number of battery storage projects to compete”

Undermining growth

Gordon said the move was one of many recent changes that are undermining the growth of the sector.

“Recent revisions to “embedded generation” payments slashed the support that small-scale, distributed generation receives and there could be more pain for the sector in future grid payments reform.

“Considering the Government research and development funding going towards batteries at the moment and the drive to encourage future battery manufacturing it seems strange to undermine the development of a battery storage market.

“The timing of these changes is our main criticism however. As they are being applied in the midst of an on-going auction process it is akin to changing the rules of a football match at half-time.”

> Read the REA's announcement