The proposal and how it would work
Britain's energy regulator laid out the plan on Thursday to charge battery developers for keeping a place in the grid connections line. The charge starts at £3,000 per megawatt (Ofgem cites $4,019) and, should the line remain heavily oversubscribed, might climb as high as £25,000 per megawatt. Projects that make it to a live connection would get their payment back.
Why Ofgem says it is needed
Britain is shifting its power mix toward renewables and away from gas, and batteries are the shock absorbers that help smooth out wind and solar's ups and downs. Ofgem's move mirrors a step it floated earlier this year aimed at data centers stuck in the same queue.
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Fee context and financial estimates
The proposed charge would be refunded when a project successfully connects. Ofgem's battery plan follows an earlier proposal for data centers that outlined fees of £237,500 to £712,500 per megawatt, which it said correspond to a share of a project's estimated capital expenditure between 2.5% and 7.5%. For batteries, the regulator says the maximum outlay would be around one quarter of capex for short duration systems and 7% for medium duration projects.
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