Long-duration Energy Storage (Science and Technology Committee Report)

But the supply from renewables is weather dependent. In particular, the Royal Society’s report on long-duration energy storage warned about the “Dunkelflaute”: the dark doldrums of winter, when the wind does not blow and the sun does not shine, leading to low renewable generation, sometimes for periods of days to weeks, across the UK and northern Europe. When this happens, some form of large-scale and long-duration energy storage will be needed to keep the lights on. Long-duration storage has another big advantage: rather than curtailing—that is, switching off—wind generation when there is excess supply, as we currently do, we could store that energy and use it later.

If we want our long-duration energy storage to be ready in time, we must act now. If we are to use green hydrogen as our long-duration energy store, which can be generated from renewable electricity via electrolysis, then witnesses told us that storage facilities could take seven to 10 years to build, and storage of any kind needs upfront capital investment. Recent events have made the consequences of energy supply shocks only too clear. Relying on imported fossil fuels damages not only our environment but the UK economy. The recent energy crisis caused by the Ukraine war and restriction of Russian gas supplies to Europe cost £78.2 billion between 2022 and 2024 in government support for energy bills alone. Moreover, the inflation that drove the cost of living crisis was in part driven by the high energy prices, and that damage has been felt by every single household in the UK.

This underlines the value of investment to prevent future crises, but it also demonstrated that, with current economic incentives, the existing energy market will not provide the long-duration storage that we need. We had to partially reverse the closure of the Rough gas storage facility, which had shut down because the private sector argued it was uneconomic to maintain. Energy storage capacity, like vaccines or PPE, is one of those things that Governments wish they had invested in earlier, when they find themselves paying eye-watering sums on global markets in the midst of a crisis.

Not surprisingly, the committee’s report made recommendations around strategic energy storage: a strategic reserve of energy; planning and decision-making for the energy system; targets and policies to support long-duration energy storage; hydrogen as a green energy store; and wider policies to help to minimise the need for long-duration energy storage. I shall discuss some of those key recommendations and some of the Government’s policy responses.

The committee urges the Government to commit to a strategic reserve of energy storage, to be filled when supply is plentiful and maintained to be used in a crisis. The Government have committed in their manifesto to a so-called “strategic reserve” of gas-fired power generation, and have explained that clean power by 2030 actually means 95% clean power from renewables or nuclear, with 5% gas-fired generation kicking in mainly when renewable supply is low. But this is about meeting the frequent requirements for some extra power, and while that is of course crucial it is not about the extremes that we know will happen but cannot predict—the Dunkelflaute or the global crisis.

To be clear, a strategic reserve of gas-fired generation is not the same as what we mean by an actual strategic reserve of energy. The latter could take the form of a volume of gas or hydrogen stored, as we recommended, or indeed other forms of energy storage, such as pumped hydro. The clean power action plan says that we currently need 35 gigawatts of gas generation for long-duration flexibility, but do the Government have estimates for how much gas they will need in a strategic reserve to provide the electricity that we would require in a Dunkelflaute in 2030? How much would we need beyond 2030, with more renewables and when electricity demand is even higher? If gas is to be the backstop for the 2030 target, will there be an actual strategic reserve of gas—a reserve that is government-owned and kept for those extremes? If that is not the case, how will the support mechanism ensure that the store is full when we need it, so we avoid a repeat of the energy crisis that we have just had, with us paying high wholesale prices for gas in a crisis or weather extreme?

The committee said that the Government should get started on no-regrets actions. There is enough analysis of the level of storage that would be needed in a whole range of scenarios that setting an explicit minimum target and getting started on building the strategic reserve is really a no-regrets action. Many key infrastructure decisions are urgently needed. Beyond 2030, to progress towards net zero, any remaining gas-fired plants will need to be fitted with carbon capture and storage, or CCS. New gas plants are supposed to be built to be CCS-ready, but where is the actual plan to capture and store their carbon emissions? How can they be CCS-ready when we do not yet have the networks for transporting and storing CO₂ and we do not even know where those networks will be? How can companies take investment decisions to build CCS-ready plants if they do not know how or when the CO₂ will be transported for storage? Key decisions are urgently needed about infrastructure—not just the transmission infrastructure for electricity but the transmission infrastructure for CO₂ and for hydrogen.

