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Britian Proposes New Fee to Tackle Oversupply of Battery Projects

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Britain's energy regulator Ofgem has proposed a new financial charge for battery storage projects, as it seeks to clear a heavily overcrowded queue of schemes waiting to connect to the electricity grid.

Ofgem said on Thursday it was considering an oversubscribed technologies commitment fee. The proposed fee would require battery developers to put more money behind their projects when the number of schemes seeking grid connections is far higher than the system is expected to need.

Britain has about 90 gigawatts of battery storage capacity either operating or in the reformed grid connections queue, compared with an estimated requirement of around 29 GW by 2035, Ofgem said.

The regulator said the queue's size makes it difficult for network operators to identify which projects are genuinely likely to be built. It can also tie up valuable grid capacity with projects that may never go ahead.

Under the proposal, battery developers would have to provide financial security starting at 3,000 British pounds ($4,014) per megawatt. The amount could rise to 25,000 British pounds/MW if the queue remains heavily oversubscribed.

The aim is to encourage developers to decide early whether their projects are viable, while freeing up grid capacity for schemes ready to proceed.

Battery storage is expected to play an important role as Britain increases its use of renewable energy. Batteries can store electricity when supply is high and release it when demand rises.

But the number of projects seeking connections has grown far beyond expected requirements. The National Energy System Operator removed about 40% of grid-scale battery capacity from the queue in 2025 after projects failed to meet its criteria. Even after the cuts, around 83 GW remained on its new shortlist, alongside 7 GW already operating.

The proposed fee is part of wider reforms aimed at removing speculative or stalled projects from Britain's grid queue and prioritizing projects that are ready to build and needed.

Ofgem said it expects to make a final decision later in 2026.

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Commodities

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