Britain’s energy policy is haunted by ghosts. The most disturbing of them is the failure of central planners to grow Britain’s grid-scale storage capacity in line with the aggressive build out of renewable generation. The UK has just 2.8GW of grid-scale storage at four sites, all of it pumped hydro and the most recent of which was built more than 30 years ago.

Other countries have recognised that renewables are intermittent and have coupled their development with new storage so that excess production can be stored, then released at times of high demand, or when the wind fails to blow. Portugal, for example, is planning 1GW of new storage for every 3GW of renewables in order to achieve the optimum balance between security and evenness of supply.

By the same 1:3 formula, the UK has 2GW less storage than it needs now, and will have a 6GW deficit by 2020.

Without sufficient storage, National Grid is finding it difficult to balance increasingly intermittent supply against “peaky” demand. This is costing industry and households dearly in subsidies and constraint payments.

There may be signs that the government is now thinking about how to bridge the storage gap. However, it is one thing to recognise that the UK must have more storage, and quite another for the government to create the conditions in which more can be built.

Storage equals long timescales and big risk. The last grid-scale facility built, at Dinorwig in north Wales, required hollowing out the inside of a mountain and took a decade to construct. If developers, investors and construction companies are to be persuaded to risk building storage on the scale that Britain needs, then ghosts lurking within the system must be exorcised.

The most fundamental of them is the lack of a National Policy Statement (NPS) for storage.

Twelve NPSs published by the government establish the overarching framework against which decisions about where nationally significant infrastructure for energy, transportation and water can be built.

They also state how such developments support government policy on mitigating or adapting to the effects of climate change. They are intended to ensure that the planning approval process is rapid, predictable and accountable. Six of the existing NPSs relate to energy, including renewables and electricity networks, yet none has anything to say about storage.

Would-be investors in storage read this omission as a red letter warning that returns from investments in storage could be easily put at risk by sudden shifts in central policy. They also see that it means storage projects face planning permission hurdles and uncertainties that do not trouble other assets that have NPSs.

Further perversities which hamper storage investment are tied to Triad* payment thresholds and the requirement for new storage to pay grid connection fees even though, unlike a new power station whose construction requires complementary grid reinforcement, storage lessens the need for reinforcement.

It is important to note that these ghosts do not haunt pumped hydro storage alone. They are largely storage technology agnostic.

If, for example, compressed air storage, or hot gravel storage are eventually refined to the point where either or both become viable for deployment on a scale useful to the grid, then they too are likely to suffer from the same constraints.

For now, though, pumped hydro is the only viable grid-scale technology able to bridge the storage gap with an electricity regeneration efficiency of 75 per cent or more.

The UK’s 2020 storage needs could in theory be met in their entirety by just a handful of new pumped storage facilities – if suitable sites could be found and developed.

However, therein lies another problem: very few areas within the British Isles have the necessary natural topography for such facilities, and those that do are more often than not sited either in national parks or areas of outstanding natural beauty. Furthermore, such sites are often long way from the population centres that are hungry users of electricity, suggesting significant transmission losses.

Is there another way that Britain can bridge its storage gap? Is there a way that pumped storage can be deployed without requiring some of our most prized wild places to be flooded?

There is, and it requires the government to define a vision of the role of storage, including pumped storage and a variety of other storage technologies.

Think small

This vision should support planning for multiple smaller schemes rather than three or four major ones and re-purposing brownfield sites.

Now in the early stages of construction at Glyn Rhonwy near Llanberis in north Wales, the UK’s first new pumped hydro facility for more than three decades is a blueprint for this new way of thinking.

Being built around two former slate quarries, the scheme is expected to be operational by 2018. It has a planned capacity of 600MWh, useful to National Grid in balancing supply against demand, but also making the region more energy self-sufficient and reducing the need for costly grid upgrades. The project has strong support from the local council and community.

As Britain’s only active developer of new pumped hydro storage, Quarry Battery Company has options on other sites around Britain which, like Glyn Rhonwy, similarly feature brownfield ground, or which combine largely brownfield ground with an element of greenfield.

We believe that, through using brownfield sites only, additional new storage with an output of 500MW is possible. If a combination of brownfield and greenfield land is used then the possible output jumps to between 1.5GW and 2GW – just sufficient to bridge Britain’s current storage gap.

Pumped hydro technology is far from static, though, and as advances are made the range and number of potential sites will increase.

Japan currently has the world’s first pumped storage scheme using the sea as the lower lagoon. Creating it has meant solving multiple practical challenges, but if the model was to be applied in Britain, there are many coastal sites that could host pumped hydro storage.

With the application of appropriate technology to such challenging locations, partnered by decisive leadership and action from the government, it is feasible that an additional 13GW of pumped storage could be created. This would go a considerable way towards meeting the need for perhaps 15GW of storage by 2030 that was identified in a 2012 report on energy storage by Imperial College London.

The UK badly needs short-term, fast reaction balancing services to help satisfy peaks in demand, and to charge up when generation output is high but demand is low. It also needs longer-term storage to deliver staying power during extended windless, sunless periods. There is no single answer to Britain’s storage question, and it is wrong to characterise contending storage technologies as being in a race for dominance.

The UK should deploy more pumped hydro now to bridge the storage gap. At the same time it should continue to encourage promising alternative technologies that might, within a ten-year timeframe, be capable of providing complementary back-up in the form of long-duration or distributed storage.

Successive governments have ignored storage, but with costs rising and generation intermittency getting worse, continuing to kick the can down the road is not an option.

Building more grid-scale storage will take seven to ten years. Britain’s electricity consumers and bill payers need the government to grasp the nettle, state what storage is required, and create the transparent and commercially fair framework within which investors, developers and construction companies can operate in confidence to get the job done.

Dave Holmes, managing director, Quarry Battery Company