UK Battery Coalition Warns Over-Extended Storage Guarantees Could Add £1.6bn to Consumer Costs

A group of eight UK battery operators is challenging proposals to over-extend state support for long-duration energy storage, arguing that an oversized initial guarantee round could add £1.6 billion to consumer bills.

The coalition, known as CDAES, includes Zenobe, Fidra Energy, Voltwise Power and Pulse Clean Energy alongside four others — Constantine Energy Storage, Revera Energy, Conrad Energy and Eelpower Energy. Together they operate 2 GW of installed batteries and hold a development portfolio of 5.6 GW.

Their case rests on modelling by consultancy Baringa, commissioned to assess the impact of a proposed 25-year cap-and-floor revenue guarantee for long-duration storage. Baringa found that backing all 7.6 GW of proposed capacity — rather than a baseline of 4.4 GW — could raise average annual payments by roughly £110 million and reduce revenues for two-hour battery operators by 13%. The firm also noted that the cap-and-floor mechanism would help enable the energy transition, but said the optimal scale and deployment timeline remain unresolved.

Ofgem had not responded to a request for comment by the time of publication. Earlier in 2026, Beatrice Filkin, the regulator’s director of large projects, said Ofgem would resist any outcome that proved unfavourable to consumers and was intent on not distorting the short-duration battery market.

In June 2026 Ofgem issued only a preliminary decision covering 16 projects — eleven lithium-ion systems of up to 18 hours’ duration, three pumped-hydro schemes, one compressed-air facility and a flow battery — with final contract awards still to be confirmed. The disputed 7.6 GW figure nonetheless falls within the 2.7–7.7 GW range recommended by system operator NESO for deployment by 2035, based on sensitivity analysis conducted under Ofgem’s guidance.

Source: ESS News (pv magazine)