UK flexibility market forecast to hit £6bn
The Informer

Decarbonising, decentralising and digitising the power market in Great Britain will create a £6 billion flexibility market by 2030, according to a new report.

Aurora Energy Research calculated that around 13GW of flexible and distributed generation capacity will be commissioned, including gas reciprocating engines and batteries.

The report predicted that the balancing and ancillary power markets are set to double in size between now and 2030 to around £2bn per year, largely due to the roll-out of further renewable energy generators.

But the report also said that reforms are needed to policy and market design in order to enable the transition.

Business opportunities

John Feddersen, Aurora’s Chief Executive, pointed to how flexible and distribution assets are becoming part of the mainstream power system.

He highlighted milestones including the sale of UK Power Reserve to SEMCORP for £216 million, and Green Frog raising £100m of debt to fund the development of further projects.

Feddersen said that gas engines and batteries are now providing 40% of frequency response contracted by National Grid.

Aurora added: “Key opportunities emerging in this space are for batteries to be deployed behind-the-meter, alongside renewables or electric vehicle charging, or for developers to trade directly in the balancing and wholesale markets.”

Investment case

Felix Chow-Kambitsch, the firm’s head of flexibility and battery storage, said: “Aurora’s analysis shows that investors can protect their returns by adopting a mixed portfolio of renewables and flexible generation assets such as gas engines and battery storage.

“Gas engines and renewables provide a natural hedge to one-another – lowering the volatility of investor returns on a year-to-year basis.”
Steve Shine, Executive Chairman of renewable energy company Anesco, added: “There has been a visible shift in the way such technologies are being regarded and what may once have been seen as a high-risk investment, is now considered a strategic long-term investment, that has benefits across many levels.”

> Find out more about the report