The UK’s National Energy System Operator (NESO) has confirmed that the first two projects involved in its Stability Phase 2 Pathfinder to secure future network resilience have gone live in Scotland. This stage completion includes the connection of Great Britain’s first grid forming battery site.
Grid forming batteries are an advanced battery storage system that can enable batteries to act like traditional power stations, independently stabilising and supporting the electricity system. They set their own frequency and voltage, unlike traditional batteries. The five grid forming batteries contracted by NESO are the first-of-their kind as they provide short circuit level and inertia by mimicking the behaviour of traditional generators through their control systems.
The Stability Pathfinder Phase 2 is a forward looking initiative designed to enhance stability and reduce the operability risk of the electricity system, both in Scotland and across Great Britain.
In total, NESO awarded ten contracts as part of this project (worth £323 million overall) to secure 11.55 GVA of short circuit level (SCL) in Scotland and 6.75 GVA seconds of inertia for Great Britain, through the use of five synchronous condensers and the five grid forming batteries. The five synchronous condensers contracted by NESO offer stability to the electricity system like traditional generators, but without generating power.
The new capability enables NESO to integrate more renewable energy sources onto the system reducing carbon emissions by increasing the capacity of renewable energy generation. They are expected to support the delivery of NESO’s 2025 ambition for zero carbon operation of Great Britain’s national electricity transmission network.
Announced in 2019, the project seeks to lay the foundation for the future operation of the electricity network by replacing the stability services traditionally offered by fossil fuel generation. The estimated cost-saving benefits over the 10-year contracts awarded as part of the Stability Phase 2 Pathfinder are £500 million.
Matt Magill, director of Engineering and Customer Solutions, NESO, commented: “This is a pivotal moment for Great Britain’s electricity networks, as the first grid forming battery on the system will unlock new tools for the long-term resilience and security of supply of the electricity system, whilst supporting the delivery of zero-carbon operation.”
Batteries revenues quadruple
New data reveals a surge in battery energy storage system (BESS) revenues in the UK since December 2024, primarily driven by the 20% of revenue now being brought in from grid stabilising reserve services – up from just 4% at the start of December.
The data from Cornwall Insight’s BESS Analytics report, shows average BESS revenues have quadrupled over the past year. Half of this increase has occurred since December 2024, with the rise largely attributed to the introduction of Quick Reserve in November 2024 – a frequency management tool from the National Energy System Operator to counter supply-demand imbalances. Tight system margins were also a partial factor in the increased revenues.
Given the saturation of other response services, Quick Reserve has proved a valuable additional revenue source for batteries in recent months. However, this may not continue, with Cornwall’s BESS Analytics project pipeline indicating that another 6 GW of batteries are due to come online by the end of 2025.
Dr Matthew Chadwick, lead research analyst at Cornwall Insight, said: “The rapid rise of battery storage revenues from Quick Reserve highlights how critical flexibility services are becoming in the UK’s evolving energy system. Ultimately, getting to net zero will involve more intermittent energy generation coming on to the grid, and that is where batteries will thrive. Other technologies simply do not have the ability to ramp up production that quickly – Quick Reserve is a batteries market.
“Of course, as with any revenue stream, the more competition there is, the less the returns. With another 6 GW of batteries due to come onto the system this year we could see revenues for Quick Reserve fall, as returns on other frequency response services have done.”