We must act to avoid an increasing challenge of curtailment. The Government’s response to the committee’s report focuses on the role of gas generation to ensure that the lights do not go out. However, without large-scale, long-duration energy storage in a form other than gas, we will not be able to store all the excess energy that UK renewables can generate. So how much curtailment is acceptable and how will we avoid an increase in the frequency with which renewable generators are being paid not to generate electricity?

Is there a transition plan to wean ourselves off gas post 2030? With the assumption that we intend to deliver energy and economic resilience by replacing our reliance on imported gas with other forms of energy storage, how will long-duration energy storage compete with gas subsidised through the capacity market? The Government can argue that long-duration energy storage, for example in the form of hydrogen, cannot scale up to meet security of supply in 2030. Given what we have heard about timelines they may well be right, but if we want to finally break our dependence on fossil fuels and their volatile global prices, as well as to make use of every green joule that we can generate domestically, we need a long-term plan to wean ourselves off gas and scale up domestic large-scale, long-duration energy storage. Can the Minister tell us whether the Government have such a plan?

These are just a few of the many questions from the committee’s report and some elements of the Government’s response. They are not questions for a distant future: 2030 is five years away. That brings me to my next point, about urgency and acceleration. I do not want to give people the impression that long-duration energy storage has been totally ignored. The Government are introducing schemes to support long-duration energy storage through a cap and floor scheme, which we hope will help to finance pumped-hydro storage projects. They are also introducing hydrogen to power and hydrogen transportation and storage business models, although we understand that no subsidies will be delivered until at least the end of this year, as these models are still being developed. Some electrolytic hydrogen projects have been supported in the latest allocation round, and the National Wealth Fund can use some of its funding to support the development of hydrogen projects. We welcome these developments, but bold action is needed to catalyse private investment now. Can the Minister explain how the Government intend to accelerate these plans?

There are further challenges, including skills, public engagement and acceptability, and a range of other issues, which I know some of my committee colleagues will pick up in subsequent speeches.

The Government have set a very challenging, and laudable, target of clean power by 2030, but no one needs reminding that targets are easy to set and much harder to achieve. There are promising signs in the clean power action plan that the Government understand the range of challenges that they must grapple with and are putting policies in place to address them. But policies are not yet spades and steel and concrete, and there are still too many holes in the plan—and not enough holes in the ground—especially around a strategic reserve of energy, starting the no-regrets actions, accelerating the timescales for building long-duration energy storage, and planning to wean ourselves off gas as an emergency backstop, as well as about what happens beyond 2030 and urgency in general. I say again that 2030 is now only five years away, and that is a very short time in terms of developing energy infrastructure. We can, and must, achieve both energy security and net zero, and this requires taking long-term energy storage seriously.

We cannot afford a situation where, every few years, dark doldrum weather conditions send us scrambling to a volatile global gas marketplace, just as the gas price peaks, so that we can keep the lights on. Failure to plan and invest now to avoid this leads us precisely there. Indeed, yesterday, the GB power market came to within 580 megawatts of demand control or a blackout on what was the tightest day for generation since 2011. Incidents such as this and the recent energy crisis, and the lasting societal impact of bailouts and inflation, are a stark warning. If the Government are serious about achieving energy security and net zero—and I believe that these are vital goals—then they must set out a clear plan for how we are going to avoid this situation. That means serious investment and action to cut timelines for energy storage now. I beg to move.

I have to say that I interpret the Government’s decision to build gas plants to provide reserve power as an implicit admission that, notwithstanding international undertakings, clean sources of reserve power will not be available in sufficient quantities by 2030. I very much hope that this decision on gas, despite its considerable expense, is only transitional and that there is a serious intention to have a clean energy source solution for reserve power as soon as possible. Can the Minister confirm this when she responds?

The truth is that early decisions by the Government about reserve power are nothing short of crucial, since without the confidence inspired by a framework of relevant and coherent public policy, it is an illusion to think that the private sector will invest the necessary resources. We really must avoid a repeat of the recent experience of paying exorbitant prices for scarce energy because of a failure to provide indigenous sources, of which we are perfectly capable if only we organise ourselves.

There is a temptation to argue that it is not possible to take big decisions on reserve generation until we know more about the capabilities of different possible technologies and have a better idea of the quantum likely to be needed. These issues are real, but, far from being solved by delay, risk levels are only compounded, and in any case they do not give us the answer to the energy quantity question.

