A boat passes between turbines at the London Array, the world's largest consented wind farm, off southeast England © Bloomberg

Energy companies are pouring unprecedented sums of money into batteries and other power storage systems long deemed a green pipe dream, in a move experts said would transform the face of the UK’s electricity industry.

“It’s potentially very disruptive,” said Hugh McNeal, the new chief executive of the wind industry’s main trade body, RenewableUK, adding that 55 of the group’s 420 members were now investing “millions of pounds” in energy storage.

If wind farms can store electricity it will help solve their “key challenge” of not working on windless days, Mr McNeal told the FT. “It might mean we need less of other things”, such as gas and nuclear power, he added.

Power storage has long been a holy grail for renewable energy advocates and climate change campaigners because it would help wind and solar farms match conventional, but more polluting gas and coal-fired power stations that can pump out electricity at will.

The relatively high cost of batteries has put this goal beyond reach but with prices more than halving in the past six years, growing numbers of companies are starting to sell storage systems, notably in the US and Germany.

The UK lags behind those countries but the past 12 months has seen a surge in companies testing the market.

One RenewableUK member, Norwegian gas and oil group Statoil, is installing what is believed to be the world’s first offshore wind farm battery system at the Hywind floating turbine project off the coast of Scotland.

Dubbed “Batwind”, it will have the capacity of more than 2m iPhones, puny compared with the UK’s overall power needs but still potentially transformative if adopted widely by the fast-growing offshore wind industry.

“We’re going into a brave new world of energy in the UK,” said Stephen Bull, senior vice-president for offshore wind at Statoil.

Adding storage to rising levels of renewable generators, which supplied a record 25 per cent of the UK’s electricity last year, could eventually pose a competitive threat to conventional power stations, he said.

“For coal this knocks them out and potentially old nuclear as well.”

Solar companies are also turning to energy storage, said Simon Virley, a former senior energy department official who is now a partner at KPMG, the professional services firm.

“It’s a game-changer for the way the power system works in the GB market. I think it’s the biggest disruption there will be over the next five to 10 years,” he said.

Until now, the UK’s main source of energy storage has been plants such as the Dinorwig hydropower station in north Wales, which pumps water uphill when demand is low and releases it when needed.

Battery systems and other newer types of storage are still in their infancy according to National Grid, the UK’s main energy system operator, with only about 30 megawatts of capacity, a small fraction of total generating capacity.

“But this is set to grow in the next few years as technology costs come down,” said Asheya Patten, National Grid strategy partner.

“We’re seeing more and more new providers wanting to develop their technologies and bring them to market,” she said, adding that National Grid was actively encouraging the trend.

The strength of market interest was unexpectedly exposed by National Grid this year when a tender it launched for grid services, aimed at storage companies and other groups that can supply sub-second power, resulted in more than six times the 200MW capacity it had sought.

That move underlines the National Grid’s role in kick-starting the market for new storage systems, said John Prendergast, energy storage manager at RES, a UK-based company that builds wind and solar farms around the world.

The group is already a leading storage supplier in the US but it signed a deal last month with National Grid to install a large battery system providing superfast power to help balance the grid.

“Until now there hasn’t been a commercial route to have a viable business case. That’s what is changing now,” Mr Prendergast said.

Householders are also starting to buy more battery storage systems as costs come down and consumer interest is piqued by Tesla, the electric car company founded by billionaire Elon Musk, which is also making the Powerwall domestic battery.

“Tesla’s market entry has led to a surge of interest from the media and public alike in a way that rarely happens in the energy sector,” the UK Renewable Energy Association said in a report published earlier this week.

While cheaper battery storage offers big potential benefits to renewable power stations and homeowners, industry analysts said grid-scale storage could also produce large savings by reducing the need for new power stations and transmission lines.

In March a Carbon Trust report funded by the energy department and power utilities said energy storage could shave up to £50 a year from an average consumer energy bill and system-wide savings of up to £2.4bn a year by 2030.

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