A lot depends on what we assume demand will look like. The energy modellers use different assumptions about the forecasts for future energy supply and demand, which in turn depend, in part at least, on assumptions about weather. The Climate Change Committee bases itself on a typical year of weather, accompanied by stress tests of more extreme weather patterns, whereas the Royal Society, in its study, analysed weather patterns over a longer period, which included years in which there was anomalously low power generation resulting from prolonged periods of low wind speeds—the so-called Dunkelflaute, of which we have heard. Not surprisingly, the Royal Society came up with a bigger estimate for the amount of LDES required than did the Climate Change Committee.

No one said that this was easy. However, I wonder whether anybody has much confidence these days in what constitutes typical weather. What we do know is that weather damage is getting bigger and more expensive by the year. The World Economic Forum recently estimated that, by 2050, the global cost of climate change damage will be between $1.7 trillion and $3.1 trillion a year. With such huge costs at stake, it must be right to act now to ensure that, in turbulent times, at least our power infrastructure is as robust as we can make it and capable of meeting a wide range of weather contingencies. Economic growth and economic security literally hang on it—hence the committee’s entreaty to the Government on long-term energy storage to please get on with it.

What are the advantages of hydrogen for large-scale, longer-term storage? It is available in unlimited quantities through electrolysis and is storable for long periods—that is to say, for months or even years. The UK’s geology makes this a pretty cheap proposition. The power losses involved in conversion to electricity mean that, unless cheap sources of spare energy can be found, such as energy release from a nuclear power station, hydrogen is most economically drawn on as a power source when, for whatever reason, there is a shortfall in the power production of renewables and other sources of energy. I ask the Minister to give us what guidance she can on the nature and timing of government plans for long-duration energy storage at scale.

Unfortunately, our politics, our Civil Service and our industry regulators have become increasingly risk averse over the past 15 years. Significant investment involving technological innovation is risky. Failure is a real possibility and success requires political courage, a bias for action and skill in managing that risk. In short, we need Ministers with a CEO mindset who understand that the greatest risk lies in not making a decision and who focus efforts on managing risk as implementation proceeds.

If the UK fails to act on long-duration energy storage now, we will not meet our net-zero targets, and we will subject our society and economy to blackouts and higher energy costs. By committing to decisive action now, Labour Ministers can signal that Britain is serious about restoring the nation’s fortunes. They can inspire confidence that the UK is now a place where transformative projects get built and where vision is backed by action.

I have one question for the Minister: when will this Government decide to build the strategic reserve of long-duration energy storage that they already accept will be needed to deliver energy security and net zero?

Let us get on to the report itself. It can be described as an almost priceless report in the sense that there are almost no prices attached to any of its recommendations. My only objective in this and the other debates on net-zero policy is to establish the costs and benefits of the options being presented to us. If the option proposed is cheaper than relying on fossil fuels, that is great; the sooner the better. If it is more expensive, let us compare that extra cost with the social cost of the carbon emitted before we decide to go ahead. I get very suspicious when we are told that we must, as the title of the report puts it, “get on with it”, when we do not know what “it” will cost. Dieter Helm, in his report for the previous Government on their climate policy, said that premature investment in immature technologies has wasted up to £100 billion of British taxpayers’ money. Let us not repeat that folly.

I said that the report was almost priceless. But hidden in box 3 on page 17, it quotes the Royal Society report, which claims that, if we rely on renewables and hydrogen storage, the price of electricity in 2050 will be £60 per megawatt hour, which it says is “comparable to the average” price over the decade from 2010 to 2019. Normally we are told that it is going to be cheaper, but this time it is only comparable—so presumably it will be a bit more expensive. That is rather hard to explain because the most recent auction price for offshore wind was £82 per megawatt hour, indexed against future inflation. That does not include the cost of tackling intermittency and, for example, the cost of hydrogen storage.

The same box says that hydrogen storage will add an extra cost of £100 billion. Strengthening and enlarging the grid will cost another £100 billion. This almost equals the £210 billion the Royal Society says will be required to invest directly in wind and solar generation. Given that the main cost of wind is capital investment, how can almost doubling the capital costs required for a system that is driven purely by intermittent energy and therefore has to have so much expensive back-up result in a fall in the price?

I understand that the Royal Society and the committee are relying on barely credible reductions in costs in all aspects of the process. Sadly, the committee did not consider the benefit of relying for a bit longer on natural gas as a back-up while these cost reductions materialise. The cost of energy is crucial. We cannot overstate the impact high costs have on economic performance. We should not rush ahead and get on with something—the cost of which we do not know—when for a bit longer, and with comparatively minor extra emissions of natural gas, we can avoid those problems.

As you would expect, we took a lot of very detailed evidence for the report from a wide range of experts. Even on some of the most important areas, such as the need for a strategic energy reserve, there were widely varying views on how large that reserve should be. We know that the Government’s targets are ambitious and the wish to be largely decarbonised by 2030 brings forward the date, so it is all the more important that a committee such as ours takes on an issue such as this and gives it the prominence it deserves. Let us face it, LDES as an acronym does not exactly trip off the tongue, but it represents an important and vital ingredient of our future energy policy. The net-zero policy to which we are committed will mean that we use electricity far more than we do now, and it will be derived from renewable sources. We will specifically use wind and solar, both of which we have a great capacity for.

The residents of a place called Odiham in Hampshire, as noble Lords will recall, last autumn went for an entire week without any recorded sunshine or wind. There is a special word to describe this—I think the chair has already beaten me to get it into Hansard—but we have got to deal with a world in which the sun does not shine and the wind does not blow, otherwise we run the risk of power cuts. The chair alluded to how close we came relatively recently to what many in the world would call “load-shedding”, which is something a first-world country such as ours should not countenance.

In the short time available, I have a few questions for the Minister. First, what is the Government’s current assessment of the scale of the need for LDES and how will it fit into the new energy system? Secondly, what progress is being made in setting up the National Energy System Operator and what effect will future reforms to the planning system have on implementing decisions once ministerial approval is given?

Thirdly, what plans do the Government have for a strategic energy reserve? Will that reserve be gas or might it be an alternative such as hydrogen? Fourthly, if it will involve green hydrogen as a long-duration energy store, how will this fit into the Government’s wider hydrogen policy? What plans do they have for a domestic electrolyser industry, not to mention greater public consultation on its potential use?

Fifthly, what progress is being made towards a strategic spatial energy plan? Sixthly, what plans do the Government have for speeding up the ability of renewable energy sources to connect to the national grid? When we look back on this in years to come, it will be a scandal that it took so long. Seventhly, when the grid connection queue has finally been shortened, what steps do they plan to take to enable electricity to be transferred across the country—even across beautiful parts of this country—by the building of new pylon networks? Can this be achieved without timely reform of planning laws?

Eighthly, is there anything the Government can tell the House about plans to minimise the need for long-duration energy storage, including the use of interconnectors—always bearing in mind that, in today’s dangerous world, as undersea cables are severed, so could undersea connectors? Ninthly, what government support is being given to R&D into other LDES technologies, such as compressed air and battery chemistries? Tenthly, can the Government explain how LDES can and will fit into their longer-term net-zero objectives? Will gas-fired plants be used for LDES? If so, will they be fitted with CCUS?

In conclusion, when a major committee such as the Science and Technology Committee tells the Government that they should get on with it, I want the Minister to know that it is meant in the kindest, friendliest way—but it is meant.

Paragraph 129 of the report says that long and medium-duration storage is critical,

“but it will not always be the cheapest option”.

The committee stresses that energy efficiency, which I want to focus on, is often a cheaper option. The cleanest, greenest energy you can possibly have is the energy that you do not need to use. I fear that sometimes, when we reach out for technological solutions and think about growth as a mantra or religion, we fail to think about the fact that the cheapest, cleanest, best possible energy is the energy that we do not need to use.

In that context, your Lordships frequently hear expressions of excitement from the Government about the possibilities of so-called AI or large language learning models. One study suggests that a generative AI system uses around 33 times more energy than a machine running task-specific software—33 times more energy to get the same outcome. In 2022, the world’s data centres gobbled up 460 terawatt hours of electricity and the International Energy Agency expects this to double in just four years. Data centres could be using 1,000 terawatt hours annually by 2026.

It is interesting that Dublin, for example, has just put a moratorium on the construction of new data centres. Nearly one-fifth of Ireland’s electricity is currently used by data centres, and that figure is expected to grow significantly. Ireland is starting to ask the question: can and—importantly—do we want to do this?

Finally, perhaps we could do with a little bit of light relief. I suspect that a new word for your Lordships’ House, at least used in this context, is so-called AI slop, which is junk, nonsense material being created at enormous scale by AI-generating machines. There has apparently been a huge explosion of images of Jesus made out of shrimps. Do we want to create energy storage so that AI systems can do that?